Avoiding broker fees if I'm listing and negotiating deal myself?
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[{"id": "ivlrjey", "text": "Politely tell them that you do not have an agreement in place with them, and you negotiated the deal economics under the assumption that the tenant was paying their commissions. If they need you to pay, then ask for an agreement and let them know that you will need to send over new terms. \n\nOn your future listings, I would not exclude brokers. They\u2019ll hit you up regardless, and there\u2019s no reason to potentially alienate a broker that may have a good tenant for you. It\u2019s just part of the price of business.", "replies": [], "depth": 1}, {"id": "ivlsn9n", "text": "I'm not a fan of do-nothing brokers but I'm not sure why you think the broker did no work when they got you a tenant that otherwise wouldn't know about your space for lease.\n\nNegotiate the terms with the broker and call it a day or negotiate with the tenant where the tenant pays the broker fee.\n\nIn any case you should make it clear in your loopnet listing that you will not pay broker fees (though you will lose potential tenants).", "replies": [], "depth": 1}, {"id": "ivlvlop", "text": "Not paying tenant rep brokerage fees is not a good strategy. The highest quality and credited tenants in the country across all asset classes are represented by tenant rep brokers, 99% of the time. They bring landlords the best tenants. Pay them a fee.", "replies": [], "depth": 1}, {"id": "ivlvp3b", "text": "I\u2019ll be honest. Seems like a rather rag tag operation over there. If I was a broker in that markets I\u2019d probably steer clear because you guys are giving off some red flags. Just my two cents. \n\nThat being said, you should definitely be upfront re: commissions if the way you\u2019re doing things isn\u2019t \u201cmarket\u201d.", "replies": [{"id": "ivm3xst", "text": "High quality landlords don\u2019t think twice about paying tenant rep fees.", "replies": [{"id": "ivmxl06", "text": "Exactly. If you\u2019re not paying a FMV fee (which is already built into the rent) I\u2019m advising my client to stay far away.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ivlzlly", "text": "I hate working deals with guys like this.  Yes that broker should have been more involved but he brought you the deal,  which is the hardest part.  \n\nBoth parties should have been up front from the start but did you really think that broker was working for free?  I\u2019m guessing this is a young broker that hasn\u2019t been screwed yet.", "replies": [], "depth": 1}, {"id": "ivm0tld", "text": "Am I understanding correctly that a broker brought you a tenant? \u2026and you don\u2019t want to pay them?", "replies": [], "depth": 1}, {"id": "ivm3lbb", "text": "Love the username, my daughter also has hair like Merida and because of that she is tough and stubborn. Sounds like there may be something in common. You are good at what you do (assumption) so you see no value in hiring a broker, but as someone already mentioned most quality tenants are repped by a broker because the users don\u2019t have business that intersect, so they outsource to someone with more knowledge and or skill. You cannot hold that against them. You can in the future inform inquiring tenants that if they insert a broker after the face it will be at their expense either as direct payment or baked in to the deal. When presenting a proposal to a broker, just include their fee in your rent. Taking a \u201cwho needs em\u201d approach may work for a while but not forever.", "replies": [], "depth": 1}, {"id": "ivm6z28", "text": "Common to pay (at least) 3% on the total base rent of the initial term to the Tenant's broker.  That's it.  This is for them bringing you the Tenant.  However, if the Tenant (Principle) contacts you first then you do not need to pay any commission even if they bring a broker into the negotiation later on.", "replies": [], "depth": 1}, {"id": "ivmohy9", "text": "Being cheap is probably costing you money.", "replies": [], "depth": 1}, {"id": "ivmp560", "text": "Lol I need no help, but I need help on this situation. Pay the dude, you don\u2019t know what he\u2019s doing behind the scenes. Even if he is doing nothing, he brought you a tenant. They trusted him enough to talk to you\u2026That\u2019s worth money in my world.", "replies": [], "depth": 1}, {"id": "ivmpbvl", "text": "Yeah, you really should pay the fee. And hire a slate of professionals to help you, seems like you're missing the mark on some key issues.", "replies": [], "depth": 1}, {"id": "ivmtdct", "text": "Jack of all trades. Master of none.", "replies": [], "depth": 1}, {"id": "ivmusf5", "text": "What will you do with the prodigious sum of money you save by refusing to pay the broker?", "replies": [], "depth": 1}, {"id": "ivvixof", "text": "These are just my two cents.  And I'm sure you're not going to like my answer, but I align with a McNellis  when it comes to this sort of thing.  First, let's start with the fact that this broker found your deal and brought the tenant and made the transaction  possible.  You should pay them just for this.  Now let's discuss why acting as your own broker is (per McNellis and my opinion as well) foolish.  With bad deals, certainly any broker would gladly split a commission with you to get rid of the property, no question.  But in hot markets where good deals are rare, if the brokerage community knows you represent yourself you, they might share the OM or a sales package but the will likely not share other information they know about the property.  And if instead of splitting the commission with you, you brought in and are represented by a broker yourself, you now create two potential sources of future deals where they appreciate you instead of one that's convinced  you robbed them out of a full commission.  Think of it like this: if you have three transactions in a year,  representing yourself would result in three brokers that likely won't return your calls going forward where as if you brought a broker to represent you each time, you'd have six brokers who think you're the ideal professional and will be sure to bring you, and tell you, about the best deals the moment they first come across their desk.  In fact, McNellis would say you should pay the listing broker the full commission (and pay your broker on the side).  In a hot market, the listing broker is going to  make sure you see the best deals first over other buyers who are trying to cut his commission in half.   When brokers are showing the seller the offers (and if they are nearly all the same) who's offer do you think they are going to promote more?  Mine where they would end up with the full commission or yours if they are going to end up with half the fee as they would have to split it with you?  No difference to the seller.  As McNellis says, it's human nature.  \n\nLastly, just because the broker didn't do much else on this deal doesn't mean they won't in future deals or don't have other quality tenants, etc.  They are the most important service provider for a developer (as said per McNellis or that I could also attest to, as a developer myself).  You have to take care of them and grow your network as much as possible.  Treating this broker right will pay you much more than what you would have saved on commissions.", "replies": [{"id": "ivw2r0t", "text": "&gt;Should I write on my Loopnet listing that we will not be paying broker fees at all to avoid this in the future?\n\nNo.  I would not do that.  If you put the message \"you won't be paying broker fees,\" you will  be limiting and alienating those brokers, and who knows who won't be reaching out to you, that would have otherwise.  It's likely that broker would have seen this message and skipped you and you wouldn't have found the tenant that you did.", "replies": [], "depth": 2}], "depth": 1}]