Listing Commission - Leases
Lease commission varies from type of property to be leased and listing policies implemented by each Real Estate company. Most of the times, this commission is paid by the seller at the time of the closing. However, In some cases and depending on the value of the property and marketing plan, some Real Estate companies require an advance of the projected commission to pay for expenses involved in the marketing and offering of the property. The remaining balance is due at the date of closing.Typically, residential leases have a different commission schedule compare to commercial listings.For residential leases is customary the payment of one-month rent for commission. Sometimes, 10% of the gross annual rent is used to compute the Real Estate commission owed. The last calculation is mostly used when the rent term is different from the typical one-year lease. For example: if your lease if for 8 months at $1000 per month, you would pay $800 for commission. You would multiply the rent for 8 months, in this case: 8x$1000=$8,000 and then calculate 10% of this amount: 0.10x$8,000=$800For commercial leases is customary a commission that varies from 5% to 10% of the gross annual rent and extended for the term of the lease. In few words, the more the lease term, the more commission is paid by the landlord.The lease commission is always negotiable, unless, the internal policies of the company do not allow for negotiating this. This is more typical of large Real Estate companies, since their overhead is enormous and internal policies are very strict.In contrast, smaller companies are willing to negotiate their commission in exchange of lack of name recognition and infrastructure.
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