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Who Pays For The Tenant Broker?
Commissions are paid to the Broker who then pays the agent responsible for the lease. Agents typically work on “splits” with the house. In some cases, a tenant will retain an agent to find a commercial space to let on the tenant’s behalf. Most listing agreements require that the listing agent split the commission earned with the tenant’s representative. In most cases, including commercial real estate, commissions are split 50/50. There are exceptions to this rule. In soft markets where vacancy rates are high and tenants are at a premium, the owner of commercial property may pay the tenant’s representative a full commission. In this case, the listing agent usually continues to receive a half commission, which results in a commission and a half being paid out by the owner.
Commercial realtors are typically paid a commission upon the signing of a lease. The commission is paid by the owner, not the tenant of the property and is typically paid one-half upon lease execution and one-half upon tenant occupancy. The commission is most often calculated as a percentage of the lease value and usually ranges between four and six percent.
