Some great answers on this one. Did this take care of your question Peter?

Thanks guys....To be honest I primarily work in sales and don't have experience with leasing. I think it's probably best if I recommend my client to a specialist.

Peter,

What Greg meant to say was:

Since there is not a sale escrow, to which you can submit a commission demand, you will have to collect from either the tenant, the landlord, or the cooperating broker. To do this you will need to have an enforceable compensation agreement.

Expanding on what I wrote earlier, it is a good idea to start with your own principal. If payment of the professional fee is later shifted to a landlord or the landlords broker due to commission funds being available in the space listing agreement then, fine and dandy.*

What Jed meant to say was:

IF your broker has guidelines on leasing compensation, follow those guidelines;

since you came to Trulia A2A with this question, I inferred that you had already asked your broker and was told to come up with your own solution; perhaps your broker has previously done residential sales , and hasn't developed a leasing compensation plan.

As far as determining how much to charge? Try to figure out how much time and money you will spend on the search and transaction and what your probability of success to complete it is.

A percentage of the value of the lease over time is one way to figure it, but that is not necessarily the only way. An example: If your tenant signs a ten year lease, do you deserve twice as much commission as a five year lease? How about renewal options? Do you get paid for those? and when?

Then there is the age old conflict of interest, a straight percentage gives you the incentive to find and place your tenant into the largest, most expensive space for the longest lease that you can persuade your tenant is in his best interests. Maybe your tenant would like to pay a flat fee?

Oldies but goodies
"How to Profit In Commercial Real Estate Investing" by John B Allen c 1993 pub Dearborn

""Winning in Commercial Real Estate Sales" by Thomas Arthur Smith c. 1990 pub Dearborn.


You are talking tenant representation? How about getting a tenant representation agreement from your tenant early in the search? It is possible that you may find a space that does not pay a cooperating agent fee.

Hi Peter,

Not sure if you're in need of a commercial vs residential leasing agent. If it's residential, I have 10+ years leasing S.F. rentals & represent clients from S.F. to the Peninsula. I have a track record of zero evictions!

Keep me in mind if there's a need.

Hi Peter
on leasing properties here in the Seattle Market the fee is 50% of the first month Rent on a 6 to 12 month Lease the this is split between each side

in Texas it is usually 30-40% of monthly rent.

Peter,
Your managing broker should be able to answer a question like that.