In simple terms, a real estate consultant is supposed to provide expert advice and guidance to clients looking to buy or develop a property. People often call them “real estate counselors” or “real estate advisors.”
They mostly work with commercial investors who are interested in commercial projects in real estate instead of buyers and sellers of residential properties. You can think of them as the experts and guides in the real estate field who work behind the scenes.
They conduct thorough research as a means to help their client to make informed decisions throughout the project. Instead of fixating on a transaction, their job is to guarantee the overall investment success for the client.
Most real estate investors work either for large consulting firms or as independent consultants. When it comes to their fee, real estate consultants mostly charge a flat or hourly fee.
People often confuse them with real estate agents or property dealers. However, they both have different roles in the field of real estate.
Graana.com, Pakistan’s smartest property portal, has developed a comprehensive blog to inform you about real estate consultants, their job, the pros and cons of this job, and the types of consultancy they provide.
What Is the Role of a Real Estate Consultant?
A real estate consultant is an expert skilled enough to offer financial and investment advice to clients who want to invest in, purchase, or sell, a property.
In addition, They concentrate on helping their clients push through the real estate market and offer insight into ongoing trends.
First of all, they initiate a relationship with their clients by meeting with them to talk about objectives. For instance, a property developer may want to learn if it’s a good choice to construct a commercial building in a certain region. After understanding the client’s objectives, they begin to conduct their research.
The research might include site visits, meeting with real estate professionals who work at the regional level, and accumulating all the data that provides direction on local trends in property development. They work simultaneously with multiple clients, including construction companies, banks, businesses, etc.
They either work on their own or with a RE firm that offers the same services. Despite the widespread belief, real estate consultants are not real estate agents. In the next heading, you will get to know about the difference between the two.
Types of Consulting in Real Estate?
There are various types of real estate consulting, and often consultants specialise in working in one of them.
Some of the common types of real estate consulting are as follows.
People hire real estate consultants for their advice on property development projects.
This includes thorough research about potential sites for project development, making feasibility reports, and conducting competitive analysis.
Property development consultants mostly have a sales or marketing background. Developers go to consultants for insight into buyer trends to understand the feasibility of a project.
Real Estate Investors
Investors who want to try their luck in the real estate sector hire real estate consultants who have proficiency in this field. They guide the investors throughout the process.
In this case, consultants have to conduct a real estate economic analysis to make sure that the investment their client is going to make is a wise financial decision.
They begin the research by analysing the pricing trends, and supply and demand of the type of property. Once that is completed, they assess the property’s marketability to calculate returns under ongoing market conditions.
The outcomes of the entire analysis are used to evaluate the risk to the buyer and the prospective profit on investment. Sometimes the consultant might also study property estimation and insurance policies.
Big consulting firms provide a vast range of services to help estimate the value of a real estate investment or development project.
They have a variety of clients to whom they offer their consulting services including real estate investment trusts (REITs), other investors, lenders, business owners, and corporate real estate groups.
Real estate agents are the professionals that facilitate the buying and selling of any property. However, sometimes they also advise their clients to help them determine whether the investment is good in terms of financial benefits.
After considering all the goals of a buyer or investor, they come up with the best possible transaction. They will consider the buyer’s goals and look at all aspects of a potential transaction. As they don’t charge any fee for the advice and the end goal is to seal a good deal, their advice is completely unbiased and objective.
What are the Pros & Cons of Becoming a Real Estate Consultant?
Now that you know the part real estate consultants play in the sector, let’s carefully consider the pros and cons of working as a real estate consultant. Like any other occupation, beginning a profession as a real estate consultant comes with its ups and downs.
Just like any other job or business, the end goal is about what you make of it. There’s absolutely no set process to becoming a real estate consultant.
This means you will have so much freedom, but will also have a lot of personal responsibility. For example, as you will run your own business, you can determine whether you want to work for individual RE investors or as a member of a real estate consultancy firm.
Moreover, they have the liberty to pick their clients and decide their fee structure. Also, in terms of earnings, they make a good sum based on the project and their pay rates.
The first and foremost disadvantage of becoming a real estate consultant is that there is not going to be any official job opening.
This line of work only suits those who can take head-on challenges of starting their own business and can thrive through hardships along the way.
Besides operating the business, they are responsible for doing its marketing as well. Moreover, this career might be dependent on the condition of the real estate market. If the market is slow, investors will most probably not be interested to add another similar property to their portfolio.
Therefore, before taking this route, be ready for business to ebb and flow over time.
Difference Between Real Estate Consultant & Real Estate Agent
A real estate agent is an expert with a career in assisting in the buying or selling of real estate. In Pakistan, there is no proper training or education program for them, so they don’t have a license here.
However, in many other countries, you are required to have a certificate which permits you to practice as a real estate agent in the market.
A real estate agent, locally known as a “property dealer”, can be a buyer’s agent, a seller’s agent, or in some cases both. If you want to sell your property, you will contact a property dealer. He will list your property and manage all the offers from potential buyers.
On the other hand, a buyer’s agent suggests properties to the buyer and facilitates them with making a good offer. Both types of agents work as a representative of their clients to settle an offer and finalise a contract.
They negotiate with one another in an attempt to try and seal the best deal for their clients.
Unlike real estate consultants, real estate agents are obliged to conduct research or give guidance on real estate purchases. Their job is just to ensure a smooth deal for buyers and sellers. They mostly remunerate a commission based on a certain percentage of the property sale rate.
Skills Required to Become a Real Estate Consultant
There is a certain skill set required for people who aspire to be real estate consultants. Here are a few of them:
An RE consultant must possess great analytical skills so that they can effectively assess properties and investments for the clients, conduct thorough research, and assemble information to help the client understand more regarding ongoing trends in the real estate market.
Attention to Detail
Another must-have skill for consultants is a keen eye for minute details to understand even the tiniest details of a contract.
A consultant’s primary goal is to assist their client to achieve their objectives. That being the case, they require active listening skills to understand the client’s demands and goals before offering advice.
A real estate consultant can work with many clients or agents. They have to have outstanding communication skills to effectively put their proposal and charges to their clients.
Social skills are also necessary for consultants when they have to generate leads through friends, family members, and business partners.
Good social skills can also help you generate leads through your clients, as they might refer you to someone they know in the future.
Negotiation is one of the most essential skills that a real estate consultant should possess. It enables them to give offers on a property’s purchase and convince a client to buy it.
How good of a deal their client gets, is very much dependent on the communication skills of a real estate consultant.
How to Become a Real Estate consultant?
There’s no defined path to follow to open up your real estate consulting business. In developed countries like the US, there are a few certificates that you have to acquire before practising as a professional real estate consultant, but they also do not have a defined path.
This was all about real estate consultants. For more information, visit Graana blog.