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What Factors Affect a Commercial Real Estate Broker's Salary?

Documents associated with a real estate sale.
Real estate brokers must pass exams where they learn about the ethical and legal aspects of real estate.
Article Details
  • Written By: Terry Masters
  • Edited By: Shereen Skola
  • Last Modified Date: 29 June 2014
  • Copyright Protected:
    2003-2014
    Conjecture Corporation
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A commercial real estate broker's salary is based on a percentage of the total amount of the deal he brokers. These real estate professionals handle the rental and sale of space used by businesses, such as office space, retail stores and operating plants. Although the broker receives the commission as the licensed professional monitoring the transaction, he typically must split the commission with his agent, if one was used to do the actual legwork in structuring the deal.

Real estate leasing and sales usually involve brokers and agents. These professionals are hired by the landlord or seller to place his property on the market and show it to interested parties. The broker is the head professional who is licensed by the state to manage real estate sales transactions. Real estate agents work under the management of the broker and are usually the ones who meet with buyers and attempt to close a deal. Since the brokerage is licensed to the broker, however, the money made through the business is paid to him, and he pays his agents in turn.

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Brokers and agents in the real estate industry are paid most often on commission. This means that these professionals only make money if they close deals for the sale or lease of property. By law, the broker is entitled to a percentage of the total amount of the sale or lease contract, up to a legal limit that is in effect in the jurisdiction. The exact amount is set in the service agreement between the broker and the landlord or seller who lists the property.

Clearly, the most important determining factors in a commercial real estate broker's salary are the size of the transactions that go to closing through his brokerage and the commission percentage he negotiates per contract. A sub-factor is the amount of the commission he agrees to pay over to the real estate agent working under him. The split can be tied to actual work done on the deal; a broker can set the split in favor of the agent, depending upon how the broker chooses to run his business.

There is another factor that can sometimes affect a commercial real estate broker's salary in some jurisdictions. Agents and brokers are representatives of the seller or landlord by law. Real estate professionals work closely with buyers and renters, however, and this relationship can sometimes lead to confusion regarding the agent's role. Some areas allow commercial real estate brokers to engage in dual agency where they represent both the seller and the buyer/renter. In this instance, the broker can receive a commission from both sides of the transaction.

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