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Updated over 10 years ago on . Most recent reply

Account Closed
  • Minneapolis, MN
288
Votes |
332
Posts

Buyer's broker commission?

Account Closed
  • Minneapolis, MN
Posted

On smaller multifamily transactions, say less than $5 million, are buyer's brokers ever part of the equation/eventual commission, or is it similar to how the game works on larger deals?

Typically, large multifamily deals listed by the major national brokerage firms agreements forbid a buyer from bringing a buy-side broker to the table and if they do allow they usually say that the buyer is responsible for paying the broker themselves and the seller will not.

Is this typically how it works on the smaller deals as well?  If a broker helped a client locate a $2 million apartment deal, does a selling broker often split commission with a buyer's broker similar to how it's done in single family?

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Joel Owens
  • Real Estate Broker
  • Canton, GA
11,262
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Joel Owens
  • Real Estate Broker
  • Canton, GA
ModeratorReplied

Buyer brokers get paid all the time even on larger deals over 5 million.

There are certain commercial firms in the industry ( I will not name them ). That offer no commission to the buyer brokerage. They are doing a HUGE disservice to their clients on marketing the property and in my view are not performing full fiduciary duties to the client.

Not offering a co-op is only serving the brokerages self-interest. It really gets paid anyways as the buyer offers a much lower price paying out the buyer brokerages commission. Most commercial firms do not work like you mentioned above.

There are black eyes in our industry that many firms shun at all costs.

I have ran across great companies and commercial brokers and then I have ran across some that I never want to interact with again as they are slimy, unethical, and do poor work on transactions.

We offered on one property and the commercial listing broker sent back another buyers LOI offer on the property! It had the buyers offer price, 1031 information, bank accounts and balance etc.

Really scary how they were operating. We didn't buy that property as we felt it would be a mess to get to closing and undiscovered issues would be found.

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