Curious about commissions in your area. What should a seller pay for Listing commission on 5-10 million dollar project? What should a Buyer pay for the selling commission on same priced project. Thanks.
If there are NO Dallas investors or agents, how about Houston, Austin or ANYWHERE in TX.
As the owner of brokerage, with agents in Austin (that's where I am), San Antonio, Houston and Dallas, I'm going to answer that with a firm "depends".
First, I'm assuming you are talking residential (1-4 family)...
All listings commissions in Texas are negotiable (not set by statue or board rules like in some states). 6% is standard.
But for 6%, on a multi-million dollar home, I would expect some marketing $$$ spent by the agent.... luxury magazines, staging, etc. After the split with the buyer's agent, that's potentially a $150-$300k commission.
If, however, YOU are doing any marketing and you are expecting someone to just get it in the MLS, 4% would be reasonable... Still 3% is going to that buyer's agent.
If this is residential and you need someone to list, give me a call @ 512-731-4541, I can track down a luxury home specialist in Dallas for you.
I'm thinking Rich is looking for commercial, specifically multifamily.
Than you Daniel. Jon was correct. This would be an apartment complex (S).
Hey @Rich Weese . Long time. It depends on the brokerage house, the relationship, whether they offer a co-op, etc. The brokers I just met with charge about 3.5-4%. Others have been known to charge 2% below $6M and less than 2% over $6M.
We should talk if you're thinking about selling, preferably before you list it :-)
Rich, sinse I'm in DFW, I'll suggest this:
Negotiate it! I'm pretty sure it's like anywhere else.
Suggest you think of a sliding scale too, since you ask as if there was only one "project", but if it's an exclusive on an 100 60,000 units, you could reverse the commissions, 2% first 20, 2.25% next 20, 2.75 on the next 20, 3.25 next and 4% on the last 20, this gives an incentive to keep selling as the deal thinner toward the end, but usually easier to sell.
Also consider the other direction, if it's like 5 deals, first on is the most difficult.
A combination too, as you already know in a development, selling the first lot or home is the hardest pay a higher commission to kick it off then go to a standardized fixed or flat rate.
In most larger deals I've been associated with, we didn't list with any agent, find a commercial brokerage, you can hire an RE type cheaper on a salary!!! Pay the broker to run it through on a service basis and negotiate each aspect. Think about it, I doubt anyone pays 3% on 6M......why would they?
Good point, Bill. Think about how much exposure you could buy with a fraction of the commission.
Thanks to everyone. I want to make sure I understand what Carlos had to say. My example is an apartment building that would be valued at approximately $8-$10 million. I would not be the seller of this property but may very well be the buyer. If I understand what you are saying, this $8-$10 million apartment building most likely has a commission of 2%. Would this be split by two different brokers, the seller's broker and the buyer's broker? Or would this be the likely commission if the same real estate office was handling the listing and the sale?
My interest is in finding out what I as the buyer am paying for commission that is built into the selling price. It is considerably different at 2% then it would be at a 6% real estate commission on $8-$10 million.
Again, thanks for the help.
A Managing Director once explained it this way when I asked about commissions and co-ops at his office. He said he generally does not co-op with the buyer's broker. He did say he or whomever gets the listing, shares the commission with the team (the team within his office). Long story short, there wasn't enough to go around after overhead, expenses and sharing with the team.
I found this model consistent with slight variances. When they do co-op, it's small - generally half to one point.
So, back to the exact amount. Too many variables to go into here. I'd assume the listing broker's office is making 2%. Just know it might be less since we're talking about a $8M+ property.
Thanks again Carlos. I just wanted to make sure that there wasn't a half million dollars built into the price that I was having to pay for the property.
Rich, I asked a local commercial broker and he said "1 to 2 percent most likely. Kind of depends."
Apartments are so hot now, maybe overpriced. I wonder if it would make sense to look at another category, at least until the cycle turns.
I work in the commercial lending side of the business as well as being a licensed agent. I am located in the Dallas market. Typically on a deal that size, I am seeing commissions in the 1-2% range with 1.5% typical to the co-operating broker. The biggest concern I have with multi-family is that the sellers typically overstate income, understate expenses to try to reach their sales price. I like multi-tenant retail as it is harder to fudge the numbers. Make sure your agent understands the numbers as otherwise it can be costly.
Thank you Mark. Most of the property listings I'm finding do not share their listing and maker the Buyer pay his agent.
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