New here and have a real simple question maybe somebody can clear up.
What is a typical total commission paid to the buying/selling broker for a 15 unit apartment buidling in good shape and mostly occupied? It’s in Arkansas.
thanks
Mark
Most common that I’ve seen for commercial is 10% but that can vary widely.
Keith
Ok. That’s what I was told was 10%. I was thinking about 5%. wow. Just caught me off guard. thanks. what area you in?
I’m in Maryland but have been in Virginia, Louisiana, Colorado, and Wyoming.
Commercial RE is generally tougher to move and deal with so the rate is higher.
Keith
Sounds like louisiana is closest to my 15 unit complex in Arkansas. Probably be a sales price of around $650-$700k. I just found out a bank has one listed at 4.8% not too far. Hopefully I can get it done for no more than 6%. The trade off is getting the property shown I guess with the lower comission. What do you think, shooting myself in the foot by trying to skimp on comission?
Froggy,
All real estate commissions are negotiable. The larger the deal the lower the percentage of the commission. On deals below $500,000 10% is not uncommon but again it’s all negotiable. Tiered commissions are another route ie. first $500,000 10%, next $500,000 to 1,000,000 6%, next 1,000,000 to 2,000,000 3%, next 2,000,000 and up 1.5%.
So for example the commission on your project at $750,000 on a tiered system: (500,000 x 10%) + (250,000 x 6%) = $65, 000 or
(.66667 x 10%) + (.3333 x 6%) = 8.67%
You can also back into it by setting a limit to what you want to pay and go from there.
Good Luck