3 Reasons Not to Look for the Lowest Commercial Real Estate Broker Commission

May 28, 2019
by Donald La

Most of the time, it makes sense to find bargains. After all, people like the idea of saving the money that they have made whenever possible, even when they are making other investments. However, if you have been thinking about trying to find the lowest commercial real estate broker commission, you might be taking the wrong approach entirely. Let’s look at some of the biggest reasons that you do not want to hunt for the lowest commission.

Lowest Commissions Might Mean Lowest Quality

Commercial real estate brokers do a lot of work and have a lot of knowledge. They are very valuable when it comes to these types of deals. Therefore, you have to ask yourself why someone might have a bottom of the barrel commission. In fact, the lowest commercial real estate broker commissions should be seen as a red flag. It will often mean that the broker is relatively new to the field and they do not have the expertise and knowledge that others might have.

The lowest commissions could also mean that they do not know what they are doing at all, and that working with them would not only be a waste of time, but potentially a financial disaster. After all, even if you were to save on a commission cost, if it is for a property that is wrong for your needs, you would be wasting money and time.

You Might Not Take Priority in the Eyes of the Real Estate Broker

Low commissions still tend to attract a lot of people, and those companies that have the lowest commercial real estate broker commissions might have a lot of clients. The fact that they have a lot of clients might even be something that seems attractive. After all, with so many clients, they must be doing something right. However, that’s not always the case.

Brokers who have a large number of clients tend to have very little time to spend working with and for each of those clients. They do not get the attention that they deserve and this can negatively affect their overall investment plan.

The real estate broker needs to make your needs a priority. If they do not, it will be a waste of your time and money.

Brokers Do a Substantial Amount of Work

Brokers do a lot of work. They deserve a fair commission. Those brokers who charge a low commission for each of their clients often have to take on additional clients to make ends meet. They will not be as proactive when it comes to your investment needs as they should be. By providing a fair commission for the work they do, it can help to ensure they are working as hard as possible for you.

Consider some of the things that a good broker will do when they are attempting to broker the perfect deal for you. They can help investors to find properties that are not only perfect for the type of investment they want to make, but also properties that are going to be within their budget. This means they can potentially find cost savings thanks to their knowledge of the market, not to mention their ability to negotiate for you. You want to get the best possible deals on your real estate investments, and this often requires negotiating. Unless you are already skilled in the back and forth of real estate negotiations, you will not be getting the same types of quality deals that a professional real estate broker will.

The brokers can take care of a substantial amount of the legwork that goes into finding commercial properties. They can do the hard work, winnow down the choices, and come to you with the best. Their knowledge can help you to find the most profitable locations and buildings, which is essential.

What Should You Look For?

Now that you know why you shouldn’t strive to find the lowest commercial real estate broker commission it is time to take a look at some of the most important things that you should be looking for when you hire a commercial real estate broker.

Commercial real estate brokers should be knowledgeable in the area where you are considering investments, as well, of course. After all, one of the reasons they deserve a decent commission is because of their knowledge and expertise.

It is also a good idea to learn more about the overall reputation of the broker that is being considered. What has been said about them? Are they the right solution for your needs or should you keep looking?

Should You Choose the Most Expensive Commission?

Just because you don’t want to work with the real estate brokers with the lowest commission, you also do not want to choose someone  because they have the highest commission. A high commission does not mean that they are necessarily better than the others out there.

As always, you will need to put in some time and effort to learn more about the commercial real estate broker and what they are able to offer. Find brokers that have commissions that are fair to them and fair to you, and that have good reviews from other owners and investors. A little research will go a long way in helping with the search for the perfect broker.

By taking the time to know what to look for, and to be sure you are truly working with the best and paying a fair commission, you will be well on your way to finding and investing in the perfect commercial properties for your needs and budget.

Donald La, licensed commercial property broker with years of experience, is a trustworthy expert in the San Gabriel Valley area as well as Los Angeles County. Contact Donald if you’d like to get a free consultation for your property’s needs.

About the author
Donald La
Donald La
Donald is a licensed Commercial Real Estate Broker specializing in purchases and sales in the San Gabriel Valley. Donald and his father have a combined 35+ years experience in real estate and are heavily invested in the newest tools and technology to stay competitive and help their clients grow.