You’re intrigued by the prospect of branching into a new business environment, but not all specialties will be a great fit. Whether you’re a rookie or veteran residential agent, here’s what it takes to excel in each of the main commercial sectors.
Personal attributes: You have a true affection for wide-open spaces.
Must be: flexible, willing to travel and to pursue licensure in multiple states.
Tips for success: This sector has six to eight subsectors (such as farmland, subdivisions, and timberland); unlike other commercial niches, you need to specialize in two or three subsectors to ride out the cycles.
Recommended designation: ALC
Multifamily and Property Management
Personal attributes: You’re a people-oriented multitasker who consistently follows through on tasks.
Must be: willing to roll up your sleeves and pick up a broom, if needed.
Tips for success: This is a good start for those new to commercial, generally considered wide open to those with four-year degrees and those with practical experience in general contracting and related fields.
Recommended designation: CPM
Personal attributes: You’re able to postpone gratification and assist with marketing, databases, and supporting senior brokers as you learn so you can later earn.
Must be: willing to work initially with little or no pay as you intern, assist senior brokers, bring new business to the firm, while building your book of business.
Tips for success: You’ll get paid faster by focusing on tenant representation and leasing. This allows you to control the renter and find the space.
Recommended designation: CCIM
Personal attributes: You’re not necessarily a policy wonk, but you relish the complexities of navigating and understanding government agencies, zoning laws, transportation, proximity to raw materials, water, power, labor availability, and local building and tax laws.
Must be: willing to outwork the competition and never stop learning to future-proof your career.
Tips for success: Be a leading innovator at every reasonable opportunity, but don’t lose sight of ROI dynamics.
Recommended designations: CCIM and SIOR
Personal attributes: You bring a solid combination of sales skills, negotiation expertise, and comfort with risk-taking.
Must be: experienced; this niche is not for novices looking to dip a toe in.
Tips for success: A degree in finance or related area of study is recommended. Even with that, you need the guidance of a solid firm to launch your career.
Recommended designation: CCIM
Personal attributes: You are willing to hit the pavement—which could be a six-block radius in a major metro area—and get to know the tenants in all sectors, buildings, owners, and available spaces.
Must be: ready to weather six to 12 months without pay as you learn the business.
Tips for success: First you learn; then you earn. Join a team and enter in a junior broker or assistant role for 6 to 12 months for a firm in a larger metropolitan area.
Recommended designation: CCIM
Republished from REALTOR Magazine Online, July 2016, by Paula Hess. Sources: Bob Turner, ALC, founder, Southern Properties, 2016 REALTORS Land Institute national president; Geoffrey Kasselman, SIOR, executive managing director, Newmark Grubb Knight Frank, 2015–2016 SIOR Global President-Elect; and Cynthia Shelton, CCIM, CRE, senior managing director of investment sales, LandQwest.
By Peg Ritenour, OAR Vice President of Legal Services/Administration
Ohio REALTORS are being contacted more and more by out-of-state agents with a client interested in buying or leasing commercial real estate located in Ohio. Obviously this could be a referral situation, but could the out-of state REALTOR actually represent the buyer or tenant — showing property and negotiating a lease or purchase contract — if he’s not licensed in Ohio? The answer is yes, but specific requirements have to be followed so you and the out-of-state REALTOR don’t find yourself in hot water with the Division of Real Estate.
Legislation permitting such out-of state licensees to practice commercial real estate in Ohio was spearheaded by OAR and became effective in 2002. Commercial real estate is defined as any property other than real estate with one to four family units. Thus, this legislation applies to unimproved land or property with five units or more. If a property has 1-4 residential units, an Ohio license is required to participate in the transaction beyond a referral.
To make sure that the out-of-state broker followed Ohio law and that Ohio brokers and consumers weren’t put at risk, certain requirements were included in the legislation. Under Ohio’s law a broker licensed in another state is permitted to fully represent a client in an Ohio commercial/industrial transaction as long as several requirements are met. The out-of-state broker must:
- Work in cooperation with an Ohio real estate broker
- Enter into a written agreement with the Ohio broker that includes the terms of cooperation and compensation and a statement that the out-of-state commercial broker and its agents will agree to adhere to the laws of Ohio
- Furnish the Ohio broker with a current certificate of good standing from any jurisdiction where the out-of-state commercial broker maintains an active real estate license
- Sign an irrevocable written consent that legal actions arising out of their conduct may be commenced against them in Ohio
- Include the name of the Ohio broker on all advertising
- Deposit all escrow funds, security deposits, and other money received by either the out-of-state commercial broker or the Ohio broker in the trust or special accounts maintained by the Ohio broker
- Deposit records and documents related to the transaction with the Ohio broker
To assist our members who want to work with an out-of-state broker under this law, OAR has prepared sample cooperative agreements and a “Consent to Jurisdiction” form.
- A Cooperative Agreement (pdf document) setting forth the terms of cooperation and compensation and a statement that the out-of-state broker and its agents agree to adhere to Ohio law.
- An Irrevocable Consent to Jurisdiction (pdf document) signed by the out-of-state broker.
It is important for Ohio REALTORS to recognize that the above provisions apply when an out-of-state broker agent seeks to participate in the sale of commercial property located in Ohio beyond a mere referral. If an Ohio licensee wishes to sell or lease real estate located outside of Ohio, it is necessary that they contact the Real Estate Commission of the state where the property is located to determine what requirements must be met in order to do so.
Legal articles provided in the OAR Daily Buzz are intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.
By Stephen K. Hall, JD, LLM, Member — Zaino Hall & Farrin LLC
Real property owners received their real estate tax bills this past December and January. Now is the time to evaluate whether your property is appropriately valued. Ohio real estate taxes are imposed based on the fair market value of the real estate. Even if you have already paid the first half or all of the 2015 tax year tax liability, the tax can be recovered if it was paid on an overvalued property.
Ohio law requires that county auditors re-appraise real estate every six years for purposes of calculating the value of the property that will be used for computing the real estate taxes. The appraised values are also updated every three years, generally through the use of a computer-based system. Because real estate values are constantly fluctuating, the county auditor’s valuations may not accurately reflect the true value of your property for a variety of reasons. Furthermore, different regions of Ohio are experiencing different trends in real estate values.
Deadline is March 31, 2016
The deadline for filing formal complaints with the county auditor is March 31st of the year following the tax year whose value is being contested. For example, tax year 2015 complaints may be filed between Jan. 1, 2016 and March 31, 2016.
Process of the Appeal
Pursuing an appeal of your real estate taxes can be daunting and is fraught with risk — it is usually worthwhile to retain a professional with experience with navigating such appeals. The key is to first determine whether an appeal makes economic sense. The following is an outline of the approach Zaino Hall & Farrin LLC takes to real estate tax appeals.
1. Review the valuation that the county auditor has assigned to your property.
“Market Value” is the value that the auditor alleges that your property is worth (generally, what a typically motivated buyer and seller would agree is the fair market value or the value that it would sell for in the open market).
If the county’s value is higher than the price at which you believe the property would sell in the open-market, an appeal may be advisable.
“Taxable Value” is 35 percent of the value that the auditor alleges is the “market value.”
The “Effective Tax Rate” that you may see on the tax bill is somewhat complex because the starting point tax rate is first reduced by deductions (H.B. 920 tax reduction factors tax rollbacks, etc.) and then is applied against the “Taxable value” described above.
2. File the Appeal: After reviewing the pros and cons of filing the complaint, the owner’s attorney may file a complaint with the auditor not later than the deadline of March 31, 2016.
3. BOR Hearing Scheduled: The Board of Revision assigns a hearing date at which time the owner is permitted to present evidence of the fair market value of the property. However, the school district in which the property is located may file a counter-complaint alleging a different fair market value.
4. Prepare for Hearing: The taxpayer gathers information about the property’s fair market value (sale price of the subject property, an appraisal, rent rates for comparable property, etc.).
5. Attend BOR Hearing: At the Board of Revision hearing, the owner, his or her attorney, and expert witnesses regarding the fair market value appear to request a reduction in the taxable value of the property.
When weighing the benefit of an appeal, taxpayers must realize that a favorable decision will impact more than merely the current year taxes. Potentially, a successful appeal could reduce real estate taxes for several years, depending on the cycle of revaluation for the particular county in Ohio.
For more information on tax appeals, click here.
Source: SALT BUZZ (Feb. 4, 2016), Zaino Hall & Farrin LLC
By Philip McGinnis, ACoM, ALC, CCIM
While the most publicized physical attacks on real estate agents have involved residential agents, commercial agents are equally at risk. Additionally, it’s important to remember that not all safety and security risks are external.
Currently, many markets are faced with a high office and industrial vacancy rate. These properties present huge risks to REALTORS because they are typically isolated from populated areas, and are often difficult to access. Many of the same safety tips employed by residential agents are relevant for commercial practitioners including care with personal information, verifying customer information, announcing your showings, scouting locations early, and keeping phone in hand. Many office, multifamily and industrial properties have security cameras and security systems, which will not be very helpful if nobody knows you’re there. Finding the criminal after the crime is committed is not as beneficial as thwarting the criminal before or during the crime by having the appropriate maintenance and risk management processes in place. IREM offers a number of forms and checklists for both residential and commercial properties for this purpose.
Vacant land listings present unique challenges to safety and security because large parcels with woodlands offer obstructions to view of passersby. Vacant land parcels also contain ditches and low spots that present accident hazards. It is not uncommon for farmers to bury tree stumps, pesticides, construction debris, used tractor batteries, and other such materials in their properties, which create obvious safety risks. Prepare in advance by following the advice of REALTORS Land Institute’s 2015 President Terri Jensen, who published a useful article on how to stay safe in rural environments.
New construction sites for multi-family, self-storage, or any other large commercial property present hazards due to the overall size of some projects, and obstructions like fencing often prevent full views to the backs of the properties. Personal safety basics like wearing appropriate gear (e.g., hard hats, sturdy shoes) and making sure the property has adequate lighting are easy ways to protect yourself. The International Association of Certified Home Inspectors and Insurance Institute for Business & Home Safety have both published articles with additional safety tips relevant for commercial professionals who work with varying property types.
Smart phone apps and other safety products enable agents to send alert signals via phone, text, social networks and email to your emergency contacts along with a GPS location; a list of expert resources is available on the NAR website. Preparing a prospect form, an agent form, and an itinerary form, among others, will allow your co-workers and family members to know where you are, and who you are with. Developing a distress code will likewise allow you to alert others to send help.
Not all risks to real estate agents are external. Commercial property brokerage is a high-stress profession, and the threat of heart attack or stroke is ever present; for instance, if an agent goes into cardiac crisis, every moment is crucial. Being able to quickly contact emergency responders is critical to survival. Adding ICE (In Case of Emergency) entries into your smart phone’s contact list enables any prospect or client to be able to dial directly to someone who can send immediate assistance. Dialing 9-1-1 is not always reliable on a cell phone, as some calls are directed to towers outside of the service area where the casualty actually occurs.
These tips are simple enough to incorporate into your business right away. The only thing more tragic than a REALTOR being harmed while doing their job is knowing that the harm may well have been prevented with some simple best practices.
Philip McGinnis, ACoM, ALC, CCIM, of Dover, Delaware, brokers, manages, and appraises commercial properties, and has been active in REALTOR Association activities for more than 35 years.
Republished from the National Association of REALTORS, July 2015
Ohio Association of REALTORS President Greg Hrabcak spearheaded an impressive fundraising effort for the industry’s political action committee at an awards function for commercial and industrial REALTORS in Columbus.
According to Columbus Business First, the effort raised nearly $20,000 for the Central Ohio REALTORS Political Action Committee (CORPAC):
The HER Commercial agent told the gathering of 186 about Gov. John Kasich’s plans to raise the commercial activities tax on business revenue and the sales and use tax – again – under the proposed state budget and extend it many professional services that real estate brokerages contract with, such as lobbying and market analysis.
The proposal does not include real estate brokerages – yet, Hrabcak told the real estate agents and affiliated professionals
At the federal level, the end of 1031 deferred capital gains provisions on investment properties could be in the cards.
“We’re being attacked in every direction,” Hrabcak said, and pleaded with award winners to celebrate their victory with a contribution to the Central Ohio REALTORS Political Action Committee, or CORPAC.
Columbus REALTORS Government Affairs Director Brent Swander then yelled out, “If you’re not at the table, you’re on the menu.”
The REALTORS Political Action Committee (RPAC) is a critical part of the industry’s political activities, supporting candidates who are empathetic to the issues of private property rights and the free enterprise system. Investments in RPAC are used to support candidates at the local, state and federal level.