What are the stardard rates for selling and leasing industrial property?

When a person sells a proerty without a broker does the total commission rate still apply or can it be cut in half since there is only one broker. What is the standard for leasing can I get the full commission up front (3 year lease) even before the lease is paid to the landlord.
In Selling Property - Asked by Alan S. - Dec 22, 2010
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Answer(s)

Michael M.
Broker/Agent
Colleyville, TX

Depends on the listing agreement.
Typically, lease commissions are paid upon execution and occupancy rather than over the term of the lease.

Dec 22, 2010
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Margaret S.
Broker/Agent
Belle Mead, NJ

There are no standard rates, all Real Estate Commisions are negotiable. Now there are companies/Brokers that do set their company rates. But none are standard

Dec 22, 2010
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Margaret S.
Broker/Agent
Belle Mead, NJ

It depends on the type of listing you have.
Usually a rental commission for 3 years is split up not all at one time

Dec 22, 2010
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Tom H.
Broker/Agent
Coral Springs, FL

on the sale - sounds like you sold an open listing- totally negotiable - should get this agreed to before you present any offers -
it is against the law to discuss specific rates of commission with other brokers - the government doesn't want price fixing- however you can ask other brokers in your area what they will pay on a co op basis for specific properties - this will give you some idea what the market is in your area. Regarding when you collect the leasing fee - this is negotiatble also - if you take it over time, protect yourself in the event of a sale - and with lein language in your listing contract - consult you legal advisors - not an attorney

Dec 23, 2010
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Rob B.
Chandler, AZ

Alan....
I read your question to be asking about a sale when there is not a listing broker involved. If this is indeed the purpose of your question, the answer I would offer begins with a question: what is the owner offering? If the commission published is 4%, then the Broker representing the Buyer is in position to go for the gusto with his LOI. He may not get it, as an acceptance of an LOI is entirely in the hands of the Seller. However, wise Sellers would usually like to move their offered properties and if a legitimate candidate is presented will not try to let the commission stand in the way.
The second part of your question has to do with leasing. It is typical that we receive our commissions at the completion of an executed lease and the tenant taking possession. (Usually 50% at execution and 50% at possession). The reason is that we have completed our work at the point of possession, if the owner accepted the terms of the lease and verified the credit and credibility of the tenant. However, there are some owners that want the agent to take his or her commission on an installment basis, often at the beginning of each year in the lease term. This is a way for the owner to mitigate some cost if the tenant defaults on a lease during any one year. This is entirely negotiable, but not typical.
Good Luck Alan.... Rob Baird, CA RE License #544165 (One of the oldest, active licenses in CA) 951 515-5855 Email: rob@capratecommercial.com

Dec 28, 2010
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Marty H.
Broker/Agent
Lenexa, KS

While certain commission rates may be more "typical" than others in a given market there really isn't anything that is "standard". Commission terms are negotiable and will vary depending on the services being provided and the respective negotiating strengths of the parties involved. If real estate practitioners got together to set Standard Commission Rates they would be subject to a Restraint of Trade Charge from the Federal Government. The same would be true if all the grocery stores in your state decided to sell milk for $10 per gallon and refused to budge from this price.
It's always best to work out the commission details before going to far with discussions regarding a sale or lease of property. Get this decided up front and, assuming you are a licensed real estate broker, get the agreement in the form of a listing agreement. Your state real estate commission and/or local board of Realtors will have sample listing agreements.
Personally, I like to see the commission paid upon the full execution of the lease. Some variations may include payment of half the fee at the time the lease is signed with the other half to be paid when the tenant takes possession and/or pays the first month's rent. This approach might make sense when dealing with first generation space where there will be a build out period of several months, etc.
With respect to getting your commission paid at the time the lease is signed, this is something that can also be negotiable. The Landlord has the option of accepting the tenant or rejecting them. If they don't want to pay the agreed commission the Landlord can decline to do the deal. In a case where the tenant has very limited finances, and presents a great risk, the Landlord may well ask to pay the commission in installments. To avoid this type of situation I'd suggest staying away from prospective tenants that don't have the financial means of opening and successfully operating their business. Ask for financial statements early on so you (and the landlord) can ascertain the feasibility of the contemplated transaction.

Dec 29, 2010
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Alan S.
Owner/Investor
Huntersville, NC

Thanks all for the answers Happy New Year.

Dec 30, 2010
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