Hi WSO,
I'd like to get your take on a co-brokers fee for a $50M+ asset. I'm currently working an off-market deal where I'm being covered by the seller(my first rodeo). I have worked with a colleague to find two highly interested buyers. I have already agreed to cover my buddy who found the buyer reps. Obviously, the buyer reps are also looking to be covered by me also.
Could anyone give me their thoughts on what would be a "reasonable" fee for the buyers reps, without coming off as a prick(.10%,.15%,.25%)? I'm not a greedy person, but I also wouldn't want to just toss away money if I can prevent it. Thanks WSO!
I've regularly seen fee caps based solely on dollars and not on bps. On a $30mil apartment deal in San Diego the institutional seller was offering a flat $100k. That's pretty light in my opinion but that's what was published. I would say a max of $250k or 50bps on your size deal.
Just looking at our dispo fee schedule, we would pay a broker somewhere btw 50-73 bps (btw $250k and $365k) but likely towards the lower end of that range. However, that includes a full marketing effort and all of that jazz. so take it with a grain of salt.
Thx for the input guys. That's my first time hearing of the 'flat fee' option. So I wouldn't be too far off if I was to offer 10-15 bps to brokers that are working the deal with me.
I think 15 bps to co-broker would be great. Especially if you've already done the heavy lifting.
I think I'm going to actually pay around 25 bps to 2 people who are assisting me. I appreciate all of your opinions, based on your comments I believe 25 bps is more than fair especially with 3 people on the deal.
Based on what I read above, the fees seem light. I have been pitching off-market apartment deals on the West Coast for the past few years. Have had buyers sign buyer-paid fee agreements on nearly every deal (the Bascoms and Fowlers of the world).
I can tell you that for a deal under $25MM total price, getting 100bps is almost always never an issue. I have had groups sign 100bps on deals as large as $75MM. Most groups will push back, but some will do it.
If someone offered $100k flat on a $30MM deal, I would ask for it to be paid in cash in a duffel bag, and make sure to kick the buyer in the nuts afterwards. That is insulting.
In response to the original post, is your buddy direct to the buyer? Or is he direct to a buyer's rep? Big difference.
Unless you are direct to seller or buyer, you should be happy getting a referral fee. 10-15% of the "total commission".
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