Why, if you are offering a 4% commission, don't realtors seem to be interested in for sale by owner listings?

Im selling a seasonal waterfront restaurant that is packed all summer long. It has great financials...It should be an easy sell.
In Selling Property - Asked by Daniel W. - May 13, 2011
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Answer(s)

Aurelio M.
Broker/Agent
Torrance, CA

The typical commission for a business opportunity is 5% to selling broker. Unless you are selling the restaurant and the real estate together 4% may actually be lower than the norm. The reason most properties and or businesses don't sell is price. There will always be a buyer at the right price. As you may already know the restaurant business is a tough business and your buyer pool may be very small. I know that doing a for sale by owner may save you some money, but you may want to weigh things out. A good listing broker will do more than just put it on a few MLS systems, they will tap into a vaste network of business buyers and their agents representing them. If you are stuck on doing this yourself, I would pick up the phone and start calling other restaurants in the area to see if you can get some bites. Thank you and get the place sold soon.

May 19, 2011
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Rob M.
Lender/Mortgage Broker
Houston, TX

My experiences with FSBO have always been less than smooth. Most owners do not deal in CRE for a living and this can be a problem with understanding laws and the general workings of a CRE deal. This issues can sometimes lead to not only wasted time, but also monetary expenditures for a potential buyer. The same problems ring true with residential agents working a CRE deal, not enough knowledge or experience. For those resi-mercial agents, please work with an expericenced mentor to gain skill and knowledge before stepping into the realm or better yet, refer the deal out to an experienced Commercial Real Estate agent and get the referal fee.

May 23, 2011
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Tai N.
Broker/Agent
City Of Industry, CA

Daniel W., both Aurelio and Rob make great points. A good broker will let you know off the bat if your pricing is inline with market, they will also get your business/property sold. As a side note: if it is only the business you are selling, then you should consider engaging a business broker as oppose to a commercial real estate broker. At the end of the day, if the brokers business is to sell, if the broker does not deliver the results you want, then you lose nothing.

May 26, 2011
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Rick L.
Doral, FL

Its not about the rate its about by pass issues. While a broker can be trying to make the 100 meter dash to due diligence for that 4%, the owner has no contractual obligation to broker.The owner and buyer can deal directly after being presented and leave the broker out of the deal.

May 31, 2011
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Jeremy C.
Broker/Agent
Andover, MA

Brokers must control one side of the deal, either the buyer or the seller to invest in the opportunity to make a deal. Most investors want to represent themselves, so they rely on brokers to send them listings, where they represent the sellers. If you are not represented, you're better off marketing your opportunity to investors directly, because brokers who aren't protected, typically don't want to take the risk, particularly in Massachusetts commercial real estate.

Jul 10, 2011
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Dorene S.
Broker/Agent
Torrance, CA

It's a low commission rate for Commercial Brokerages would be my best guess. Because of the liability factor and the great deal of work that goes into successfully selling Commercial Property, most Commercial Brokers would shy away from something like this. My advice is to sign a contract with a brokerage and negotiate the going rate.

Aug 19, 2011
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