Fair Commission Compensation for New Construction Broker Co-Op

[James Sun]

What's a fair commission compensation on a new construction broker co-op fee?  Assume that the agent is a broker and no other fees are required for the sale to complete.  I'm interested in seeing opinions on actual dollar amount and not %.  Builder will not lower sales price of new construction property and broker co-op is paid out of their marketing budget.  I'm using the agent/broker strictly to lower my net purchase price and there is no expectation of any additional value add out of the transaction.    

[Joel Owens]

I do commercial reale state. Already about at 300,000 in commission for the year. I am worth every penny. I am the broker and my company so keep it all.

Brokers and agents that stand around and are negotiating rebates in a parking lot really are not offering much value for themselves. This is just like discount brokerages. There is always someone willing to do something for cheaper as that is the way they define their value proposition.

I choose to define what I do with experience and knowledge but what I do is highly specialized. 

As to what is fair that is in the eye of the beholder. Someone might think my time is worth 500 an hour for performing an activity and I might think it is 5,000 an hour. So if that is my thought process then I do not work on anything that does not give me my return per hour I am seeking.My commission on the smaller side is around 50,000 per deal. One of my larger ones before was 235,000.

Personally a broker/agent running on low fees will have to do tons of volume to generate any kind of decent returns. They might can do that awhile a few years into the business but it can take it's toll after awhile. It's not really a sustainable model long term.

It seems by mentioning there are many agents in the parking lot offering rebates and to you they do not do as much. If that is the case then simply going around to find who rebates the most if you are going on proceeds back to you?

I get contacted all the time by potential clients. I would say 3 to 4 max out of 10 are a possible fit. The rest do not fit my business model of my ideal client. As I get older (44 years old) now I only want to work with people that I feel good about the relationship and we respect each others time and skills.

Lot's of agents are new and have no money. Those in the business a long time usually have lot's of money. We do not have to work but can pick and choose what we want to work on and when. I earned that right 15 years in the business.

Good Luck. 

No legal advice given.