Commercial Real Estate Investment/broker fees in pa.

Advertisement

Expert: - 9/8/2008


Question
my husband & I are looking to sell our commercial property & business.  it is located in coatesville, pa 19320.  what are the broker fees involved?  can they be negotiated?  also if the listing agent also sells the property will the fees differ?  thanks, susan

Answer
Susan-

My answer below assumes that you understand that a real estate brokers license does not authorize REAL ESTATE brokers to sell a commercial business.  Normally a separately licensed BUSINESS BROKER sells a business unless Pennsylvania has laws that specifically enable a real estate broker to perform that additional service.  Business Brokers sell the rights to use you business name, the right to benefit from the good will with customers that your business has built up over time, etc.  Real estate brokers handle only transactions involving your commercial lease or a commercial property for sale.    

Please check with a few of the local real estate brokers to learn what the usual broker fees are in your market area for the type of transaction you are planning.   Broker fees fluctuate depending upon the geographic area, so you must get this information from brokers in you area.

Brokers fees can always be negotiated, however, that is no reason to believe that you will be successful if what you expect to offer is a below market fee for the area.

If the listing agent sells the property, they normally are paid the full amount of the commission that was intended to be paid - in aggregate - to both the listing/owner agent and buyer/lessee agent.   It is not uncommon however, to negotiate a listing agreement that specifies a specific commission fee be paid if there are two agents (one listing agent and another buyer/lessee agent) involved, and another fee arrangement - often paying less in total - if the listing agent represents both sides of the transaction.

Note that usually one broker commonly represents the listing side of the sale/lease, and another broker represents the buyer/lessee.       Beware however, if the same broker represents both the listing side of the transaction and is also the agent representing the buyer/lessee in the transaction, be certain to check with the local board of realtors to discover if "dual agency" transactions are allowed in Pennsylvania.  If dual agency is acceptable, be certain that the broker involved has procured all the necessary - fully executed -"dual agency" documentation from BOTH of the parties in the transaction.

Good luck,

-Jim  

Commercial Real Estate Investment

All Answers

Answers by Expert:

Ask Experts

Volunteer

Jim Avancena, CPM

Expertise

Best qualified to answer questions that involve commercial leases, that is, basic issues as well as the often unexpected effects of the complexities and inter-relationships of the provisions a lease may contain, explain how seemingly innocuous text in your lease can have a major impact on a Tenant or Landlord and their business operations, and the common practices utilized in the industry. I can untangle most matters that may come up from the time a tenant begins searching for a office or store space and the lease acquisition process, concerns related to remodeling/improving the leased premises, moving-in, subletting or assigning the leased space, and a long list of problems that may come up during the lease term and even after a tenant moves out. I have practical experience with most property management issues and resolving landlord and tenant disputes - especially those involving what may appear to be overcharges assessed for additional lease charges like CAM costs, operating expense reimbursement, real estate taxes, utilities, construction improvements etc. Note that I am not an attorney and cannot provide legal advice.

Experience

Thirty years active experience in the commercial real estate industry as a licensed real estate broker in the Washington DC Metro area (DC, Northern Virginia & Maryland). I have been admitted (approved) by the Maryland and DC courts to testify as an expert witness on the subjects of Commercial Leasing and Property Management in the area of standard industry practices. I have had a business for the last 14 years advising virtually every form of business entity from large national corporations to the smallest ma & pa new businesses regarding a wide range of commercial real estate matters in addition to property management and commercial leasing.

Organizations
Currently my three children keep me so busy that it is difficult to participate in organizations with continuing and specific time requirements.

Publications
I publish a local commercial real estate newsletter titled: "Tenants First". My firm was the subject of a high profile Washington Post business section cover page (2.25 full pages) feature story on January 13, 1993; titled "Overcharging Overhead".

Education/Credentials
BA in Political Science from Memphis University, and five years of study in the real estate development summer program at MIT. I was certified as a commercial property manager (CPM-IREM), and currently hold a brokers license in Maryland and the District of Columbia.

Awards and Honors
The same plaques and honors that most others in my industry have earned. I have none that I consider especially meaningful.

Past/Present Clients
Past clients include: The World Bank, George Washington University, National Association of Criminal Defense Attorneys, US Department of Commerce, The American Benefits Council, K-Mart Development, many law firms, a national union, other major organizations, and many, many small business firms and retail operators that I am most honored to serve. I estimate more than 1,500 firms/organizations.

©2012 About.com, a part of The New York Times Company. All rights reserved.