How does the commercial real estate (“CRE”) industry work?
Most owners of real estate hire real estate agents to lease their property on their behalf. The agent obtains a listing agreement, which calls for that agent to act on the owner’s behalf as a fiduciary in leasing the property. The agreements are performance based, meaning the agent earns a commission upon the signing of a lease. The commission is typically paid one-half upon lease execution and one-half upon tenant occupancy. Owners of real estate can lease their own properties without having to have a real estate license. Real estate agents are required by law to have a salesperson’s license issued by the state that the agent does business in. All agents must pass an exam in order to obtain a license. The agent then “hangs” their license at an office with a designated Broker. The Broker has additional licensing and educational requirements that they must meet in order to have agents that work for them. The Broker is ultimately responsible for any acts committed by an agent whose licen
