Who Pays for Real Estate Brokers? (Hint: not you!)
Brokers are the "doctor-level" professionals of the real estate industry. They've bolstered their skills with additional education on top of experience—on both the buying and selling sides—and have much to offer their clients.To most people, this sounds like someone they want in their corner when approaching the office leasing process, but one thing dissuading them from actually securing a broker is this question and answer:
"Who pays for real estate brokers? Must be me. Well—I don't want to pay extra so I'll do this by myself."
If this is your thought process then, boy, do we have good news for you. You're not the one who has to pay for the broker.
Brokers Come at No Cost to Office Seekers
To seek representation from an experienced broker is at no charge to you as a prospective tenant evaluating office leases and properties.How is this possible you ask? They provide a service, so shouldn't they be compensated?The short answer is yes, and yes, they are compensated, just not directly out of your pocket.
Tenant Rep Broker Commission Structure
A tenant rep broker, who you'll most likely be working with, is dedicated to getting you the best possible deal. Not only will they take time to listen to your needs, they'll take your needs and locate the best properties possible that fit the full scope. Often times, they also know about spaces coming to the market before they're advertised, so there's a tremendous value added there.When working with a broker—rather than gun-slinging a deal by yourself—you're in position to get lower monthly rates and better terms all around for your business and needs.When a deal is closed, you still don't pay out of pocket for the service provided. When the lease is signed, the broker receives a commission (anywhere from 4-6%) from the lease's value.