I need advice. Lets say I was an agent (less than a year) and I work for a builder, developer and he has a real estate company. I work for that company. He is developing and building appox 30,000sf building and I am going to sell it (office condos). I am working/training under an experienced commercial agent(very helpful). Anyway we did not put anything in writing before I started. Question is I am being told there is 4% commission and I will get 1% and the other agent will get 1.5%. The builder/developer will keep the rest for office expenses, advertising, and insurance. Does this sound right? Should we split the 4% and the builder get his cut off of that say 80/20?
I am very new and want to make money in this and I do not see where making 1 or 1.5% commission with one building a year will bring in the bank.

Commission percentage listed is for educational discussion purposes only

Well looking at your numbers.......It's crap!

No way I would work for those kinds of fees.Land listings I get 10 percent commission.Land assemblage I name my price.If you sold 3 million at 1 percent that's only 30k.How much time are you going to have to put into selling this property and how much time will you have to pursue other deals??

I hope the office space is in a good location because office vacanies and inventory are on the rise.

GET EVERYTHING IN WRITING!

I don't believe what people tell me.If they won't put it in writing where they are legally accountable I won't do business with them.Make sure this developer is on the up and up-you think residential buyers and sellers are bad.There are developers who LOVE to try to screw brokers out of there fees.

You are new so maybe this is a good chance to cut your teeth.I would ask for a higher percentage in commission and get it in writing.If the developer balks say well if I can't sell myself how am I going to convince buyers to purchase your property?

good luck

is the developer the broker of record (it sounds like he is)? is the total commission 8% and 4% goes to a selling broker that would be representing the buyer? If total commission is 8% that's definitely not great but not the worst I have seen. If total commission is only 4% then you will have to be in a killer location as Super said.
Do you have any previous experience prior to this in real estate sales, construction, or development or are you completely new? How is the partnership between you and the experienced agent mapped out? Are you doing all the grunt work and doing all the showings, etc. or is it evenly split? How much do you stand to learn in this proposal? How much volume could you expect to do with this person?
All those are important questions but a net of 1% to you is pretty well pitiful and not going to be enough to keep your attention for very long due to lack of income. Give more info and we can help better but it absolutely does not sound near enough.
And yes...get it in writing.

He is not the broker of record but he owns the real estate company. The TOTAL commission is 4%. Here is the plan. The building is breaking ground next month and we are going around (both agents) and talking to Dr., lawyers, and other professionals. We are both doing the same amount of work as far as talking to the people. Only thing I am doing above is getting the list for us to go see each day since I live in the city and know the lay of the land. We are selling them and this is the first time this is happening in this city in GA. My only previous experience was in residential and I was with the best(highest volume and best name) company in town. I am learning from this other agent about what questions to ask how to get to the decision maker and such. The plan is to do 1.5 buildings a year for now. We have 2 in the mix right now at about the same point of development(about to close on the land and break ground).

Super the land is already taken care of I was not a part of the company then. They expect me to work on this 50 hours a week and not do anything else.

From talking to my broker and you guys I feel like I am getting screwed.

Oh and if another agent brings a client then we pay them 3% and we get to split 1%. But we are beating on doors rather than waiting on other agents.

They said something about wholesale brokerage. Does that sound legit?

3 percent co-op is crap for commercial,in our area I see some at 3.00 but alot at 5.00.So you guys would be splitting 1 percent on the selling side?OUUCCHHH!!!!

You need to perform a PRO-FORMA on this deal.If you don't know a pro-forma is an analysis based on future returns.So you need to figure out average selling price in a best and worst case scenario and see how much income that brings you and get everything in writing.

This to me is one of the worst deals I have ever seen.Sure you get volume but 50 hours a week??????

How big are the office condos going to be and what is the asking price?

If you sold 1 million per month at 1 percent that would be 10,000 a month and working at 200 hours would equal 50 bucks an hour,if you only got 1/2 of a percent as you state if a buyers agent was there then that is only 25 bucks an hour not including your gas,food,meeting expenses with the potential clients.

I just think this is not a good deal for you but it's your choice.

hm. you must be in south GA or something off the beaten path if this is the 1st office condo deal in your area??? The commission schedule sounds terrible and only positive thing i can possibly think of is that if you are in a very rural small town area maybe that is all that is going on in your neck of the woods and your options may be limited? That being said, no way would I, nor would I advise one of my agents, to put in the time and effort for the commssion plan you are talking about. Plus, it sounds like you are the local guy who knows everyone and THAT is worth some $$. Don't sell yourself short. Part of me thinks you should, in a friendly manner, talk to them about this issue and the lack of feasibility. But then the other hand this developer ought to know that already!

I am not in south GA. I am in North West GA about an hour out of Atlanta. Not a real small town but for the most part the developers in the past have built buildings and leased them out. Office condo is a new thing in this area. This builder is from Atlanta and has just completed an office condo there that went well. I was not involved then. This builder makes his own rules and changes them as he sees fit I am finding out. He thinks he should pay people what HE thinks they are worth not what the going rate is. I am sorta stuck as I left the best residential agent in town to go with this guy.

The builder and the other experienced agent have both said that if you were with x broker you would not have the option to make this amount of money this year, I have said that is irrelevant. I changed positions because I saw the potential. We did not talk about 1% commission before I started.

This is class A space and will be very nice. We had a conversation Friday and I said that the going rate should be 7-8% and I should see about 3 or 4% if we do not co-op with an outside agent. Is that unreasonable or am I in park? Anyway I am going to talk to the other agent tomorrow and ask why he is ok with 1.5% because that is not the norm. If I am wrong or off base on anything please let me know.

ok last question I hope on this topic. Since I am a new agent, less than a year should I receive what the broker thinks I am worth or should I get what is a fair market value for commercial real estate agents?