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2013-05-06 7:46 AM

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Subject: Real Estate Rental Question

I know its standard on a lease renewal for the broker to get 10% (or 1 month's rent) of the annual lease value. Does anyone know if the tenant asks to extend for 3 months only that the broker also gets 10% of that 3 months value ? TIA 



2013-05-06 10:34 AM
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Subject: RE: Real Estate Rental Question
gr33n - 2013-05-06 7:46 AM

I know its standard on a lease renewal for the broker to get 10% (or 1 month's rent) of the annual lease value. Does anyone know if the tenant asks to extend for 3 months only that the broker also gets 10% of that 3 months value ? TIA 

If you're talking about commercial leasing, In the US I believe the broker generally gets paid on the total lease amount signed period.  I know we signed one a few years back for a year with an option to extend for an additional 24 months and my broker wasn't too happy because he only got paid on the first year and not the second two years because it was an optional extension.

Also, from the broker standpoint, similar to residential sales there is a total commission amount paid to the brokers and it gets split between the buy and sell side brokers.

2013-05-06 10:48 AM
in reply to: #4728773

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Subject: RE: Real Estate Rental Question

In the residential side it all depends on the region of the country that you are it regarding what is standard commission.

If it is just a renewal you might pay a flat renewal fee instead of a % of rent. For new lease ups the commission on short term (less that a year) is usually higher that for one year lease.

 

2013-05-10 2:47 PM
in reply to: #4728773

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Subject: RE: Real Estate Rental Question

A lease broker, no.  Their fee is charged at the time they find you the tenant.  It is not normal for a broker to have a stipulation that if the tenant extends they are owed more money, it would be very difficult to follow up on.  Same as if your tenant bails 4 months into a 12 month lease, you will struggle to get your 8 months of fees back form the broker.

A property manager who is taking 10% out of the monthly rent check however, will continue to do so.

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