In the most general of terms, commissions on commercial real estate deals tend to run higher than residential real estate deals. Ideally, agents aim for 6% on a residential listing in Connecticut... 10% on a commercial property. The work conducted on a commercial listing can be time consuming. There are fewer buyers looking for commercial properties than residential properties. The listing agent is in frequent discussion with the zoning department, attending zoning meetings, researching the property so as best to market it to the public. The commercial agent can legitimize a higher commission because more time and expertise is involved in the commercial transaction.
Of course, everything is negotiable in real estate and commercial deals sometimes get done when a commission as low as 4% is involved. You have to think of what you must offer to entice a buyer's agent to pursue your property. If you negotiate a small commission from the seller, you have less leverage to lure the buyer's agent. In an idealistic, ethical world agents should be working in the best interests of their clients, but I can certainly say there were times I have worked on deals where agents have played dirty pool and demanded more of the commission I offered. I just learned to remain unwavering in my original offer.
Aug 10, 2015