Choose the best commercial real estate broker by checking three things: a current license you can verify, recent closed deals in your property type and market, and a written plan for pricing, financials and marketing. The best brokers normalize the T-12, present clean numbers, reach qualified buyers and 1031 exchangers, and manage due diligence through closing.
Why does hiring the best commercial real estate broker affect your sale price?
Hiring the best commercial real estate broker affects your sale price because buyers judge trust and competence from how the financials and listing are presented. Carson's view is that small presentation errors, such as leaving one-time expenses in the T-12, can cut perceived value by millions, while normalized numbers with clear footnotes and a concise listing that addresses objections early draw stronger offers.
Key takeaways
- A trust signal as small as a stated break-even occupancy rate or break-even oil price can swing conversion rates by 30 to 40% with retail investors.
- Switching insurance from monthly to annual prepayment can skew trailing 12-month numbers and reduce perceived value by $3,000,000 or more without changing ongoing NOI.
- On a 28-property, 3,200-unit portfolio, $600,000 in one-time lawsuit settlements implies a $10,000,000 valuation hit at a 6% cap rate if left in operating numbers.
- Depreciation, amortization and interest that differ from a buyer's underwriting should be removed from the T-12 and disclosed in footnotes rather than buried in the numbers.
- Listing details such as proximity to three-phase power signal optionality, for example for micro data centers, and help accelerate buyer conviction even on small vacant properties.
Something as small as a break-even occupancy rate or a break-even oil price can swing conversion rates by 30–40% with retail investors. As an investor, I’ve learned that details matter more than most people realize.
The core problem starts with attention then shifts to trust very quickly. When a buyer first views a property, you realistically have less than a minute to earn both interest and trust. Yes—both interest and trust.
The bigger the investor or asset it becomes even more true. That’s why trust triggers like break even matter, it’s a TRUST and competence signal.
As properties scale, the stakes rise and so does the importance of how we speak to buyers.
How One-Time Expenses in the T-12 Lower Your Sale Price
The core problem with off-market deals isn't the absence of a formal brokerage agreement, it's the haphazard, inconsistent way sellers often prepare financials and marketing materials, all in an effort to avoid paying a modest fee. But it goes back to what we talked about first, those financials need to signal TRUST and in most cases they don’t.
Consider this: Prepaying insurance annually (after previously paying monthly) can skew your trailing 12-month (T-12) numbers, reducing perceived value by $3,000,000 or more, even though it doesn't affect ongoing NOI.
The stakes are exponentially higher on a $300+ million portfolio.
In a recent 28-property multifamily portfolio offering totaling 3,200 units, only two assets were involved in tenant lawsuits from a previous year that settled for a combined $600,000.
At a 6% cap rate, that one-time expense implies a $10,000,000 valuation impact($600,000 ÷ 0.06), despite having no bearing on ongoing operations.
Items like this should be clearly stripped out of the operating numbers and disclosed transparently in the footnotes.
Leaving these non-recurring items in the operating financials signals a lack of understanding of true NOI and sophisticated buyers will punish it with lower offers. This isn't a math lesson or about hiding anything, it's a value and competence statement.
Why Depreciation and Paper Losses Belong in Footnotes, Not the T-12
Paper losses can benefit current owners through tax advantages, but when depreciation, amortization, or interest expenses differ markedly from a buyer's normalized underwriting, it's far better to remove them from the T-12 and disclose them clearly in footnotes—rather than leaving them buried in the trailing numbers.
The purpose of financials is to normalize income, distinguish recurring from one-time items, and reveal sustainable cash flow. That’s why footnotes exist under GAAP.
Under U.S. GAAP, footnotes are an integral part of financial statements, providing essential context needed to fully understand the numbers (FASB ASC Topic 235). In private real estate offerings, however, this isn’t about technical GAAP compliance—public company standards don’t apply. It’s about clarity, credibility, and valuation integrity.
This is fundamentally about perception—not just of the asset, but of you as the seller and that impression is difficult to undo after the T-12 hits an inbox. Anything short of meticulous financials creates confusion, mispricing, and pricing friction—often ending in discounted or low-ball offers.
On larger portfolios, commissions and fees can be negotiated, being unprepared shouldn’t be.
Details in listing descriptions matter just as much for small vacant properties as for large ones.
Highlighting features like proximity to three-phase power (ideal for micro data centers) isn't about assuming a specific use, it's a smart value signal that underscores optionality and accelerates buyer conviction. This signals to the restaurant owner eyeing the industrial conversion that the property could be snapped up by a tech company at any moment.
Concisely listing the top selling points while also addressing objections early, whether it’s delivered vacant, redevelopment, or value-add, filters out the wrong buyers and attracts the right ones. More importantly, it builds trust by showing you’re not hiding the ball.
Whether you own a $1M property or a $500M+ portfolio,I can help—worldwide. I can properly position and often source off-market buyers on larger deals. No portfolio is too large. Industrial, Multifamily, Retail, Office, RV, Storage, etc.
In the NFL, most games come down to two or three plays that decide the outcome. Selling a property is no different—small mistakes can swing the entire result.
The best brokers can execute, so do yourself a favor and hire the best commercial real estate broker you can fine.
Wishing you a Merry Christmas and a Happy New Year. Thank you for your support, and I look forward to working together in 2026.
Frequently Asked Questions
How can a one-time expense lower a commercial property's valuation?
Buyers capitalize the operating numbers they see, so a non-recurring expense left in the T-12 is treated as ongoing. In one 3,200-unit multifamily portfolio, $600,000 in settled tenant lawsuits implied a $10,000,000 valuation impact at a 6% cap rate. Such items should be stripped out of operating numbers and disclosed transparently in footnotes.
Should depreciation and interest expense be included in a T-12 for sale?
When depreciation, amortization or interest expense differ markedly from a buyer's normalized underwriting, it is better to remove them from the T-12 and disclose them in footnotes. The purpose of sale financials is to normalize income, separate recurring from one-time items and show sustainable cash flow; buyers can calculate their own depreciation and paper losses.
Do GAAP footnote rules apply to private real estate offerings?
No. Under U.S. GAAP, footnotes are an integral part of financial statements (FASB ASC Topic 235), but public company standards do not apply to private real estate offerings. Using footnotes in a private sale is about clarity, credibility and valuation integrity, not technical compliance, and it helps prevent confusion, mispricing and low-ball offers.
Why do off-market commercial deals often sell for less?
Carson's view is that the problem with off-market deals is not the missing brokerage agreement but the haphazard, inconsistent way sellers often prepare financials and marketing materials to avoid a modest fee. Those materials frequently fail to signal trust, and sophisticated buyers respond to that uncertainty with discounted or low-ball offers.
What should a commercial property listing description include?
A listing should concisely state the top selling points and address objections early, such as whether the property is delivered vacant or suited to redevelopment or value-add. Value signals like proximity to three-phase power highlight optionality without assuming a use. This filters out the wrong buyers, attracts the right ones and builds trust.
Frequently Asked Questions about Hiring a Commercial Real Estate Broker
Common questions about choosing and working with a commercial real estate broker, from commissions and agency agreements to pricing a sale and evaluating deals.
Why hire a commercial broker
Why do I need a commercial real estate broker?
You don't legally need one, but most owners and buyers net more with one. A commercial broker prices the asset from real comps and income, packages the financials into an offering memorandum, markets it to qualified buyers and 1031 exchangers, runs a competitive bid process, and manages due diligence and re-trades through closing. Without that process, sellers often accept the first offer and buyers overpay or miss problems in the rent roll, leases, or expenses.
What do investors look for in a good commercial real estate broker?
Investors look for specialization, a real buyer list, and honest underwriting. A strong broker knows the asset type and submarket, has recent closed comps, can name active buyers and lenders, and gives a pricing opinion backed by numbers rather than the highest figure that wins the listing. Responsiveness, clean marketing materials, and a track record of closing without major re-trades matter as much as firm size.
Is it normal for commercial brokers not to follow up after a buyer gives them search criteria?
Yes, it is common, especially for newer or smaller buyers. Most commercial brokers are paid by sellers and prioritize buyers with proof of funds, a closing history, and a clear buy box. You get better follow-up by sending a one-page criteria sheet with price range, asset type, markets, financing, and timeline, showing proof of funds or a lender letter, and closing quickly when a fit appears. Some buyers sign with one buyer's broker to get consistent attention.
How hard is it for an inexperienced investor to close a commercial real estate deal?
It is harder than residential but very doable on smaller deals. Sellers and brokers favor buyers who can prove funds, line up financing, and close on schedule, so a first-time buyer usually needs a larger down payment, a lender who knows commercial loans, a real estate attorney, and an experienced broker or partner. Starting with a small multifamily, retail, or light industrial property under a few million dollars builds the track record that larger deals require.
Choosing a firm and type of representation
Is Marcus & Millichap a step below CBRE, JLL, and Cushman & Wakefield?
Not a step below, but a different focus. CBRE, JLL, and Cushman & Wakefield dominate institutional sales, leasing, and corporate services, while Marcus & Millichap concentrates on private-client investment sales, often in the under-$20 million range. Other models, such as cloud-based firms like eXp Commercial where agents can share in the parent company's equity, also compete. The individual broker's track record in your asset type and market matters more than the logo.
What are the pros and cons of landlord representation versus tenant representation in commercial leasing?
Landlord (listing) representation offers steadier, recurring business tied to buildings you control, but requires marketing spend and owner relationships. Tenant representation requires no inventory and pays well on large leases, but income is lumpier and depends on finding tenants before lease expirations. Commissions are usually paid by the landlord on both sides, typically as a percentage of the total lease value. Many brokers start in tenant rep and add landlord listings as their relationships grow.
What financial documents can a newly formed LLC give a landlord when leasing its first commercial space?
A new LLC typically provides a business plan with financial projections, the owners' personal financial statements and tax returns, credit reports, bank statements showing capitalization, and the formation documents. Because the entity has no operating history, landlords usually ask for a personal guaranty, a larger security deposit, or a letter of credit. A tenant-rep broker can often negotiate a burn-off guaranty that shrinks after a period of on-time rent payments.
Commissions and fees
Is it common for a seller to refuse to pay a buyer's broker commission on a $10 million commercial deal, and is 2.5% reasonable?
It is not unusual. Commercial commissions are fully negotiable, and on an investment sale around $10 million the total fee is often in the 2% to 4% range, split between listing and buyer brokers. A 2.5% buyer-side fee is high at that price point; 1% to 1.5% is more typical. If the seller won't pay, the buyer's broker agreement should state whether the buyer covers the fee or the broker accepts the shortfall.
How can I negotiate a lower commission when selling multiple properties through the same broker?
Offer a portfolio listing in exchange for a tiered or blended rate. Brokers will usually cut the percentage when the total deal volume rises, because marketing and buyer outreach overlap. Common structures include a lower rate on each sale after the first, a sliding scale that drops above set price thresholds, or a bonus for beating a target price. Get the terms, any protection-period clause, and how co-broker splits are handled in writing.
Listing agreements, buyer agreements, and dual agency
Can someone hold an exclusive right-to-sell agreement on a commercial property without a real estate license?
Generally no, if they expect to be paid for selling someone else's property. State license laws require a broker's license to list, market, or negotiate real estate for others for compensation, and a listing agreement with an unlicensed person is usually unenforceable. Owners can sell their own property, and wholesalers typically assign purchase contracts instead, but many states now regulate that practice too. Check your state's real estate commission rules before marketing a property you don't own.
Should a buyer sign an exclusive buyer broker agreement for commercial real estate?
It can make sense when the broker brings real value. An exclusive agreement gets you priority on off-market leads, underwriting help, and a negotiator on your side, but it ties you to one broker for a set term and may obligate you to pay a fee if the seller doesn't. Keep the term short, limit it to specific property types or markets, define how the broker is paid, and include a clear cancellation clause.
Should a seller's broker also represent the buyer if the buyer offers only a 2% commission?
Representing both sides is dual agency, and it is legal in most states, including Tennessee, only with written informed consent from both parties; a few states prohibit it. The commission offer shouldn't drive the decision. A dual agent can't advocate for either side's price, so the seller should weigh whether a single broker can fairly run competing offers. Many sellers allow it on a reduced total fee, or ask the buyer to bring separate representation.
Should I hire my own broker if the seller of a multi-tenant office building won't share the rent roll and P&L?
Yes, or walk away. A seller who won't produce a rent roll, T-12, and leases for an income property is either hiding problems or not serious. A buyer's broker can push for the documents, pull market rents and comps, and make any offer contingent on receiving and verifying full financials, tenant estoppels, and leases during due diligence. Never price a multi-tenant building off verbal income figures.
Selling for the best price
Should I sell a cash-flowing commercial property if I receive an unsolicited offer about 50% above my purchase price?
Treat it as a pricing signal, not a decision. Get a broker opinion of value first, since an unsolicited offer is often below what a marketed sale would bring. Then compare after-tax proceeds, including depreciation recapture and capital gains, against keeping the cash flow, and decide whether a 1031 exchange into a better property makes sense. If you would sell, exposing the property to the market usually beats accepting a single bidder's number.
Why would an owner sell off-market directly to a buyer instead of hiring a broker to maximize proceeds?
Usually for speed, certainty, privacy, or to avoid a commission. Owners may want a quiet sale to protect tenants and employees, avoid showings, close quickly for a 1031 or estate need, or sell to a known buyer with proven closing ability. The trade-off is price: without competitive tension, owners often leave money on the table that exceeds the commission saved. A broker can also run a confidential, invitation-only process instead of a public listing.
Should I sell a commercial property that needs major repairs at a discount or renovate it first?
Selling as-is is usually better when you lack the capital, time, or construction experience, or when buyers can do the work more cheaply. Renovating first makes sense when the added value clearly exceeds cost, carrying expense, and risk, such as raising rents to market and lowering the cap rate buyers apply. Get contractor bids and a broker's as-is versus as-improved valuation, then compare net proceeds and timing before deciding.
Can you sell a commercial property to a REIT?
Yes. Public and private REITs buy properties regularly, usually through their acquisition teams and often via brokers who know their buy boxes for asset type, size, location, and tenant credit. Owners who want to defer taxes may contribute property to a REIT's operating partnership in exchange for OP units, known as an UPREIT or Section 721 transaction. That route has trade-offs in liquidity and control, so review it with a tax advisor first.
Financials and pricing an offer
How big a gap between the T-12 and the offering memorandum is too big before walking away?
There's no fixed cutoff, but a net operating income gap of more than about 5% to 10% demands a clear explanation. Offering memoranda often show pro forma or annualized figures, so the question is whether the difference comes from documented lease-up, signed rent increases, or one-time expenses, or from optimistic assumptions. Underwrite and offer on verified in-place income, and only walk away if the seller's price relies on numbers you can't verify.
Is a T-12 that beats the offering memorandum a good sign, and should expenses be normalized to market?
It can be a good sign, but verify why. A T-12 that outperforms the OM may reflect real rent growth or a conservative broker, or deferred maintenance, missing management fees, or an outdated tax assessment that will reset after sale. Yes, normalize expenses: add market-rate management, reserves, insurance quotes, and reassessed property taxes so your net operating income reflects what you will actually operate.
What questions should a buyer ask a listing broker beyond the T-12, offering memorandum, and rent roll?
Ask why the owner is selling and what timing they need, what offers have come in and at what price, and how pricing was set. Ask about deferred maintenance, capital projects, environmental reports, pending lease renewals or tenant issues, property tax appeals, insurance claims, and any litigation. Request copies of leases, service contracts, utility bills, and the most recent survey and title work so you can verify the numbers before committing.
How do investors get from a cap-rate-based market value to an actual offer price?
They start with verified, normalized net operating income, divide by a market cap rate, then adjust. Typical adjustments subtract capital needs, lease-up and vacancy costs, below-market leases, and closing costs, and check the result against financing: debt service coverage, loan-to-value, and target cash-on-cash return. The final offer is the lower of the cap-rate value and what still meets the investor's return hurdle, with room left to negotiate.
Finding and evaluating deals
How do you find off-market multifamily deals, and does building relationships with local brokers work for first-time buyers?
Yes, broker relationships work, but brokers send pocket listings to buyers who have proven they can close. First-time buyers improve their odds by sharing a clear buy box and proof of funds, responding quickly with feedback or offers, and closing on smaller deals first. Pair that with direct outreach to owners using county records, networking with property managers and lenders, and following up on expired or withdrawn listings.
How do you verify property owner information before contacting off-market sellers?
Start with county assessor and register of deeds records to confirm the owner of record and mailing address. If the owner is an LLC or corporation, look up the entity on the secretary of state's website to find its registered agent, officers, or members. Skip-tracing services can add phone numbers and emails, but cross-check them against public records and respect do-not-call and privacy rules when reaching out.
Can you still find multifamily deals at an 8% cap rate, and how should you source them?
They exist, but rarely for stabilized, well-located properties. An 8% cap rate usually signals smaller or tertiary markets, older Class C buildings, heavy deferred maintenance, or management problems. Source them through local brokers, direct mail to long-term owners, and lenders or property managers who see stress early. Confirm the cap rate is based on normalized expenses and real collections; many listed 8% deals fall to 6% once taxes and repairs are added.
Is a distressed multifamily property really a good deal?
Only if the discount covers the real cost of fixing it. Distressed properties often carry high vacancy, unpaid rents, deferred capital needs, code violations, and difficult tenants, plus limited financing options. Underwrite the full renovation budget, lease-up time, carrying costs, and a contingency, then compare the stabilized value to your all-in cost. If that margin isn't wide, typically 20% or more, the property is distressed but not a deal.
How should an investor evaluate private commercial real estate investment opportunities?
Evaluate the sponsor first, then the deal, then the structure. Check the sponsor's track record through full cycles, their own capital invested, and how they handled past problems. Stress-test the property assumptions on rent growth, exit cap rate, and debt maturity. Then read the operating agreement for fees, the preferred return, distribution waterfall, capital-call rights, and liquidity limits. Have an attorney or CPA review offering documents before investing.
Should you buy a $2 million light industrial property leased to tenants paying below-market rent?
It can be a strong buy if you can actually reach market rent. Below-market leases create upside, but check how long they run, whether tenants hold renewal options at fixed rates, and the cost to re-lease or improve space. Price the deal on in-place income, not the projected rent, so the upside is yours rather than the seller's. Short remaining terms and strong local industrial demand make the opportunity more valuable.
What should a first-time buyer consider on an NNN building leased to a national company with about 43 months left at roughly a 10% cap rate?
The high cap rate reflects lease rollover risk. With under four years left, value depends on whether the tenant renews, so ask about their use of the site, renewal options, and capital spent there. Estimate the cost and downtime to re-lease or repurpose the building if they leave, check zoning and alternative uses, and expect lenders to be cautious. Buy only if the property still works at a dark-building valuation.
What surprises do owners most often wish they had anticipated before buying a multifamily or commercial property?
The most common surprises are property tax reassessments after sale, rising insurance premiums, deferred maintenance on roofs, parking lots, and HVAC systems, and longer vacancy or lease-up periods than projected. Owners also underestimate management time, tenant turnover costs, and capital reserves. Thorough inspections, a reassessed tax estimate, real insurance quotes, and a reserve budget during due diligence prevent most of these.
Licensing, cost, timing and alternatives
How do I verify a commercial real estate broker is licensed in Tennessee?
Search the broker's name or license number on the State of Tennessee's Verify a License site, which covers licenses issued by the Tennessee Real Estate Commission. Confirm the license is active and check the firm it is held under. Carson Jones's Tennessee license is #382989, held through eXp Commercial.
How much do commercial real estate brokers charge?
Commercial commissions are negotiable and are set in the listing or buyer-representation agreement. Sales are usually paid as a percentage of the price, and the percentage typically falls as deal size rises; leases are usually paid on the total lease value. Compare what is included: valuation, the offering memorandum, marketing reach and transaction management.
How long does it take to sell a commercial property with a broker?
A few months is common. Expect time to gather and normalize financials and build the offering memorandum, a marketing period to draw offers, then due diligence and financing contingencies, which often run 30 to 60 days before closing. Clean, credible numbers shorten the process because they reduce re-trades and buyer drop-outs.
What are the risks of choosing the wrong commercial broker?
The wrong broker can misprice the asset, present messy or unnormalized financials that cut perceived value, market to too few qualified buyers, and lose control of due diligence, leading to re-trades or a failed sale. A listing that sits too long also becomes stale, which weakens your negotiating position.
What are the alternatives to hiring a commercial broker?
You can sell off-market directly to a buyer, list on an online auction platform, or market the property yourself. These can save commission, but you take on pricing, buyer screening, negotiation and closing risk, and you usually reach fewer buyers. That is why many owners net less without competitive bidding.
What is the next step to work with Carson Jones?
Share the property, your goals and your timeline. Carson will review the numbers and outline pricing, positioning and a marketing plan. Contact Carson or read how he works.
Sources: State of Tennessee — Verify a License · Tennessee Real Estate Commission — Verify a real estate agent's license before conducting business
Selling or buying commercial property? Let's talk.
Brokerage and equity participation for commercial real estate owners, investors, and family offices — worldwide, through the eXp Commercial platform.
Carson Jones
Carson Jones is the host of Carson's Corner: Commercial Real Estate, author of The Red Flag Playbook, a licensed commercial real estate advisor and business broker, and the founder of Passive Investments. With 18 years of experience as an entrepreneur and 12 years specializing in passive investing, Carson works with high-net-worth individuals, family offices, business owners, and sophisticated investors as a broker and principal.
Carson holds a BBA in Finance from Baylor University and his Tennessee commercial real estate license (#382989). He actively pursues acquisition and equity opportunities across the United States and abroad through a worldwide network of qualified buyers, family offices, institutional investors, and top-tier developers.