This typically will be 5-7% of the total lease consideration. If you are the landlord’s broker, you will have already negotiated in your listing agreement what the commission percentage will be as almost 98% of the time the landlord pays all the commissions. Meaning, 50% to your brokerage firm and then 50% to the outside brokerage firm (more splits to come before you get paid). Unless you happen to represent both sides as a transaction broker, you can expect to split whatever the commission is 50/50 with the other broker. Typically, you will have two brokers involved: the tenant rep broker and the landlord broker. YEAH!!!! How much will you get paid? The answer: It depends. So, you are close to inking your first deal. Learn from those around you to better yourself. Allow other people’s successes to motivate you. Don’t be deflated when you see the broker in the office down the hall close a $5 million-dollar transaction when you are still trying to get your first lease signed. Keep your head down and do the work, learn the market, cold-call and network like crazy and set your own (brisk) pace. Be patient with yourself- but set goals and be accountable to them. Keep it in perspectiveĭon’t compare your chapter one with someone else’s chapter 20. You can make a lot of money in this business, but starting isn’t easy. Please just know that it is all totally worth it. Do you have the patience you think you have? Really take a hard look and see if you could stomach not making money for a while. Unless you have money saved, are still living with your parents, or have a significant other that can help carry the weight for a little while, the barrier to entering the commercial real estate business can be tough. That can be a tough pill to swallow if you are in need of money and have rent or a mortgage, or like to eat, or have a family to support. When I first started, I was told many times to plan NOT to make ANY money for the first few years. While some companies might offer you a draw or advance on commissions, don’t count on it. The majority of Commercial Real Estate Brokers don’t get a salary. Plus, there are many benefits from starting out and learning in an environment with experienced brokers. You can also start your own brokerage firm, but many (if not all?) states require you to work with a established brokerage firm for a number of years before going it on your own. However, you can be limited in this role. Some may hire you on as an actual employee, as a runner or an assistant with a small wage. Note that I said that “most” commercial real estate brokers are independent contractors, not all. If you start out in commercial real estate and act as if it’s your own business and you plan and prepare that way, you will be so much better off in the long-run. As an independent contractor you are essentially self-employed (although your brokerage firm still has a ton of say). This and many other traditional employee benefits are out the window in this business. Don’t forget about your health insurance either. Keep in mind with this setup the brokerage company will NOT withhold taxes and you will be responsible for taking care of the IRS (Taxes, Social Security, Medicare, etc.). This means that you are a contracted employee, you’ll have a written contract with the brokerage company and will be paid out as a W9 employee. Independent Contractorįirst, most all commercial real estate brokers work as independent contractors. Okay, now that we have established that you have some level of patience or at least perseverance- let’s continue. I am not trying to sound harsh, but patience is a mandatory skill not only when you first start in commercial real estate but throughout your career. If not, save yourself the time as getting into commercial real estate may not be for you. I will dish it all out for you, but I have a question first… Are you thinking about getting into commercial real estate and are wondering how commercial real estate brokers get paid? Or a new broker trying to figure it all out? Well, I am so glad you are here.
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