Negotiating split commission

[north211]

Hi, I am not experienced at selling commercial property but have one for sale around $7m+ in a Melb industrial area.

What would a reasonable percentage for split commission be on this amount, agent had it before...no sale, so I want to use 2 agents, original agent wants to increase commission if split.

Dealing with national agents.

Any feedback on this would be a great help.

Cheers all

 

[chilliblue]

Providing that you are not under contract with the old agent, why would you split the commission?

Both agencies could have the listing on a non exclusive basis and ensure that you are happy to pay or not depending on the case on cost and the way that they market the property.

Which agencies are you talking to as some have synergies and some do not.

 

[Plumber101]

does it have a tenent?
ROI?
link to add

 

[ianvestor]

In the 22a's I've signed, to get commission the agent has to be the 'effective cause of sale'. i.e. No split. I'd look at those conditions very carefully before signing either of them up.

Unless of course you feel you have some kind of moral obligation to the first agent?

 

[north211]

Just to clarify, what I am asking is what percentage of sale commission should I negotiate on this as a whole.

First agent had property, now 2 agents working together so what sales commission would you find reasonable ie 2% or less...

 

[chilliblue]

The larger companies do it as 150% of the commission with 100% going to the primary agent and the 50% going to the second if they have introduced an buyer.

Does this help?

 

[ianvestor]

The larger companies do it as 150% of the commission with 100% going to the primary agent and the 50% going to the second if they have introduced an buyer.

Does this help?

I think that's wildly different to what North just asked.

He's talking about the total commission payable as a percentage of the sale price. Asking because it might be a different TOTAL commission % when there is more than one agent involved.

Sorry, I don't know the answer.

 

[chilliblue]

I think that's wildly different to what North just asked.

He's talking about the total commission payable as a percentage of the sale price. Asking because it might be a different TOTAL commission % when there is more than one agent involved.

Sorry, I don't know the answer.

Well that would vary in accordance to the following:

- Estimated sale price

- Amount of work agent expected to undertake

- Amount of advertising agent expected to bear

and the answers to these are not quantifiable.

Best thing to do is to get in touch with a local agent, a larger commercial agent and a national agent and their prices.

 

[charlieandkath]

On that amount no more than half of one percent. I reckon that would be fair. That is 35k to whoever sells it. Put that into an hourly rate and would be more than enough. If they don't want 35K there would be someone who would and they would do a good job. No advertising costs to be paid by vendor either. That annoys me when they charge you advertising on top.

 

[north211]

I think that's wildly different to what North just asked.

He's talking about the total commission payable as a percentage of the sale price. Asking because it might be a different TOTAL commission % when there is more than one agent involved.

Sorry, I don't know the answer.

Thanks ianvester thats exactly what I mean, I worded the post poorly.

Unfortunately around $35k would probably just pay for the national advertising campaign.

I just wondered what other investers paid in commision...with this property have to deal with national agents.

still interested in advice or what others paid.

 

[PrimeCommercial]

With a mortagee auction that our office had in conjunction with another agency the agreement was 60/40 split at the normal 2% + GST.
It was just under $2mil upper north shore sydney.

 

[charlieandkath]

Hi, I am not experienced at selling commercial property but have one for sale around $7m+ in a Melb industrial area.

What would a reasonable percentage for split commission be on this amount, agent had it before...no sale, so I want to use 2 agents, original agent wants to increase commission if split.

Dealing with national agents.

Any feedback on this would be a great help.

Cheers all

How much have first agents costs been so far, advertising, time spent etc???

 

[andrew_de_a]

On that amount no more than half of one percent. I reckon that would be fair. That is 35k to whoever sells it. Put that into an hourly rate and would be more than enough. If they don't want 35K there would be someone who would and they would do a good job. No advertising costs to be paid by vendor either. That annoys me when they charge you advertising on top.

Lol. You expect the agent to pay for a 7mil commercial properties advertising on a 0.5% comm.

 

[charlieandkath]

Lol. You expect the agent to pay for a 7mil commercial properties advertising on a 0.5% comm.

Yes, why not? Internet surely must have slashed costs in this area. Get creative, do something different, get it on peoples radars, take it international not just national. Play a few of these big real estate people off against each other.

I'm still waiting to see what the first agent spent on his campaign so far. North should get a written list of costs. I bet it would not be as much as they let it on to be.

Cheers

 

[charlieandkath]

Lol. You expect the agent to pay for a 7mil commercial properties advertising on a 0.5% comm.

Just went on realcommercial.com.au and there were 5 properties matching Norths description. What would this sort of add cost??? A similar add on realestate.com.au is about $100 I think. Let us say $1000???

 

[andrew_de_a]

Just went on realcommercial.com.au and there were 5 properties matching Norths description. What would this sort of add cost??? A similar add on realestate.com.au is about $100 I think. Let us say $1000???

Do you think a national campaign would consist solely of Internet?

 

[charlieandkath]

Do you think a national campaign would consist solely of Internet?

No, of course not and was not suggesting just internet.

Something in this thread is not adding up to me though. North said he has already had it for sale by the first agent. I want to know in writing what that first agent spent on advertising. No bullcrap, 100% honest figures.

 

[north211]

No, of course not and was not suggesting just internet.

Something in this thread is not adding up to me though. North said he has already had it for sale by the first agent. I want to know in writing what that first agent spent on advertising. No bullcrap, 100% honest figures.

I have no reason to "bullcrap"

You will understand I don't want to go into to much detail, however similar amount was paid previously, commercial property has been difficult especially it seems with banks not keen on lending for commercial, so property had a break & is to be relisted sometime this year.

Advertising consists of internet listing which is not that expensive...what is expensive is colour advertising in daily papers not just in one state need to cover whole of Oz, also advertising in national financial papers, colour brochures to targeted potential puchasers & on & on.

 

[charlieandkath]

I have no reason to "bullcrap.

Not talking about you bullcrapping North. What I am trying to say is that you have employed agent number 1. Therefore you should have the right to have a detailed account of what was spent on advertising. If he can't give it to you then to me that agent has no integrity and therefore I would not be using them again.

 

[north211]

Not talking about you bullcrapping North. What I am trying to say is that you have employed agent number 1. Therefore you should have the right to have a detailed account of what was spent on advertising. If he can't give it to you then to me that agent has no integrity and therefore I would not be using them again.

Thanks for your reply however I am not sure how this got sidetracted into advertising. Of course I know what the campaign will cost, that is discussed & examined prior to contracting with agent, this is not the question I was asking.

What I was asking is what is the total commission would you expect to pay for 2 national agents working together on this type of property ie 1.5%-2%?