Re: Agents Commission on a Lease Option - Posted by JPiper
Posted by JPiper on December 16, 2000 at 10:12:40:
I think a 3.5% commission is reasonable when the tenant EXERCISES the option.
The question is, what is reasonable for finding the tenant/buyer to begin with?
One way this could be handled is to pay the agent a commission on the lease itself…let’s say 7% of the total one year lease. When the tenant exercises you pay him the 3.5% LESS the lease commission he has already been paid. That would be one way.
Or…you could establish the upfront money that you want from the tenant/buyer, and then agree to pay the agent a flat fee of some amount if he produces the tenant/buyer…which will be deducted from the 3.5% due upon EXERCISE.
Understand this…all commissions are negotiable. So there are no rules here. But if you want to keep the agents interest you’re probably going to have to pay him something to find these tenant/buyers.
By the way, DO NOT use the agent’s paperwork for a lease/option. Chances are it won’t protect you in the ways that you need to be protected. That particular piece of wisdom cost me about $1500.