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hughmartinez, Other/Just Looking in Los Angeles, CA

Commission on a Residential Lease in L.A. How is it typically Calculated for both sides?

Asked by hughmartinez, Los Angeles, CA Wed Jun 6, 2012

Hi, I am helping my boss lease a residential home in Los Angeles, CA. THe home is listed on the MLS and both the lessor and lessee (my boss) are represented by agents. The listing broker offered a 2.5% cooperating broker commission. Since the lease is for 2 years, will the commission be calculated on 2 years? Or will it be calculated on 1 year eventhough it is a two-year lease?

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Heather Paul’s answer
Jeff is correct, it should be calculated on the initial term that the tenant leases for, you can decide if you want to pay a commission on any renewals. The commission is usually paid out of the deposit to the agents/brokers first and then the rest goes to the owner. 2.5% commission is very low for a lease, the average lease commission is 6-10%, if you were to offer 6%, this would be offering 3% to the selling agent. You sound like you might also want to get additional information on the contracts and disclosures, this is a legal binding contract and you don't want to make any mistakes as this could be costly to your boss.
Good luck and Have a great day!
Heather Paul, Realtor
Coldwell Banker
310-586-0364
http://www.HeatherPaulOnline.com
0 votes Thank Flag Link Wed Jun 6, 2012
The commission should be calculated on the full rent of the term that is signed under contract. That is how it is usually done. Some brokers only ask for commission on the first year though and nothing after, but not all so it depends upon your listing agreement. Just read through your agreement and it will be clearly spelled out. 2.5% per side is the very lowest I see. Commissions generally range from 6-10% of the signed lease full rent due immediately upon signing.
0 votes Thank Flag Link Wed Jun 6, 2012
The typical commission for lease is between 5-8% of the lease price and it is paid by the owner (person that has the house for lease) - this amount is split 1/2 to each of the agents/brokers. If they offer 2.5% their agreement with the client is 5%. Your boss (lessee) will not be paying it. - Hope this helps.

In what area are you looking to lease? What is the amount and the timing?
I would love to help you find it.
please send me an email @
Valeria@motronearealestate.com
(310) 614-6489
0 votes Thank Flag Link Wed Jun 6, 2012
It's based in the total value of the lease term. 2.5% on the 2 year term total.
0 votes Thank Flag Link Wed Jun 6, 2012
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