How are Agents compensated in a transaction?
Agents are compensated by earning a commission upon the signing of a lease. Commissions are paid by the owner of the building to the listing agent’s Broker, typically in two installments, one-half upon lease execution and one-half upon tenant occupancy. The listing Broker then pays the agent responsible for the lease. Commission are calculated normally as a percentage of the lease value and usually ranges between four and six percent. Agents typically split commissions with their “house.” Depending on the agent’s independent contractor’s agreement, commission splits vary from 50/50 to 90/10 with the agent responsible for paying their own taxes. In some cases, a tenant may retain an agent to find a space on their behalf. In this case, the listing agent’s agreement provides for the agent to split the earned commission, normally 50/50 with the tenant’s representative. There are exceptions to this rule dependent upon the market environment. If the vacancy rates are high and tenants are at
