Most residential real estate agents are not experienced or knowledgeable enough to manage the sales and leasing of commercial properties, according to the president of the Real Estate Institute of NSW (REINSW), John Cunningham.

The industry heavyweight and founder of Cunninghams Real Estate Agency is leading the charge for stricter training and national accreditation requirements for both residential and commercial real estate licenses.

Speaking to Pine Property, Cunningham said that many real estate agents are not suitably qualified to manage residential real estate, let alone commercial which he describes as “highly technical and far more complex”.

“It has really become a bit of a joke in our view. You can become a real estate agent in less than a day’s training and get your license from a dodgy RTO in a matter of weeks without having any experience whatsoever.”

John Cunningham

Commercial agents most qualified:

Cunningham described commercial real estate agents as “the most qualified in the country”, with a business degree generally being a prerequisite to work for a major commercial firm.

“When you are dealing with commercial property there are a lot of considerations a residential agent doesn’t even go into. A lot of highly technical and financial knowledge is required.”

Cunningham cited knowledge of health and safety requirements, land tax, council regulations, zoning, strata, height restrictions and leasing incentives such as rent-free periods and fit-out contributions as being critical to commercial real estate.

Other specialty knowledge most residential agents are unlikely to hold includes the implications of GST and land tax in commercial transactions along with an understanding of disclosure statements, the Retail Tenancy Act and recent legislative changes.

“A lot that can go wrong if you are dealing with an inexperienced, unskilled agent,” Cunningham said, citing the extreme case of a residential agent underpricing a commercial property in Sydney’s Eastern Suburbs by $3.5 million.

“That is why the commercial industry has gone down the path of requiring higher qualifications,” Cunningham said.

Commercial Market Knowledge:

In addition to technical knowledge, an experienced commercial agent will hold deep insight into local market knowledge, according to Cunningham.

“This is where local experience comes into play. It requires exposure to a lot of transactions and continuous learning.”

In addition to a commercial-specific database and local knowledge of gross and net sale and lease values, a commercial specialist will know who is interested in buying, selling or leasing and has contacts with lawyers, strata managers and commercial fit-out operators, Cunningham said.

“The professional has it all wrapped up – both the technical knowledge and market knowledge. The qualifications to get a [real estate] agent’s license don’t take that into consideration.”

Yet with Cunningham’s drive to increase the accreditation requirements of real estate agents as part of a nationally recognised licensed, that looks set to change.

Conjunctions the solution

For the residential agent who does not hold commercial knowledge yet wants to best service a client, they will often work in conjunction with a commercial specialist, according to Patrick Kelleher, 15-year commercial specialist and director of Northern Beaches commercial agency, Pine Property.

“It combines the existing relationship with the expertise of the commercial agent who can provide an independent analysis and help manage the campaign, condition and educate buyers and tenants and ultimately help achieve the highest possible rates per square metre or sale price.”


“If you don’t hold that commercial knowledge you are doing your client a disservice,” Kelleher said.

“Commercial agents are generally quite happy to conjunct with residential or other commercial agents. Residential agents typically work exclusively and that can influence their approach to commercial property.”

“For the inexperienced, it has the potential to cost the client dearly.”