9 Replies

How do you determine finders fees and/or commission on commercial deals??

Depends on the broker, market, etc? Did the broker put the deal together or have a hand in the deal?  In the long run a commission is a small cost if the broker will stand up for you and bring you more deals!

Being an agent (I'm assuming from your header) you would negotiate either a % or a flat fee. It also depends on the amount of work you are doing. Are you helping your buyer get property rehabbed/rented? Or are you "bird dogging"? 

I am simply facilitating the deal outside of the market I am licensed in. So I found an investor willing to purchase the property for the buyer. Can I charge whatever I want? What is the standard commission on commercial deals?

Maria - you cannot practice RE sales without a license. If you are not licensed in a state, you will have to be a principle in the transaction. As a licensee you should know this :)

That has to be untrue Ben, what do you call a wholesaler? And rules for residential and commercial RE differ.

@Maria Fortner Real estate licensing laws do Not change for commercial vs residential.  @Ben Leybovich is right on both counts.  Wholesalers who assign their purchase contract for a fee may, or may not, be violating their particular state licensing laws.  Wholesalers who double close a property, are not.  Ignorant wholesalers/bird doggers may think they can legally collect a "finder's fee, consulting fee, etc." as long long as it's not called a "commission", for simply "facilitating" a sale between a buyer and a seller, without being a principle to the transaction.  A licensed agent should know better.

The rules for both residential and commercial, as they relate to licensing, are the same. And what I call a professional wholesaler is a contractual principle in the transaction.

I see you have much to learn, @Maria Fortner . Fortunately for you, this is the right place to learn :)

@Wayne Brooks - "ignorant wholesalers/bird dogers" - we should make that standard terminology :)

@Maria Fortner - what Wayne is saying is that there are 2 possible ways to put yourself in the middle of a transaction without a license:

a. To assign a valid contract

b. To double close (simultaneous close), in which case you actually become owner of record for a few minutes - you execute the contract, in lieu of just assigning it.

Assignment of contract is taking some heat now days, because realtors don't like competition. If they don't get you on licensing, they will get you on securities fraud, since a contract is a security. It should be legal to just assign it, but many states are not on board

Do your research, and don't get caught with your nickers down...

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