Selling commercial property: Who pays the broker's commission?

You have a commercial property that you would like to sell with the help of an estate agent. The broker's commission is due. Who pays this commission: you as the seller or the buyer?

As a rule, the commission sum is divided between the buyer and the seller, since the broker takes the interests of both parties into account when mediating. If these interests diverge, an estate agent can usually reach an agreement that satisfies both contracting parties.

However, there is also the possibility of pass-on: this means that either the seller or the buyer pays the entire commission.

I will tell you when this makes sense in this article.

Situation for passing on to sellers: buyer incentive for hard-to-sell properties

If your property for sale is located in a remote area or was built for a specific industry use, this limits the amount of interested parties. For example, if you offer a holiday hotel, it is hardly suitable for other uses due to the specific fixtures and fittings.

In this case, it may make sense for you as a seller to pay the full commission amount of 6 per cent in order to receive attractive purchase offers.

Passing on to the seller: What amount is involved?

How high the amount is depends on the value and the sales price achieved. But to give you something tangible, I would like to calculate the commission with an example:

An office space with 270 square metres in the Innsbruck-Land area with good transport connections costs about 700,000 euros.

6 percent of the purchase price = purchase price * 0.06

If you sell your commercial property for 700,000 euros, you will incur 42,000 euros in brokerage commission.

Ifyou, as the seller of a property that is difficult to sell, now pay the agent's commission for the increased marketing and brokerage effort, your property will be offered to the outside world without a buyer's commission. This makes your commercial property more interesting for several buyers.

Another advantage of passing it on to the seller: You can thus ensure that the broker does not act as a double broker and only acts in your interest. According to § 5 of the Brokerage Act, a broker is not obliged to act only in the interest of the client due to the deviating business use.

However: Currently there is a high demand for real estate, but only few offers. Therefore, a real estate agent will take care from the outset to enforce your wishes when selling .

Situation of passing on to buyers: securing attractive properties

It is of course also possible to pass on the commission to the buyer. As a rule, the buyer pays the entire broker's commission if there are many interested parties for a property for sale.

Especially in the high-price province of Tyrol, there are many attractive locations for commercial properties. If one is for sale, potential buyers line up within a very short time.

Sellers of an attractive property do not want to pay a commission. For a well-located property, a prospective buyer will certainly be willing to pay the desired price plus broker.

This means: If a buyer wants to purchase a well-off property, he will - willy-nilly - have to pay the entire brokerage commission.

Conclusion: Passing on to the seller is currently unlikely

Due to the current seller-driven situation on the Tyrolean real estate market, it will hardly be necessary to pass on the costs to the seller. The demand for commercial properties and halls is particularly high - especially in attractive locations.

Even without paying the entire brokerage commission, a broker will represent your interests when selling your commercial property. This may sound a bit harsh for buyers, but it is simply the current reality.

As an exception, I see properties that are difficult to broker - such as (holiday) hotels: Here, as a seller, you can consider passing on the broker's commission in order to possibly sell a hard-to-sell commercial property at a profit after all.

Do you have a commercial property for sale and would like the support of an experienced Tyrolean estate agent? Please contact us for a free initial appointment, during which we will take a close look at your property for sale and your situation.

We help you find interested parties and support you in the sale. You can reach us by phone(+43 512 580 242), via e-mail or by using our contact form.

With kind regards

Yours, Bernhard Großruck

Photo: Gorodenkoff - stock.adobe.com