What do you guys expect to pay in commissions for a multi million dollar commercial real estate deal in DFW? When we bought the building, the commission was 6% on the first million and 3% after that. When we placed it for sale, we worked a deal with our broker for the same although he was reluctant. Now we have an LOI from a company using a different broker. The buyer's broker is wanting a full six percent commission (to be split between brokers) and our broker says we need to pay that or he'll take his client elsewhere. He says the market is typically a full six percent. Is this typical for the market on such high priced real estate? There's not much work or expense for the buyer's broker on this type of deal and the brokerage would still net over $50K. I'm a realtor (Mostly residential and land) from out of the area and I handled the purchase, so I know what all is involved. One thought is that our counter will require the buyer's to pay the additional commission, but I don't want it coming off the top from our pot as this deal will be very tight for us as is.

Thanks

May want to post this on the Real Estate board too.

Thanks, I forgot we had a real estate board.

I'm in Houston, we normally see $3MM as when commissions start adjusting...normally a sliding scale of 6% of $3MM and then 5% for the portion >$3MM

The structure you paid when you originally purchased the building is market - 6% up to $1M and 3% thereafter, split evenly between the buyer and seller's brokers. I'm not sure who you are working with or who the buyer's broker is, but I would be hard pressed to think that your agent is trying to increase the commissions for the buyer's rep. I assume your agent is still asking for half of the fee I described above?

I recently changed careers, switching out of commercial real estate, but I would be happy to give you a 2nd opinion if you want to shoot me a message.

I'm in Houston and it's 6% until you start approaching $5 million

Thank you guys for the info!

Agree with the above.

I've always had the understanding that it is 100% negotiable. Its whatever you and the agent can agree upon. I think the standard among RE agents is to always defend the 6% common practice because its in their best interest even though some properties may require minimal work or effort. Some commercial deals require alot of legwork and outside consultants which I would expect to pay the full rate but most where they just simply list and are not involved with market research and other studies can be negotiated down.

Edit to clarify my perspective. I have been involved in deals on the selling side and seen the listing agents negotiated to less than 3% or to a fixed fee but the buying agent fee was kept at 3% in my experience. I believe more work and harder work is involved on the buying side.

Thanks, we countered with a higher price to make up for the commissions, which the buyers didn't like. They eventually agreed to our offer that they pay the extra commission required by their broker. I think their broker ended up backing off, because the contract came in with the terms we desired. Everybody is going to come out good on the deal.