Commissions on off market deals

[Vernon Chiu]

Would like some clarification and hope I'm doing the right thing.

A multi-family broker I deal with regularly brings me am off market deal. It looks like this will work out. He advised me that the seller is going to pay him 2.5% and ask if I could put in another 2.5% to "make it whole".

I see no issue with this as he brought the property to my attention without the need to elbow my way through many other prospective buyers. One of my partners feels that this was odd as the seller typically pays all the commission.

This is my first off market deal but I feel it is only right to pay half the commission as he is working to put this deal together between two of his clients. I feel no reason to begrudge him the 2.5% if it means building good will and more potential deals down the road.

Am I being swindled or am I doing the right thing? Your thoughts would be appreciated.

[Matt J.]

@Vernon Chiu I’d pay him the 2.5%. In a market this tight you’re lucky to not have to compete against other buyers, especially if it’s a good deal.

Treating him right will pay dividends downstream.