A commercial real estate agent’s pay is different from most other jobs. There’s no salary involved most of the time, but agents instead work solely on commission. This means that while there’s no real cap to what an agent can make in a year, their livelihood depends directly on their ability to close deals. It can be a recipe for a “feast or famine” lifestyle.
The good news is, commercial properties can close for millions of dollars. And big sales mean big commissions. Read on to learn the answer to the question ” how much do commercial real estate agents make?” and how they can maximize their earnings by using ProspectNow.
How Much Do Commercial Real Estate Agents Make in Commission?
There are two ways to earn commission as a commercial real estate agent: property sales and lease transactions. The commission will also vary widely depending on the value of the property, agreed-upon rate, brokerage split, and the number of agents involved.
But if you’re looking for a ballpark estimate of what you can expect to make, here are some statistics:
- Agents who specialized in commercial properties made an average of $73,839 in 2019.
- That’s substantially higher than the average residential real estate agent’s income ($52,395)
- And nearly three times the average income of agents who don’t have a specialty at all. ($26,992)
But don’t expect to get your money all at once. Upon a property sale or lease transaction, commission is paid to a real estate broker first. It’s then the broker’s job to pay the agent, with their share of the commission taken out.
The first step in a transaction will be to agree upon a commission rate. Typically, it’s a percentage of the sale price, and this percentage tends to go down as property value goes up. For example, a property listed for less than a million can go for 6 to 8 percent commission, but a property listing for 20 million will have a 1 percent commission or less. But the good news is, the latter still means a check for up to $200 thousand dollars could be coming your way!
When it comes to leasing agreements, the commission is based on the total value of the lease. This commission is usually still paid in a lump sum, due when the lease is signed and security deposit paid. Sometimes there will be a structured payment agreement between the broker and landlord. In addition, agents are occasionally paid a reduced commission upon lease renewal.
There’s little in the way of regulating commission agreements and no standard commission rates per antitrust laws, so there are a number of ways that commission payment can be negotiated.
How Can Commercial Agents Maximize Their Earnings?
Using the ProspectNow platform, commercial agents have a strong advantage. We have the most complete database of commercial properties and owners, and data analytics to help boost your leads – all in one place for a low price.
The first step is to find commercial properties for sale, which is easily done. ProspectNow’s database has it all! There are over 38 million commercial properties in the database – some currently up for sale, and some designated “likely sellers” that aren’t yet listed but might go up for sale soon. But more on those likely sellers later! There are many ways to find commercial properties for sale, but the ProspectNow platform makes the first step and the following ones much easier.
Put A Name To A Property
Every property has an owner. Many times, it’s an individual. Finding out how to reach them is easy enough. But sometimes you’ll find a property owned by an LLC. In these cases, you’ll still want to look for an individual’s name to help increase your chances of making successful contact. How can you do this? Again, there are multiple ways of finding the owner of an LLC, and some of them complicated. Or you can log on to ProspectNow and get that name immediately. All of the contact information you need is gathered for you in one place.
With the same system, you’re able to find and contact the tenants of a commercial property. This can be useful if you’re looking for standalone businesses like fast-food restaurants.
Identify Likely Sellers Instantly
Off-market properties are an excellent opportunity to find great deals with minimal competition. These are properties that, for one reason or another, aren’t advertised. Perhaps the seller hasn’t yet listed the property, or doesn’t want the hassle of giving tours, or the property can be in the pre-foreclosure stage.
The challenge here is finding these properties without the aid of the listing, but it’s made easier with ProspectNow’s “likely seller” algorithm. This function makes use of data analytics and machine learning to spot characteristics of properties that are gearing up for sale. And because machine learning plays a role, the algorithm to identify these likely sellers only gets smarter with each week. These properties will show up in your leads lists with the “likely seller” badge to tip you off to their “not yet on the market” status.
Give yourself an advantage over other commercial real estate agents by using ProspectNow to spot off-market properties. You may be the lucky agent to reach these sellers first!
So, you have your list of leads. How do you contact them? Phone numbers are always readily available, but let’s say you’re too busy to call all fifty property owners on your list.
With ProspectNow, you send an email instead to every one of those fifty owners through the platform with one click. If that’s too impersonal for you, you can send physical postcards through the mail with your own name and contact information. The postcards are sent out for you with postage automatically deducted.
Not sure what to say? There are templates available for emails and postcards. But don’t worry so much about putting a script together when cold calling leads.
So how much do commercial real estate agents make? As much as they want. With commission-based earnings, the sky is the limit. ProspectNow has the tools to help you maximize those sales and your commission with ease.
Ready to close more deals and make more money? ProspectNow has helped agents do just that since 2008. We give you more data and unique analytics at a lower cost than competitors. Sign up for a free trial today.