Commercial Brokers Make The Big Money!

While it is true that the very top residential agents make outstanding incomes, the rank and file of residential agents simply do not. The top residential agents often work like "Mad Dogs" (not Top Dogs) to earn big money, and are  often forced to hire escrow coordinators, loan assistants and marketing assistants, and then spend lots of money on expensive advertising. That's because the commissions are generally lower in residential brokerage.

We all know that commercial buildings and apartments sell for more than houses, so its not hard to see why a commercial sale pays more...

But did you know that leasing pays even more?

Leases are for finite terms and expire, providing predictable repeat business! And leasing puts you at the client capture point when the owners are ready to sell!  

Lets take a closer look at this.

Scenario A:
A nice 3,000 square foot, $300,000 home sold at 6% split between listing and selling agent grosses each $9,000. Not bad.  

Scenario B:
A nice 3,000 square foot office lease for just five years will often pay $15,000 (based upon a commission of $1.00 per square foot, per year of the lease), or even more. That same 3,000 square foot space, if leased at a lowly rent of $2.00 per square foot, could easily produce $20,160, when the commission is paid based on a "percentage of rent schedule" such as 6%,6%,6%,5%,5% for each of the years of the lease.

Because tenant procuring brokers are often paid the full the commission it is not uncommon to get all this money on what is considered to be a very small lease. And if the lease runs for 7 or 10 years, you earn even more!

Imagine what you can earn on 10,000, 15,000  or 50,000 sq.ft. leases!

These are not uncommon transactions! Then too, in softer leasing markets, owners often offer bonus commissions to the tenant-procuring broker, driving the fees even higher!

Leasing pays big bucks!

Still not convinced? Lets look at a small retail transaction, which are most often 10 year leases.

Scenario C:
Retail rents are typically higher, so we will use $2.75 and the same  6%,6%,6%,5%,5% percentage fee schedule; the last five years typically will only pay out at 3% (for years 6-10); the first five years will net $27,720 and the second five will net an additional $13,860

for a whopping $41,580.

These fees are NOT paid out over time!

The fees are payable either on signing of the lease, or 50% on signing and 50% on occupancy by the tenant!  

Think about how many small stores and businesses are in your area. By the way, for simplicity sake I did not include rent increases in these calculations, so the actually number would be higher, because rents are rarely flat for longer terms! Super-size these transaction or land some franchise accounts and you are in the chips big time!  

Industrial leasing commission schedules are sometimes a slightly lower that the 6,6,6,5,5% schedule (for the first five years) I've shown you above, usually around 5,5,5,4,4%, however small industrial deals are very rare. Most are 20,000 square feet and up and can go to 200,000 square feet.  

Think about how many plants, factories and warehouses are in your area. Even a small industrial lease of 20,000 square feet, at $1.00 per square foot rent for five years pays out a hefty $55,200, even if that were split between listing and tenant procuring agent,

that is a jumbo $27,600 fee!

If that was a 200,000 square foot tenant,
the fee would exceed

a QUARTER OF A MILLION DOLLARS!

 

Commercial Agents Do Not Work Long Hours!

The golden hours for commercial brokers are the same normal hours of business of their clients, that is usually 40-45 hours a week, Monday through Friday.

How many top producing residential agents are out every night and all weekend long? And they still have to work during the week arranging financing, inspections, updating the listing status, touring new properties, looking for new listings and managing their team.

The truth is the top residential agents work very long hours every week. Commercial agents work normal hours, take the weekends off and are home with family at night.  They are often members of national or international networks and send business across the country for referral fees that come from the work performed by others! More big money.
 

So Why Are There Fewer Commercial Agents?

The truth is that being a commercial agent is easier, but getting into commercial brokerage is harder. By that, I do not mean finding the business, finding the business is most definitely less competitive, I mean getting a position in a good commercial company and getting trained.  

Most only want to hire experienced commercial agents and do not want to take the time to train new people. Or, if they are willing to train new people, they use an arcane mentor system that takes far too long learn the business, often two years or more.  

A second reason is that owners demand greater skill and knowledge from commercial agents and, until the Top Dogs program was developed and released for sale to the public, there were few good training tools available to propel your commercial career on to the fast track.  

But now you can easily develop yourself into a Top Producer in Commercial Real Estate, with How to Run With the Big Dogs in Commercial Real Estate. Top Dogs is the fast track system that teaches you how to locate and secure commercial brokerage business and to deliver the high level services required by owners. Our 13-week video based training will be foundation you need to create big money in commercial real estate. Order NOW, and you'll be running with the Big Dogs.

P.S. If you are in a residential office now, there may be no need to change companies, because, with the Top Dogs program, you can become the "go to agent" for commercial in your office. All those residential agents can be a great source of new business for you just for the asking!

Order NOW