On commercial property, we always get ONE MONTH RENT (which is 8.33%) per year.
We don't collect the entire commission upfront (say a 5 year lease). Many agents do. Problem?
1. If the broker finds a good tenant (that is one that remains for multiple years) is also good for the landlord. No turnover and someone that must be successful on the business (commercial) or one who is content in their rental.
2. Since I found you a good tenant, I should be compensated - for each year the tenant remains. To be successful leasing properties, you need to have a number of these "annuities". So if the tenant remains in place 8 years later, I know on the anniversary of the lease, I will get a commission. And what do the agent do? Probably stayed in contact with their client, didn't try to move them to another "better deal" (to earna buck).
The issue today is that many agents don't think LONG TERM. And many landlords don't want to pay.
I think what you want to know is "Does everyone work the same"? The answer has been proven by the responses, agents are independent and can write the contract the way they want. Everything in real estate is negotiated commissions and length of agreements are just two examples.
Talking to your agent and letting them know that you are not happy with the arrangement may be all you need to do. I know of very few agents that want to work for someone who is dissatisfied with them. This business is hard enough without having that kind of negative emotion added to the mix.
Having said that I would only ask for a year to sell a property if I thought that property wasn't going to sell very fast, it takes money to market a property and if it takes a long time to get it back I would not want it going to another agent after I spent my time and money on it. I am sure you can understand that. Houses that are leased and still for sell don't sell very quickly, you have a limited market for them. Many things to consider from the investors side so that may be why he asked for a year.
Now, that being said - if you signed one - what did you agree to in your listing agreement?
This is a point that can certainly be negotiated.
In my area, the tenant usually pays the commission, but even that is negotiable.
You have to read your listing agreement. A section talks about what your listing agent will expect if he/she leases the property. Possibly something equal to one months rent. Below that, the listing agreement typically discusses IF a) the lease is renewed and or b) the landlord sells the property to the tenant.
All agreements are negotiable between landlords/sellers and their listing agents. If you would have spoken to 1 or 2 more Realtors, you might have found different options. I typically do not charge a recurring lease fee, but would charge a commission for a sale as I would likely be involved with that transaction.
Normal? The wording is there for the Realtor to use. If you signed the agreement, then you agreed to those terms. A one year listing is a bit long in my book as I want to have the property leased or sold long before then. A question to the agent would have been why will it take that long to lease or sell it? As always, you can speak to the Realtor's Broker if you have any issues.
Renewals take time and effort and input from both owner and tenant. If you feel 100% isn't a fair commission, talk to you agent and hear what they have to say about it. Too many people get upset about things they'll tell strangers, but never even bring up in conversation with their agent.
Everything in these agreements are negotiable until they are signed.
If you have not signed anything, then tell your agent that you don't agree with that. If they have an issue with it, then tell them you will find another agent.
Keep in mind what the property is like, what the monthly rent is, where it is located, and what the rental market in that area is like. If it is a property is a high end property in an area where rentals are only on the market a couple of days, then you might be overpaying for your agent to bring you a client. On the other hand, if your home is in an area where there are a hundred rental properties on the market which take months to rent and rent is very low, then your agent may be worth the money you are going to pay him.
Think about it this way: If you were in the agent's shoes, would you accept $500 to market a property for a month (keeping in mind that the agent has to pay taxes and potentially a brokerage split on the commission).
Would you expect to get paid $1500-2500 for 2 days worth of work if it leases quickly?
There are a variety of factors that go into rental listings, and each home is different. Think about what YOU are comfortable paying and what you would be comfortabe GETTING paid if you were the agent, again keeping in mind taxes and brokerage splits. Then negotiate with your agent on what you feel comfortable with.
It's more than real estate. It's RAYL-Estate!
Keller Williams Elite
But the commission is usually 50% of one month's rent unless it was the realtor's listing and she procured the tenant, then it's 100%. or if another realtor brings the tenant. Then 100% is split between the two realtors. Actual commission is negotiated between landlord and realtor. The realtor probably put 100% to cover the other 50% that would go to another realtor who might bring the renter. The bottom line is the commission is standard.
All terms are negotiable until listing agreement is signed. There is no 'standard' fee in our business, often vary. The Realtor and or his supervising broker have a duty to protect your interest. This agent must have explained listing agreement terms before signing. Tipically listing agents receive 100% of one month's rent - which are usually split 50 / 50 w tenants agent. Seldom listing brokers charge recurring commission every year lease is renewed or extended. If you have any concerns tell your listing agent, remember he / she works for you, or ask to speak to sponsoring Broker.