When is either party obligated to pay a broker’s fee upon the sale of commercial real estate?
First of all, for either party to owe a broker’s fee (often called a commission), there must be a written agreement (often called a listing agreement) signed by the party who is to pay the fee. No agreement, no fee. The fee is usually stated as a percentage of the sales price.
Assuming there is a written agreement, it alone will determine when the fee is owed. Commonly, the fee agreement will provide that the seller will owe the broker’s fee when the property is sold to a person produced by the broker during the listing period – 90 day or six months, for example. The fee agreement may also say that the seller owes the broker’s fee if the property is sold to anyone during the listing period, whether or not the buyer was produced by the broker.
In some commercial real estate deals, the buyer and seller agree to split the broker’s fee.
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