Broker representing a tenant asking me for 6%
I have a commercial rental unit that I showed to, and have been in discussion with, a regional sales rep of a large corp who is needing some warehouse space. I am a small minnow in the ocean of commercial property and generally rent to local small business owners. He finally got approval to lease the unit from his supervisor. Today I got a call from a broker who was representing the corp. This caught me off guard because it hadn't been mentioned to me previously that a broker would be involved BUT I have been reading bigger pockets and studying the processes, terms and lingo so I recovered myself quickly and began answering his questions about rent, length of lease, terms etc. The negotiations for the lease had pretty much already been agreed to by myself and the company sales rep so there wasn't much to discuss. At the end of the call he brings up his 6% commission on the lease and tells me that I will need to pay that. RED FLAGS start going off and I said that I hadn't hired him and I didn't feel I should pay him. He mentioned that I could pay it upfront and then add it to the rents over the term of the lease so that the tenant would pay it back but I am not really comfortable with that because I gave someone my word on a monthly rent price and that would contradict what I promised.
Long story short this didn't feel honorable to me - him coming in at the end of a deal and asking me to pay his commission after all the work was already done. I told him I would get back with him after talking to my partner, which I did. I simply told him that we were not willing to pay his commission and that the corp he was representing would have to pay for his services. I really want them as a tenant but and I hope it doesn't throw a wrench in the deal.
Any thoughts? Is this common or were my instincts correct???
Thanks
Brad