As said by other respected members there are no standard commission rates. The rates for leases exceeding one year might be broken down into different commission rates. To give an example; the realtor might suggest commission rates as 3%, 2%-2nd year, 1.5% for subsequent years. This means that you will pay commission at a rate of 3% on annual net rent (TMI excluded), 2% on next year's net rent, and 1.5% for the remaining 8 years.
If annual rent is, say 10,000 dollars, then the total commission payable is 3% of 10,0000+ 2% of 10,000 and (1.5% of 10,000 X8). The total commission in this hypothetical case equals $300+200+(150x8)=$1,700. Please let me know if I am wrong here. Thanks
Apr 26, 2012