Even though both the Commercial and Residential Real Estate involves the selling or buying of property, that is where the similarities end. You cannot really compare these two; it would be like comparing an orange with an apple.
The Difference between Commercial and Residential Real Estate:
Commercial Real Estate
In Commercial Real Estate the focus is on Business. The property involved is either sold or leased, to achieve a predetermined objective. The property is used as an investment that will generate return funds. In other words, for business and getting return funds.
For Commercial sales, the selling process looks at numbers and investment return calculations.
Commercial Real Estate deals involve much bigger amounts of money. Commercial purchases can include several units, creating a larger one, for example, apartments, shopping centres, townhouses, etc.
Commercial Deals are much more complicated and are following a quite different set of steps and guidelines. The transaction cycle for commercial purchases can take several years.
Residential Real Estate
Residential Real Estate is revolving around the needs and wants of families and the homeowner. These properties are purchased only for individual use and mostly provide housing for families.
Residential sales, on the other hand, are more a personal, emotional type of purchase. The house may just feel like the right one to buy. A key factor might be the return on investment in the future.
The Value of Residential Purchases is calculated and determined by market rates of houses in the specific area. You might only need a small down payment, and finance the rest of the price through taking out mortgage financing from the bank.
The selling or buying of residential property from the beginning with the purchase offer until the closing of the deal, are executed through a fairly well known, established set of steps. It mostly takes a few months, rather than years to finalize everything.
These are only a few ways in which residential real estate differs from commercial real estate. The parties involved, the money involved, the route the transactions follow, almost everything is different, except for the fact that it is property being sold or purchased, with the help and involvement of a Real Estate Agent.