how much do you give a leasing agent??

In Leasing Property - Asked by Sam N. - Oct 31, 2008
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Answer(s)

Vonda V.
Owner/Investor
Englewood, NJ

I'm curious to know as well. I know on the sale side it's a percentage of the sale. But how does it work with a leasing agent? Are there up front costs?

Oct 31, 2008
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J. Duane F.
Broker/Agent
Princeton, TX

In my part of the country the lease commission is 6%. If the commission is paid as the rent is collected, then the agent gets 6% of the rent as it is paid over the term of the lease. However, if the agent wants and the Lessor is willing (usually, creditworthiness of the tenant is the issue) to recieve his commission in a lump sum, the total amount of the rent over the term of the lease is calculated and the agent receives 4% "cash out". One half of the amount earned is paid upon execution of the lease by the tenant and lessor and the other one-half is paid upon the tenant taking occupancy.

Oct 31, 2008
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Andy F.
Broker/Agent
Dallas, TX

Hi Sam. The Landlord will often base the amount of the commission on whether the lease is done directly by the leasing agent (who has the listing and reps the owner) or is co-brokered, where the leasing agent does the lease with an outside broker (who reps the tenant). In my area, on an office lease, the leasing agent might get 4.5% of the total rent volume on a direct lease or 2 to 2.5% if it is co-brokered (outside agent getting 4.5%). So a co-brokered deal would be 6.5% total (4.5% to the tenant's broker and 2 or 2.5% to the landlord's broker). As Duane said, it is usually paid 50% on lease signing and 50% upon occupancy (and payment of rent). If it is a renewal (rather than new lease) it is paid on signing.

Oct 31, 2008
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Juan G.
Broker/Agent
Ontario, CA

That depends on if you want to have a good tenant or spiders spinning webs on your building. Normal rates are 6%(we are getting 8% at difficult listings in saturated markets), Half at lease execution and half at Opening for business. I am a Landlord Rep so I will be very blunt with you. Tenant's brokers will not out up with landlords crap when they offer low commissions. For example if someone is representing a fast food franchise and you are paying a total of 4% commission paid over the lease of the term, the tenant broker will take his client down the street to one of the thousands of available spaces and you will sit there with your empty building, blaming others for "the bad Market".
In this market, good landlord representatives will ask for a retainer as we can spend hundreds marketing your property upfront. Offer the actual agents, especially the junior agents who are actually doing the legwork a bonus.

Oct 31, 2008
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Jordan S.
Broker/Agent
New York, NY

Sam N,
Most brokers will address their "fee" in a written offer or at the establishment of a listing contract. There is no set percentage a owner or tenant must pay nor a way of calculating it. Anyone that says 4% or 10% has neither done more than a hand full of deals or simply has never completed one. It simply depends on your market. The best thing to do is call a few reputable brokers and get their rate schedule. You can negotiate when it's paid. But with anything be realistic. These folks don't work for free.

Oct 31, 2008
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Chris S.
Broker/Agent
Coeur D'alene, ID

$1,000,000.
No seriously, leasing commissions are not set and there is no particular standard commissions structure. In fact it could be illegal and violation of federal anti-trust regulations to discuss a particular rate.
What I can tell you is that commissions are often based on a percentage of the total lease dollars (total rent paid over the term of the lease), but sometimes you can negotiate a flat fee. One big determinant is how much work the broker is putting into the lease. Are they simply referring a tenant or are they marketing the property, negotiating and writting the lease?

Jan 16, 2009
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michele p.
Lincoln Park, IL

In Chicago, IL it is significantly more. As a leasing agent, the Broker receives 100% of the first months rent. Depending on the Broker, your commission could be up to 50%.

Jun 22, 2009
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