How would you respond to a client that will only pay 1.5% total commission on a $6 mm NNN transaction?

In Selling Property - Asked by Dina C. - Jun 10, 2011
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Answer(s)

Gregory G.
Broker/Agent
San Francisco, CA

Are you double ending the deal?
Gregory Garver - Commercial Real Estate Broker
Broker License# 01716531
(415)968-6065
greg@nnnbrokersusa.com
Web Reference: http://www.gregorygarver.com

Jun 11, 2011
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Maria V.
Broker/Agent
Dania Beach, FL

First question, are you the exclusive listing agent ? How long is the Lease ? If you don't have listing agreement in place, it's a tough one.....you can advise Client that you will take the Lessee to competitor site that will pay you reasonable commission. Also a suggestion.......Client may be willing to pay higher commission if you spread it out in intervals. Be sure your agreement includes lien rights so you can collect if client doesn't pay.

Jun 12, 2011
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Gary B.
Appraiser
Cleveland, OH

I would say " sounds good, let's get the deal done."

Jun 13, 2011
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Mike P.
Broker/Agent
Chicago, IL

That adds up to 90k in gross commission dollars. Smile, and get the deal done! Commissions are negotiable.
There is a similarly priced parcel of land in my community, where the listing broker told me they are offering 40% of 1% of the price, to buyer's broker. Sure, I felt disgusted about that low commission, but if it was priced right, I'd try to make the deal anyways, hopefully, with one of my clients who has agreed to compensate my firm and who signed, at least, a non-exclusive buyer representation agreement with some compensation for my firm. Nevertheless, even here if a deal was made, and if I could earn just that 40% of 1% of the price, ie 24k, I would try to get it done, even without additional compensation from my buyer client.

Jun 13, 2011
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Chris R.
Broker/Agent
Denton, TX

Let's see - let me do the math.... $6M x 1.5% = ..... a nice chunk of $$$$

Jun 13, 2011
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Myrtle B.
Broker/Agent
Saint Louis, MO

1. Get the deal done and take the commission - whatever it is. 1.5% of $6MM is more useful than 100% of zero.
2. Who is your client - owner/landlord or tenant/buyer? Doesn't matter. Do the deal and get the commission.
3. I bellieve that our value as commercial REALTORS is most consistently described by transaction volume, square footage, use type; not commission earned. This sounds like a great deal and opportunity for you to improve your portfolio. Congratulations!

Jun 14, 2011
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Gerald L. B.
Broker/Agent
Old Westbury, NY

Our response has usually been that the std comm on comm'l sales has always been acceptable at 3% for our type of independent brokerage firm (not 5% charged by the national brokerage firms). We would work almoast exclusively on a deal that size. However, if we did the deal without a cobroker, we would accept 2%. It is a fair compromise and has generally been accepted.

Jun 14, 2011
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Philip L.
Broker/Agent
raleigh, NC

It is been my experience to have the compensation issue resolved up front in writing. If a buyer or seller is unwilling to put it in writing then you can make a decision if you want to gamble your time and expertise on a potential transaction that has a high degree of undervaluing your service. Buyers/Sellers and we agents can be guilty of a convenient memory. Be professional and you have a better chance of being treated like a professional. Back to your question--you are now having to sell your self again--remind your client of the presumed fee arrangement and explain why you are worth it. Under no circumstances do you ever say "Pay me what you want to" be professional and fight hard for your compensation. Try to avoid burning bridges, all transactions should be win win.

Jun 15, 2011
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Aurelio M.
Broker/Agent
Torrance, CA

Hello
Answer: 1.5% total commission isn't going to work for a variety of reasons. Most important, we need to offer a minimum of 2% to outside brokers and I don't really enjoy working for free. But I can make you a great deal. 4% total commission that I will split with outside brokers and if I sell the property myself I will reduce it to 3%. Just sign here and let's get this property sold.
If this doesn't work, sign the listing agreement along with an MLS Waiver and try to sell it yourself.

Jun 18, 2011
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David C.
Owner/Investor
Morgan Hill, CA

If you are double ending it, stop the greed and take the $90,000

Jun 24, 2011
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