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Agent Fees on CRE?
Hello all-
I am looking at 10-25 unit properties. I plan to avoid having an agent, since I feel comfortable with understanding valuations, and want to be able to provide a better value proposition to the Seller by avoiding the Buyer's Agent's commission.
I am assuming that the CRE market for Agent's fees is the same as residential RE: ~3% for Buyer's Agent, and ~3% for Seller's Agent, both paid out of the proceeds of the sale from Buyer.
If true, then on a $500,000 property, my bid is $15,000 more valuable to a Seller than another person's bid with the same purchase price. (3% of $500k = $15k.)
Am I thinking about this right? Or, am I making a bad assumption in translating residential RE to CRE?
Thanks!
-Drew
Most Popular Reply
I agree with @Joel Owens , though it depends on market convention. Multifamily investors are expected to be savvy and educated investors so most buyers of multifamily will not use a buyers agent. If you're looking to provide a competitive offer, the best way to do so is (1) to emphasis that if you make an offer you are 100% you will close the deal, and (2) which is in line with (1) show substantial proof of funds and ensure you have a good team to help you get through the transaction (debt provider), real estate attorney, property manager, etc... This way (2) will provide assurances that you will achieve (1).