is it normal that the listing broker does not pay buyer agent commission for commercial properties?

I have a client who want to purchase a property listed at loopNet. I called the listing broker and was told that they do not share the commision with buyer agent. The buyer need to pay for my commission. Is it normal for commercial properties without paying commission to buyer agent?
Thanks! Tom
In Buying Property - Asked by tom x. - Mar 5, 2012
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Answer(s)

Mark K.
Broker/Agent
Clearwater, FL

I think that the program of not sharing commissions with other brokers is abhorent. It does happen with some brokers.

Mar 6, 2012
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Russell P.
Broker/Agent
Overland Park, KS

The most typical scenario is that the listing agreement includes the seller paying both the seller and buyer agent's fee. However, every situation is different and fees are negotiable at any point. I'd suggest in this situation that you make sure your client protects you in writing and only then ask for your fee to be paid by the seller in the offer.

Mar 6, 2012
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Cindy E.
Broker/Agent
Chicago, IL

Often true. Add your commission to the LOI or sales contract with the permission of the buyer. See if listed on MLS - commission there would require sales broker to comply with that published rate.

Mar 6, 2012
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Rob M.
Lender/Mortgage Broker
Houston, TX

Good point Cindy, I have done that before with good results. Sometimes the seller is not aware their agent is not offering to share the commission. The seller in my situation had no idea until they saw the LOI.

Mar 6, 2012
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Glen F.
Broker/Agent
Tucson, AZ

The Listing Broker should disclose up front, what fee he/she is willing to share with the Selling Broker. Then the Selling Broker knows how to proceed. What gauls me is when the Listing Broker receives, let's say 5% from the Seller and offers 2% to the Selling Broker; then the Selling Broker calls the Seller and says that the Listing Broker is dishonest and violates some law because he didn't offer half to the Selling Broker. In this case, the Selling Broker didn't do 'squat' other than visit the property once and write a one page LOI.

Mar 6, 2012
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Richard N.
Broker/Agent
Alexandria, VA

It's not unheard of that the broker will not share the commission or seller will not pay the buyer's side of the commission. When you look at it the buyer is paying the commission always because the marketing price takes into consideration the costs of selling and what the seller wants to net. A rose by any other name is still a rose. However it is foolish of the seller/selling broker not to commit to a commission in these economic times. One (name withheld) large national brokerage firm seldom or never pays the buying agent's commission and I suspect prompts their agents to be abrupt if asked this question. I could say more but GREED sums it up.

Mar 7, 2012
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Victoria W.
Lender/Mortgage Broker
Laguna Beach, CA

Commercial sales is vastly different compared with MLS listings and shared commissions offered for residential sales. Agents unwilling to share a commission for commercial sales run the risk of loosing a sale by their own "greed", but unfortunately, this is not an uncommon practice. Best advise is to speak directly with the agent and work out a deal to facilitate the sale. In today's economy, a sale is golden! If you need commercial financing consider calling me. I am a broker and I specialize in commercial lending. I absolutely do not sell property. I can finance any size commercial project. Good luck with your sale.

Mar 7, 2012
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Tai N.
Broker/Agent
City Of Industry, CA

Every deal is different. It is not normal for the listing broker not to pay a Buyer's broker a procuring fee if the deal size is below $10M. However once you start participating in larger institutional type transactions then it does become more commonplace for the Buyer to pay the Buyer's broker their fee. These are general parameters. So when in doubt, write in the offer "Seller to pay for Buyer's broker's fee at the close of escrow". Best of luck.

Mar 15, 2012
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Brent G.
Broker/Agent
Columbus, OH

An agen't "greed" is not always the reason there is no commission co-op. Often it is an unwritten corporate policy of the brokerage. BUT, as the CRE market has struggled the past few years the handful of commercial real estate brokerages that would not share commission on their listings have generally softened on cooperating with agents/brokers who bring investors to the table. Bottom line -- they NEED to move the property for their sellers and commission co-ops help that happen.
But the refusal to co-op creates many problems from both listing agents and agents representing investors on the buy-side. First, as a listing agent, you have an obligation to market the property in a manner that brings in the most possible qualified buyers. But if you refuse to cooperate on commission you shut out quite a few transaction opportunities, thereby doing your seller a disservice. As a buyers agent, you have an obligation to bring every possible property that fits your investor's requirements to their attention, without regard to your personal gain. But if buyers' agents do not bring such "no co-op" properties to their buyers' attention, aren't they also doing their clients a disservice?
The unwillingness to cooperate on commission actually creates ethical issues for both buyers' and sellers' agents and brokerages. The smart business approach is bo co-op on commissions. It will always move more property and result in more closed transactions. That fact cannot be disputed.
My two cents....

Mar 17, 2012
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Alex J.
Broker/Agent
Plano, TX

It is normal that in commercial real estate that commissions to outside brokers are negotiable. A lot of factors go into whether or not a commission is available and how much it might be to an outside broker. It is a decision between you and your buyer on how it will be handle. It is wise to make this decision prior to any level of due diligence.

Mar 21, 2012
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Kevin K.
Broker/Agent
Phoenix, AZ

there is no law requiring sharing of commissions, that is an agreement between listing and buyer's agent.
IN residential, most brokers share said commission but they are not obligated to--I used to be the only
buyer's broker in AZ!!!

Nov 7, 2016
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