Commercial Real Estate Broker and Ongoing Fees

[Nitanth Vangala]

Hey everyone,

I currently use a commercial real estate broker to help me find banks to finance my deals. Typically I give him 1% and he has found me one particular banker that has done my last 2 deals. This banker has reached out to me directly for various questions and now we communicate directly. This is my brokers primary lender. Just out of curiosity, on future deals, have people continued to use the broker for deals or do they ever communicate with the banker directly if they have done multiple deals with the same lender?

I want to preface this question by saying that I truly believe that everyone who helps us find and manage deals should always be adequately compensated and if the industry standard is to continue to pay the same 1% when the same banker is used then I will happily pay that. Just not sure if this is the norm or a unique situation. Thanks in advance!

[Cason Acor]

I’ve been the broker in this scenario with regards to referrals. My solution might be different than others, but I’ll cap a referral deadline at twelve months. Meaning any deals that get done with two people I bring together within the first twelve months, I’ll take a referral fee. Beyond that, people have obviously cultivated the relationship further on their own. As much as I would love to get referral fees in perpetuity, I don’t think it’s fair.