Facts About Negotiating Commissions in Commercial Real Estate Brokerage

commercial real estate buildings on edge of river

Many of the property owners and business leaders that we serve and class as ‘clients’ or ‘prospects’ in commercial real estate brokerage, like to negotiate fees and commissions downward.  To them, it can be part of a ‘game’ to seek further value in their property challenge.  Don’t be too eager to respond to the ‘reduction’ request.  Your income is critical to your business stability and professional career.

The most challenging of properties and listings require the commitment of a ‘top agent’; that’s where you should be positioning yourself and your brokerage.  Make sure the client understands that ‘not all agents are equal’.  Show them why you are the best agent for their property and do so from a ‘special and relevant’ perspective.

(NB – Need brokerage help and commission ideas?  You can get our Snapshot Broker Course right here)

Decline the Request

It is sometimes better to decline a commission reduction request from the very start; don’t engage with the client about ‘reductions’, but stick  to your fee scales and or withdraw your services if the client request is onerous.  It can be productive to walk away from a client and the property if the request for a lower commission and fee reduction is overly unrealistic.  Your time is precious as are the services that you can offer in commercial property sales and leasing.

Protect Your Time and Resources

You are (or should be) the expert negotiator on local commercial property, and part of that professional position involves fees for service, listing stability, comprehensive marketing, transaction knowledge, local area awareness, and market coverage.

Your services and the market coverage offered should be so special and ‘deep’, that the client can’t ignore you specifically and as part of resolving their property challenge.   If you have positioned your ideas correctly in the listing pitch, then you should be the single and best brokerage solution that they need.  Strive to achieve that level of property market coverage, service, and penetration.

Industry Expert Status

So, if you truly are that commercial property industry expert for the location or the property type, then the client will likely need you more than you need them.  They will want you to resolve the their property problem in a timely, efficient, and valuable way.   Your skills are therefore unique, and that fact should not be forgotten.  Exclusivity and vendor paid marketing funds should also feature in your listing conversions and processes.

Top agents bring great skills and knowledge to a property transaction in any area, across a property type, or in a local precinct. 

For Sale By Owner Indicators

Typically, the common ‘FSBO’ marketing strategies that we see in commercial real estate are rarely successful or timely.  The listings are usually overpriced and or the client is not market ‘savvy’.  The time on market for an average ‘FSBO’ listing is quite long by comparison to other property listings, and the conversions to a completed transaction will always be low.

So let’s take this further; here in this special report John Highman talks about some key ideas to look for and remember when it comes to negotiating commercial property listing commissions, asking for property marketing fees, and applying your professional property services for clients.  Your time and your skills are ‘valuable’; remember that fact and pitch your services accordingly.

You can get the PDF report on Commercial Property Commissions and Fees here:

City Building

Report about Commercial Real Estate Fees and Commission Negotiations

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