After three years of selling homes (REMAX) I very recently decided its time to throw my hat into the commercial ring and give it my best shot. I was doing very well in residential but my heart was just not in it. My personality, background, education etc. all are suited more for commercial.

I am interviewing with three commercial brokerages (all are top ten in my market) this week and hope to choose one by the end of the week. However, I'm finding that the splits in commercial are terrible. The brokererage I interviewed today (locally based private firm) starts you out at 50% and you can get up to 70% after you close a $100k total commission which is fine but then at the end of the calendar year you go right back to 50% to start the next year. They give you a cubicle, provide market research, some marketing for your listings, and a good brand name. No formal training or leads (actually if you get a lead through the broker then they take 65% and you get 35% for doing all the work).

This is an especially painful pill for me to swallow considering I just left a brokerage where I had a private office and kept 95% of the commission in exchange for a nominal desk fee and self-paid marketing. But everybody I talk to says the things I should be focused on as a new commercial agent are 1.) a good mentor 2.) a company with significant market share 3) a decent support staff. Does anyone have commercial brokerage experience they can share with me on this? Is 50% just the price I have to pay to play?

Thanks in advance

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Bennet Sebastian
Principal, Broker
Central Florida Commercial Brokers
301 E. Pine St, Ste 150
Orlando, FL 32801

Specializing in central Florida commercial real estate sales and leasing. Helping companies and individuals alike invest in central Florida commercial properties . Contact us for more information about commercial real estate in central Florida.

I would think production = serious negotiation power Bennet. Although a very successful residential agent, it doesn't sound like you have a lot of experience in commercial (I think you were the one to say it) - So one would imagine, as with many industries, even with a lot of experience in a previous parallel vertical, you have to start at the bottom.

I am sure if you close substantial deals in your first year (You will have to at 50%) - you will be able to re-negotiate your contract as great agents in commercial are likely hard to find.

I don't have any experience in this field, but it sounds like a situation where you ask yourself - Do I take the training and use the name to close at 50% or do I foot the bill with no experience, and go it alone.

How many more interviews do you have planned, could it be that these particular companies are just on the low ball in terms of commission?

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I dont mind having to start at the bottom again but its the fact that you keep going back to the bottom every year that gets me. The guy I interviewed with at this firm was an old aquantance from high school days and he pretty much gave me the inside scoop on the firm and the industry in general. He too starts back at 50% every year despite having been there for six years and being a top producer type. Says he enjoys where he works and the team he works with so I suppose he has a comfort zone he doesnt want to part with.

I had an interview with another RE/MAX office here that has recently started a fledgling commercial division. There are three or four full-time commercial people in the division but the resources, collaboration and market presence just don't seem to be there. They focus more on working with smaller investors, entrepreneurs and local mom-pop businesses rather than the large corporate types. It would be a great place to be once I built a solid foundation but probably not where I would learn and grow quickly.

I have another interview with a Coldwell Banker Commercial office tomorrow. They have about 30 commercial agents and their head guy is one of the most knowledgable and respected in the industry. I remember interviewing with their residential office a few years ago when I was getting into the business but can't remember what their splits were or if it will be the same for the commercial side.

My experience on the residential side tells me that my cost of doing business including overhead (office space, dues, memberships, supplies, etc.) and marketing (internet, print, brochures, etc) come out to be approximately 20% to 25% of my gross commission every year. So going to a brokerage where they give you a desk, and pay for some of your marketing I would expect to pay roughly 25% to 30% (to include profit) in a split. Am I missing something else? Do brand names in commercial just weigh so much more than they do in residential?

__________________
Bennet Sebastian
Principal, Broker
Central Florida Commercial Brokers
301 E. Pine St, Ste 150
Orlando, FL 32801

Specializing in central Florida commercial real estate sales and leasing. Helping companies and individuals alike invest in central Florida commercial properties . Contact us for more information about commercial real estate in central Florida.

This isn't going to help much because I don't have specifics but I met a girl over 7 years ago that joined a commercial real estate firm & earned over $300,000 her first year in the business! She had no prior real estate experience.

She tried to get me to join her (I don't remember the name of the company), but her office was in downtown Chicago (I work in the southwest suburbs) & I love residential and don't have any desire for commercial or commuting downtown.

I'd say start with this company since you can always leave. You'll start meeting other commercial agents and will learn more about specifics of other companies. Best of luck!

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Southwest Chicago Suburbs Real Estate is an affordable area with close access to downtown Chicago. Money Magazine says that Orland Park real estate is one of the best places to live in the U.S. Next door you can find Tinley Park homes for sale and get Orland Park amenities at a more affordable price.

FYI... I ended up joining Coldwell Banker Commercial. Their resources and presence in my market were too strong to pass up plus they worked with me on the commission. I've already received three leads from the office and have a listing appointment for an office condo next week.

If anyone wants to chat about getting into commercial just send me a PM and I'd be happy to share my thoughts with you.

__________________
Bennet Sebastian
Principal, Broker
Central Florida Commercial Brokers
301 E. Pine St, Ste 150
Orlando, FL 32801

Specializing in central Florida commercial real estate sales and leasing. Helping companies and individuals alike invest in central Florida commercial properties . Contact us for more information about commercial real estate in central Florida.