Going rate for commission for selling commercial real estate?
I have some land I am looking to sell that is valued about about 2 M.  I was looking to hire a  commercial real estate company to sell it.  I have talked with one company and they want 8%.  I like them and would probably prefer not to have to interview other companies but it seems like 8% is sort of high. I asked them to reduce it but they said that was their rate and they weren't going to lower it.  

Is that normal?  Can anyone tell me what the going rate for commission percentage is?

Thank you.
[{"id": "gf8fmu7", "text": "Seems high to me as well. First, any reference to a \"going rate\" or \"industry standard rate\" is not allowed as it suggest price fixing. Because of that, they responded in that manner.\n\nHowever, through a google search I was able to find that residential real estate (less than $1M) has recognized 8% commission in the past. That being said, typically as the price goes up on a property sale (or land sale in your case), the percentage of commission goes down (you wouldn't want to pay 8% commission on $100M property).\n\nMy suggestion would be to shop around - 1% less is saving you $20K! Unless, of course, the value of your time to shop around is worth more than $20K. GL!", "replies": [], "depth": 1}, {"id": "gf8g9az", "text": "Seems high to me. Usually higher the dollar amount, the less percentage.", "replies": [], "depth": 1}, {"id": "gf8gebj", "text": "5-6%", "replies": [], "depth": 1}, {"id": "gf8ggxm", "text": "I would shop around. It\u2019s business. Seems high to me. (Of course I have no idea where you are...)\nThat said  you also don\u2019t want to give it to a total bozo because he asked for a smaller commission.", "replies": [], "depth": 1}, {"id": "gf8hesw", "text": "I have heard land brokers claim 10% for land since I got in the biz 16 yrs ago (I am a commercial developer).  The land brokerage deals are often a bit tricky, less liquid, require longer time to close once under contract, etc. \n\nAt the end of the day, broker works for you. Interview 3, go with who sells you and has a strong record. A good broker will sell your land for 10% more than a shitty broker, so they are paying for themselves.\n\nA really shitty (cheap) broker will certainly cost you.", "replies": [], "depth": 1}, {"id": "gf8hmx2", "text": "8% is high for a broker\u2019s fee no matter where you are....i could see 8% total selling expenses but not for just a fee, my firm charges 5%, 4% if we can get it done off market", "replies": [], "depth": 1}, {"id": "gf8jcn6", "text": "8 seems high for real estate", "replies": [], "depth": 1}, {"id": "gf8ltti", "text": "6% is fairly standard for deals where I am, but 8 isn't unheard of, especially for a more complicated and longer land deal if it's for development. Depends somewhat where you're located, but I'd still suggest a second and even a third opinion", "replies": [], "depth": 1}, {"id": "gf8qlgj", "text": "I'm a commercial broker in Seattle and charge a standard 5% for land over $1mil. That's pretty standard out here. If it's fairly complicated then I could see 6%, maybe even a little higher depending on how difficult a deal it is, but 8% seems obscene to me. Maybe rates are higher the further away from the city you get?\n\nGet an offer from another brokerage and then make a choice on which brokerage you want to go with.", "replies": [{"id": "gf8yqle", "text": "Land always commands higher fees. Pain in the ass to transact. A good broker pays for himself on this asset.", "replies": [], "depth": 2}, {"id": "ggrxdhc", "text": "Thoughts on whether or not commercial real estate is dying?", "replies": [{"id": "ggswv8y", "text": "It's taking a hit now because of reduced income for office/retail/multifamily, but it's all stemming from Covid. After Covid clears up, restaurants and retail will start earning again, multifamily will kick up as a result as well. Office might see some longer term slowdowns due to an uptick in employees working from home, but I'm very doubtful that work from home will be the new standard.\n\nNot dying, but definitely a considerable slow-down for at least the next year, and the recovery might take a few more years (particularly for office).", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gf8y8u2", "text": "My firm won\u2019t take a land listing for less than 10% if it\u2019s below the 2.5m mark.  We drop to 8% then until 5m then to 6% to $10m. I\u2019d be very weary of anyone offering you below 8% for sure. They are either a discount service or just don\u2019t know what they are doing.", "replies": [{"id": "ggrxcqt", "text": "Is commercial real estate going to die or still worth going into.", "replies": [{"id": "ggssmu4", "text": "I think residential real estates need for brokers will die before commercial. Residential can more simply be handled digitally while the reality of commercial is most of my clients are using my services for my market knowledge and they want to be as hands off as possible. A digital option isn\u2019t going to make a ceo or investor all of a sudden have more time or trust his assumptions in the market. What I do see though is a transition in expectations of brokers. For the first time in history younger brokers seem to have a true edge over the old timer brokers.  I\u2019m in my mid 30s which is young in this industry and most of my big clients fired a previous 50+ year old broker to come to someone with modern marketing skills and more \u201chustle\u201d in the market.  There\u2019s huge opportunity it just takes a lot of work and time to grow.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gf8zfxb", "text": "Where is the land? I might be interested if in CO", "replies": [], "depth": 1}, {"id": "gf97ajd", "text": "Land brokers for commercial I know do 10%+ deals. Harder to sell land, smaller pool of buyers, more niche than other classes.", "replies": [], "depth": 1}, {"id": "gfatzho", "text": "For commercial where I'm at it's 10%  or occasionally 8%.  We don't generally go lower than that unless it's really high (above 75 million or so).\n\nThis can vary from area to area and depends on how the broker negotiates.   If the person gets the job done it's worth it.  Commercial deals can often take a year or even longer and have many more moving parts than a residential deal and can easily fall out in that time due to zoning issues or other problems.  They have to make sure the pay is worth their time.", "replies": [{"id": "gfcwyn1", "text": "What region or market are you in?", "replies": [{"id": "gfdb5b0", "text": "I'm in Georgia.", "replies": [{"id": "gldp922", "text": "Hi I\u2019m in GA as well, looking to acquire several pieces of land for small mf development, please contact me if you have anything interesting.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gfbrfn5", "text": "What is the land?  It doesn't seem unreasonable to me but it kinds depends what they have to do to sell it.  If its an urban/suburban infill site for retail or something that isn't bad you can probably get lower, if you have like 20 acres of industrial land out in in the middle of fucking no where and you haven't had any studies or know much about it that is much much more difficult and they will earn every penny.", "replies": [], "depth": 1}, {"id": "gfc11kg", "text": "Land buyer here. I've bought a lot of land, but never sold any as a caveat. Without knowing more about the piece you have, it's tough to say. Commercial or residential? Any entitlements in place? High or low traffic? If it's raw and in a tertiary market, it might be a dog to sell. If you're selling to a professional developer, they're probably not going to be represented. More often than not in my experience, buyer rep's comp is not factored into the listing agent's price. So without knowing particulars of the piece, 8% is way too high for my market but this isn't my market. And I know that I don't know other markets.", "replies": [], "depth": 1}, {"id": "gfcxdoo", "text": "That is pretty much the market for selling land there is a lot of expensive that go into selling land and it takes a while to move product", "replies": [], "depth": 1}, {"id": "gff450l", "text": "6% is standard for sale here.", "replies": [], "depth": 1}, {"id": "gg4451g", "text": "10% in upstate NY, land is cheaper here though.", "replies": [], "depth": 1}]