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Updated over 10 years ago on . Most recent reply

User Stats

123
Posts
48
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Andrew Kniffin
  • Investor
  • Seattle, WA
48
Votes |
123
Posts

Agent Fees on CRE?

Andrew Kniffin
  • Investor
  • Seattle, WA
Posted

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

Account Closed
  • Investor
  • San Francisco, CA
203
Votes |
577
Posts
Account Closed
  • Investor
  • San Francisco, CA
Replied

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).

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