How are commissions structured for commercial real estate leasing deals?
There are some companies that will be giving you a fixed commission for all the sales that you are going to make. All commissions are based on percentage sales. The more valuable property you sell, the more money you make. That’s a reason why we often see real estate agents who are not showing short sale properties. Since the property will be sold for less, the money that they will make will be less than selling ordinary properties.
I think commission structure of real estate agents would be reliable upon both of party buyers and sellers, They determined somehow percentage from both side if the deal been done and once it would be done both parties has to pay commission to their Real Estate agents.
A. According to NYspace, a commercial tenant-rep firm in the city, in the 1930’s, when Manhattan vacancy rates were very high, owners and landlords found that it was in their best interest to let every broker market their space. They began to use an “override commission” system, where the owners paid both the listing and tenant’s brokers. Although this was a little more costly than a “co-brokerage” arrangement, where all brokers split one commission, the owners found that their space rented faster and they made more money in the long run. All brokers had access to all listings. This system is still in use today, regardless of market conditions. As far as income, overall, commercial brokers earn a lot on fewer transactions than residential agents. Alan Schwartz, president of Glen Equities, says that commissions for commercial transactions are generally lower percentages than residential sales, but still offer significant earning potential, because the transactions are for larger amounts
