How is the "normal" commission pd on a long term lease. Is it a %of the entire lease, or a number of months?

In Leasing Property - Asked by Janis R. - Nov 8, 2010
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Answer(s)

Barbara B.
Broker/Agent
Tucson, AZ

Most leasing commissions paid a percentage of the total dollar value of the lease. This commission is usually paid at that percentage for up to five years of the lease term. If the lease is longer, the percentage of commission paid will generally be negotiated.

Nov 8, 2010
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Scott G.
Broker/Agent
Chicago, IL

There is no "normal" commission. Call surrounding Properties offering similar situations and evaluate how what they offer compares to your situation. Always remember, just like the deal presented, everything is negotiable.

Nov 9, 2010
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Tom P.
Broker/Agent
Boca Raton, FL

Commission is "normally" 6% of the base rent for first term of the lease, then if tenant is to exercise their option (if any) a commission is then paid on that option based upon what is negotiated.

Nov 9, 2010
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Rob B.
Chandler, AZ

Janis.....
I would advise paying attention to Business L's answer. It is precisely and legally correct. There are many variations of commissions charged. One notable method is 5-4-3-2-1 or variations thereof. This method offers one 5% for a one year lease or the first year of a longer lease, 4% for the 2nd year of a two year lease, 3% for the 3rd year, etc. In this example it is an over all 3% commission on a five year lease. The shorter your lease the larger the percentage will be.
The point I have made is find a percentage amount that you believe your services are worth, leave a little room for negotiations based upon the length of the lease, the size of the space and the location/quality of the property. If you are the listing agent, be sure to either factor into the lease paying for a tenant rep, or make it clear to the owner that your contract is for your representation only and it will have to be determined thereafter what the tenant rep will charge for his or her services.
Good luck Janis….
Rob Baird, CA RE License #544165 (One of the oldest, active licenses in CA) 951 515-5855

Nov 9, 2010
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Dorene S.
Broker/Agent
Torrance, CA

Commission is a percentage of the lease, beginning with year on..through to year 5. Normally the percent decreases as the years increase.

Nov 9, 2010
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