im currently representing a client to buy a retail property in sacramento. i haven't had a chance to talk to him about commission situation.
i've never done a buying and selling transactions before and was wondering who pays my commssion.
i was told that seller usually pays the commission but sometimes both seller and buyer get into an agreement that they split the commission in half.

So, who pays for my commission?

Another note. Who do you contact for financial aspect in a situation like this? do you call all the commercial lenders and find out who gives the best quote?

any help would be appreciated. thanks

I'm sure others will weigh in, but it sounds like you are way in over your head. If you haven't done a buying and selling transaction before, then you need to seek the advice of your Trainer or your Broker. These are all questions that should be addressed to them.

You say that you are representing a "client" - the word "client" means that you have a contract with this person and presumably in your contract with them they have agreed to pay your fee. If you don't have a contract, or buyer representation agreement with them, then they are a "customer" not a "client" . You represent "clients" not "customers"

Is the property being purchased listed with another agency? If not, then the Seller COULD be paying your fee, but again only if you have an agreement with the Seller, with a stated commission. In that case the seller is your "client".

Of course some state rules are different, this is just how it is here in Vermont. You MUST talk to your broker.

Troy

Hi, troy. thanks for responding.
i had him signed the contract and also the commission schedule. well, the thing is im in a transition of moving to different real estate company now and i was going to ask the broker from previous company to help me out on this deal but im no longer with that company. i can just wait until im placed in the company im currently talking with. i just wanted to find out before hand how the commission should be handled.

when i was going throgh the contract with him, he mention something about seller should pay for my brokerage fee.
I told him that it can negotiable.
I'm talking with colliers international and they are thinking about placing me with veteran agent.

if you represented buyer or sellers or both, how do you structure your commission? do you ususally have seller pay for you cut?

Hold on! If you had a Buyer sign a contract, that contract is with the BROKER, and not with you - you are not allowed to take that contract with you unless the former Broker agrees.

If you are not currently affiliated with a Broker, you should not be doing ANY business!

You really need to speak with your Broker, at the new company or the old company - and stop practicing real estate until your license is with a Broker.

I hate to say it, but you really need some good training, long before you get to the point you are at with a Buyer or Seller.

You can't have a Buyer sign a contract obligating them to pay a commission and at the same time say "it's negotiable" - it IS negotiable, but you had him sign a contract obligating him to pay it sounds like.


I represent both Buyers and Sellers. Whoever I represent is responsible for payment of my fees. I cannot discuss how I structure my fees.

In my state commercial works way different than residential. Usually alot of times standard forms are not used.Either the developer has their own forms drawn up by an attorney or the commercial brokerage has specific forms they use.

Usually commercial buyers will try to get the sellers to pay a commission first.Then if they don't the buyer will. Sometimes though they will try to screw you and neither one won't pay. In Ga the broker can file a lien to stop the sale on commercial only so that they get paid. Usually whatever form is used I have a certain paragraph I insert to show the commission is part of the agreement and that NO OTHER brokers other than in this offer are subject to this agreement.

What will happen is often some developers like to assign rights to another party and then another broker tries to piggyback more commission onto the deal.

If you were standing to make alot of commission with this you should have waited it out before leaving. What does your Independant Contractor agreement state as to taking business with you? Some 100 percent companies will allow a release to another company for buyers and sellers with no problem.

the previous company and i agreed that all the listing will be turned over to them when i leave, but i can take the everything else with me. (buyers and tenants)

plus im currently put everything on hold until i can hang my license with a company.
i am not practicing any real estate at this point but i was just curious about commission situation.
i have a few more clients im dealing with and explained the situation i am in.

good thing you mentioned about proper training. that was the very reason why im leaving the company. every time i want things to be done in a right way, he showed clear sign that he doesn't want to be responsible for it.
i didn't understand why he kept he behavior the way he displayed but he said that im an independent contract.

he has been in a lawsuit for five years and finally got over with. i guess he got a bitter taste of how complicated the legal systmem is in california and he doesn't want to get tight with other things that he is not sure of.

also, he feels that i have a broker's license that i could pretty much figure out on my own.

well, i would like to but i don't have much experience to be on my own. once i graduated from college, i was qualified to take a broker's exam. so i took it, passed, and got a job at the previous company.

i just wanted a proper training so that i can go out there make a honest living.

this guy has small office and try to run everything on his own, from house to every commercial deal that comes in his way, and he doesn't have much time for anything else. plus, he's franchise is associated with houses or insurance, not commercial real estate.

Colliers is a huge company and you will get great training there.It's not just about the commission split there but the contacts you will make when you eventually branch out on your own.

heard cb richard ellis isnt doing too bad either...

For a list of the top 25 commercial brokerages go to www.nreionline.com

CBRE may be the big dog on the block, but they're not exactly in hiring mode: http://articles.latimes.com/2008/nov/28/business/fi-ellis28

Also, CBRE is not exactly receiving good press right now anyway for potential conflicts of interest in being awarded foreclosure contracts by the FDIC: http://hotair.com/archives/2009/04/22/cb...s-to-employees/

Basically, the buyer of any property ultimately pays your commission, though not necessarily directly as the seller may have a prior agreement based on a percentage or fixed number out of the transaction.

But if you look at it from the perspective that until a buyer buys the property, then nobody gets a commission and nobody gets paid.

Some agents will charge consulting fees to their clients on an hourly basis similar to the way lawyers do. This would be an exception.

If you don't have an exclusive representation agreement for a commercial real estate transaction, then your "client" can go around you without recourse. Building a relationship and earning their trust is what will get you a commission. If you clearly explain how you get paid, then most people will not try to do the deal on their own as they prefer professional representation. This is how agents often get burned by not discussing how commissions work up front.

In my area, the exclusive representation agreements are rare, where in other areas, "clients" don't leave the office to see a single property or property list until it is signed.

Hi, stark! thanks for responding to my post.
i do have an exlusive with the client. not only that i had him sign the commission schedule too. However, he wasn't sure about who's paying the brokerage fee. he thought that all sellers pay for all the commission.

Now, i didn't explain to him much about commission situation but told him that it could be netotiable between seller and buyer. I know that he signed all the necessary papers but if my client has mentality where he's not going to pay a dime for this transaction, i think we have a problem.

hey stark, to avoid problems like this how do you approach this transaction? i mean i don't want to get stuck in the last minute because of this issue.