Whether it’s your first time working with a commercial broker or your hundredth, the one thing that must always be considered is the cost of hiring the best broker around. Committing to using a quality broker ensures that you will get the best value for your money. The best commercial broker will give you the benefits of their expertise and contacts throughout your working relationship.
Commercial Broker Considerations
Ultimately, the actual cost of hiring a qualified commercial broker in NYC will depend on the actual details of your lease or purchase agreement. You will need to discuss commission rates in advance and determine whether or not you will be responsible for a retainer before a contract is signed. Make sure you ask your broker what marketing and research services they provide that make their fees comparable to other brokers in your area.
The vast majority of real estate brokers in the commercial industry works on a commission. The structure of those commissions is slightly different for commercial brokers than residential brokers. This is because commercial brokers handle both sales and leases. The percentage rate of the commission generally decreases as the length and price of the lease increases. Thus, small, short-term leases may have a commission of 5-8 percent, while large, long term leases of 5 years or more can have commissions around 3 percent. You will need to discuss the exact terms of your deal with your commercial broker to determine what their commission will be. Typically, the commission is paid by the landlord, not the tenant.
Depending on which broker you choose to work with, there are a number of other fees that can be added to the commission. A retainer may be paid to keep the broker working for you in the time before you sign a lease, which will then be deducted from the commission to be paid once the lease is in action. Hourly wages may also be paid for brokers who are conducting research or marketing activities outside of their typical responsibilities. Travel fees, success fees and other costs may also be a part of your broker’s deal.
Another important facet of your commercial broker costs will be whether or not your contract with them is exclusive. Ideally, you should ask for a non-exclusive contract which allows you to do some searching on your own, and opens up the possibility of working with brokers from different areas for the best results. Thus, the broker will get a fee only for the work they have done, rather than any deal that you manage to make on your own. However, it is usually best to work out an arrangement where you can search for properties on your own, but the broker will help you handle negotiations, because their expertise is really what’s valuable in the final stages, whether they were the ones to locate the property or not.
Foremost Commercial Broker Team in NYC
The team at Handler Real Estate Organization aims to be the best NYC has to offer. Our commercial brokers are here to help you find the property of your dreams or match you with tenants in a timely manner. To schedule a consultation with the Handler Team, call 212.398-1888 or click the icon below today.