commission structure of commercial vs residential real estate in IL
I'm currently a residential broker in IL and I have a client that wants me to help them find a commercial property.  For residential real estate, being a member of the MLS protects us on the commission front since any co-op commission that's listed becomes binding.  Does commercial real estate do something similar?  Is the commission listed in CoStar?  Thank you!
[{"id": "gxm7sns", "text": "It's generally negotiated depending on the size of the deal, and your relationship.", "replies": [{"id": "gxm85n6", "text": "so it's not a set percentage that's advertised?   My managing broker recommended that I get the listing agent of the commercial property to sign a commission agreement for co-op that we use for non-MLS properties prior to showing the property.  I want to make sure I'm protected while also going about this the right way.", "replies": [{"id": "gxmaiuw", "text": "The percentage is different if it's a 400k old auto repair shop or a 40 million dollar mall. \n\nThis is location/asset class/relationship dependent.", "replies": [], "depth": 3}, {"id": "gxmak7s", "text": "What seems fair for you?", "replies": [{"id": "gxmbgsl", "text": "I know that the commission itself differs depending on each property type and also what the listing broker negotiates with their client.  I was more curious about how the buying side is compensated.  If their commission is not set until the buyer decides they want to buy the property, what protects the buyer's agent from the listing agent leveraging the knowledge that the buyer wants the property.  I'm assuming that the listing broker already negotiated their fee from the sellers when they signed a listing agreement.", "replies": [{"id": "gxmn2uo", "text": "Contact the LA and ask to see if they have anything allocated for the BA.  Don't give him the buyer's personal info until you have that answer (ie:  ready to submit LOI).  They may say \"yes\" or they may say \"no\" and for you to get paid by the buyer you represent.  I would suggest you setup a buyer rep agreement with your buyer stating what your fee is and that you will try to collect it with the LA but if it's not there, then the buyer has to pay your fee or the portion that you don't get covered.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "gxmgy9l", "text": "Why would they sign a commission agreement with you, if you haven\u2019t even shown your buyer the property? Just write it into the LOI if your buyer is interested in purchasing.. but honestly though you should refer them to someone who knows what they are doing.", "replies": [], "depth": 3}, {"id": "gxmi1q2", "text": "We never advertise splits. The big brokerages never offer them. We always have a co-op agreement in place before we move into introductions.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gxmbbsn", "text": "I think the better answer is: Will you be providing your client a superior commercial real estate service? \n\nIf the answer is no, then reach out to a commercial broker and \u201crefer\u201d them the deal. You then get to remain focused on your core competencies AND get a percentage of the commercial deal upon closing.", "replies": [{"id": "gxmh6ju", "text": "This ^", "replies": [], "depth": 2}, {"id": "gxmhs52", "text": "Truth. Almost got involved in a resi sale. What a f*ng disaster that almost was. Thank god I brought a resi broker on board.", "replies": [{"id": "gxmo7hs", "text": "I wouldn't even self list my own house, sooo much shit I dont know and dont want to know lol", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gxmmnyq", "text": "The short answer is NO, commercial doesn't have anything similar to MLS and it is not listed in CoStar.  \n\nI think it's good for you to ask but don't take the deal yourself.  Refer it out to CRE agent and partner with him on the deal if you want to learn.  It is a totally different ball game.  \n\nSome listing brokers won't even pay a buyer commission, they certainly don't advertise it.  I know we don't.  In most of the CRE world, if you are representing the buyer, then work out a compensation agreement with you and the buyer directly and get paid from him.  Sometimes the listing brokers will share a portion or have something allocated but don't expect them to offer it.  You will need to negotiate and see what you can do.  If that's the case, put it in the LOI like someone asked and see if they accept.\n\nAs others stated, there is no \"normal\" amount.  It varies by asset, price and etc.  It could be a percent but also a flat fee.", "replies": [], "depth": 1}, {"id": "gxmo6a5", "text": "Thank you everyone!", "replies": [{"id": "gxnd09d", "text": "You need a written commission statement stating that you'll be paid or you have no protection. You are also in over your head for advertising if you don't subscribe to Costar", "replies": [], "depth": 2}], "depth": 1}, {"id": "gxmoljg", "text": "Your client needs to be bound (or trusted).  You can ask what co broke is offered but it clues the listing agent into a lack of experience.  Just put what you want in the contract and you may have to negotiate it.", "replies": [], "depth": 1}, {"id": "gxn056c", "text": "Folks may say to you \"you're not cut out for this yet\". What they're really trying to say is \"commercial is a complicated world, so be careful and take this opportunity very seriously.\" \n\nOthers may say \"why would the buyer want to work with you as an inexperienced broker?\"  That's your relationship, not theirs. Maybe your client likes you and sees potential.\n\nI don't know your state, but I can tell you Commercial is more contract-based. The terms you agree to are the terms. If your client wants help with commercial property and intends to pay you for services, they should be happy to sign a fair agreement. \n\nFinding outside help may not be a bad idea when the time is right. I would 1.) get the opportunity signed up with your client. 2.) find a property your client wants to put an offer on. 3.) Draft a super-simple LOI with your client for the property and get them to sign in. 4.) find outside help to close the deal with you for a reasonable fee. \n\nIf you put these pieces together and then go for outside help with an experienced commercial co-broker, you will be in a much better place to negotiate terms with the co-broker. Their role becomes much more simple. \n\nAlso, go read about the rules in your area before signing anything. Posting on Reddit is great, but you're going to want to do some homework. Be prepared to learn something new.", "replies": [{"id": "gxr4ray", "text": "&gt;Folks may say to you \"you're not cut out for this yet\". What they're really trying to say is \"commercial is a complicated world, so be careful and take this opportunity very seriously.\"\n\nNo, they actually mean, \"you're not cut out for this yet.\"", "replies": [], "depth": 2}], "depth": 1}, {"id": "gxnd1rr", "text": "I plan on bringing in a commercial broker once we find a property that my client is interested in pursuing.  Although I've done deals personally on the commercial side, I haven't been the broker.  I just wanted to have a better understanding of standard practice so that I protect myself while also doing what's in the best interest of my client.  I appreciate everyone's feedback/advice.  One of our managing brokers who came from commercial recommended I just ask outright if they are co-operating and have them sing one of our standard co-op agreements.  I felt maybe it's better to get that squared away first so that it doesn't muddy my buyer's negotiations.  Otherwise, yes it would be in the LOI.", "replies": [{"id": "gxoraam", "text": "Would be best for you to refer it opposed to setting unrealistic expectations with your client due to your inexperience. See deals fall apart often when a residential agent gets involved in a commercial transaction. Stay in your lane.", "replies": [{"id": "gxr6993", "text": "Nothing wrong with wanting to branch out, but residential agents typically either get their clients bad deals, or get nothing done and just frustrate people on all sides with their ignorance.  \n\nIf OP wants to branch out, they'll have to start with the attitude that these are learning experiences first, not earning experiences - get someone experienced involved even though it means less money.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gxnfb70", "text": "i usually get paid 7/3 on my industrial leases", "replies": [], "depth": 1}, {"id": "gxp63co", "text": "A lot of good advice in here.  I'll throw another thought into the mix.  Check with your QB (or equivalent).  You might be opening the brokerage up to potential liability by operating in segments of real estate by which you are not qualified.  \n\nI'd make a new friend in the commercial world and have him/her do all the work and you shoulder none of the liability, enjoy a nice 20% referral fee.   Your time is valuable.\n\nI've been in commercial for 22 years, and wouldn't sell a client's house for any amount of money, because I'd like to keep that client as a client.", "replies": [], "depth": 1}, {"id": "gxr5orp", "text": "Commercial is the wild west, where everyone is assumed to be a big boy/girl and the other side is always lying to you about everything so verify for yourself.  \n\nNo, there's no equivalent to MLS and its protection for commission to cooperating brokers.  \n\nMost importantly, you almost certainly *cannot do a good job* for your client...Yet.  There's a lot you don't know, but you don't know what that is yet.  \n\nIf you want to learn - great!  You're in a good place to start.  See if you can find a commercial broker to refer the deal to who is interested in helping you learn...that's going to be a bit of a rare find, but doable.  Observe, learn what you can on your own, read about the things you don't understand, and then ask good questions (i.e. don't ask a question you can google on your own - put some time into researching it and then ask a questions that show you've made effort to understand).  \n\nDepending on the type of transaction and how quickly you learn, it may not take too many deals before you're ready to partner with a commercial broker on one if it's similar - where you take point but they are still around for questions and you split commission.", "replies": [], "depth": 1}]