Who pays real estate commision if leasing (Austin, Howe: sales, leasing agent) - Texas (TX) - City-Data Forum

schmidt29 · 10-03-2007, 01:06 PM

Sorry if this has been asked already. If I lease a house working with a real estate agent, who pays the agent's commission, renter or landlord? Any idea how much it is?

jwb123 · 10-03-2007, 01:23 PM

The landlord/property management company pays it ONLY IF they state they will do so. Most will, but some won't - so make sure your agent gets it writing, or added to the lease.

I think when we first moved here, and leased initially - our agent got pennies. Maybe $300 or give or take.

austin-steve · 10-03-2007, 01:24 PM

If you work with a Realtor, or a locator company, who finds listings for you through the MLS, a leasing commission will be paid by the listing agent. It generally won't cost you anything out of pocket.

There's a lot more to it than that, but in most instances, you pay nothing.

Steve

austin-steve · 10-03-2007, 01:29 PM

Quote:

I think when we first moved here, and leased initially - our agent got pennies. Maybe $300 or give or take.

Most MLS listings offer 30% of the monthly rent amount to the leasing agent, who then has to split it with their Broker. It's a very unprofitable activity for agents, but many do it when getting started in the business or to "fill the cracks" when they are slow.

The biggest reason an agent does leasing though is to establish a relationship with you with the hope that you'll buy a house in a year or two using them as your Buyer Agent. So, it's somewhat of a "loss leader" activity.

I do know one full time leasing Realtor who has made a living doing it for over 10 years in Austin, but she mostly lists properties for lease and doesn't drive people around anymore.

jwb123 · 10-03-2007, 01:31 PM

Yeah, she wasn't doing it to make money, for sure. She has known my sister forever, so it was just to help us out. It was way more hassle to her than it was worth (bad property manager/realtor that she had to deal with).

schmidt29 · 10-03-2007, 01:37 PM

Quote:

Originally Posted by austin-steve

Most MLS listings offer 30% of the monthly rent amount to the leasing agent, who then has to split it with their Broker. It's a very unprofitable activity for agents, but many do it when getting started in the business or to "fill the cracks" when they are slow.

The biggest reason an agent does leasing though is to establish a relationship with you with the hope that you'll buy a house in a year or two using them as your Buyer Agent. So, it's somewhat of a "loss leader" activity.

I do know one full time leasing Realtor who has made a living doing it for over 10 years in Austin, but she mostly lists properties for lease and doesn't drive people around anymore.

Thanks a lot austin-steve, great and to-the-point reply!

Jennykitty · 02-11-2009, 11:36 AM

Is it normal to pay a Broker - leasing agent 6% of the total term of the lease for them leasing out 2 spots in a small 2 story commercial building that I own, and I am 1 of the 3 tenants? That seems a little high as I only paid 5% when I sold my house 2 years ago and we are in a recession. Also is it normal to have to pay this fee in full at the time the new tenant signs the contract? I have not signed the contract yet however notice there is a section under the part 1 of the Brokers Fee that is left blank, assuming if you agree to something other than a percentage, such as 1 month rent goes to broker. Any input from anyone is sincerely appreciated as I am new at the Landlord title as my late husband use to handle it and this is the first time in 6 years I have had to worry about the tenant vacancy and leasing issue. Thank you in advance.

TexasHorseLady · 02-11-2009, 11:41 AM

The listing agent gets a commission. They then split that with the tenants' agent, if the tenant has one. It's based on the rent, of course, not on a sales price, and is either a portion of the first month's rent (in some cases 100%) if the agent only rents the property out, or, if the agent is also managing the property, a large portion of the first month's rent plus a small portion of each month's rent (for fielding the 2 a.m. emergency calls and getting repairs done, having make-ready done when someone moves out, checking for damage when someone moves out, handling the deposit and return of it legally, etc.).

When we were using a property management company for our rental property (I was not yet an agent then and we live 40 miles from the city it's in), they charged 8% of the monthly rent, they were reasonable, and it was well worth it. They also charged about 60% of the first month's rent.

However, it was not paid up front. It was paid at the time of receipt (that is, they received the rent for us and forwarded us our 92%).

Jennykitty · 02-26-2009, 08:42 AM

Thank you so much for the reply. I manage the property myself and have since my late husband passed away 5 years ago. I just need help with negotiating the renewal lease and now a new lease once we rent it out to a new tenant.
Just found yesterday that the downstairs tenant, beauty shop owner, moved all her stuff out as she had until the 28th to vacate, but unfortunately she also took the 3 built in shampoo bowls and 3 custom wall cabinets that were above each shampoo bowl. These fixtures were mounted to the wall and physically attached to the property and the lease states that it is the property of the Landlord. These items were here when the previous beauty shop tenant started the beauty shop in 1995 and the existing tenant rented it out in 2003. Even if she upgraded or altered the premises it is still the property of the Landlord. The lease states this. I had the realtor send her a certified letter stating that we are aware of the missing items and per the lease, she is in default unless she puts them back prior to the 28th.
Otherwise I have the right to deduct the costs of replacing and the labor to install them from her deposit.

I do have a question if you know this, the Commercial vinyl tile flooring in the beauty shop definetly has probably 40 or so tiles that need replacing. She has been in the shop for 6 years and I know had a water heater bust and flooded, which I believe is what caused damage to some of the tiles, which I will have to replace prior to a new tenant leasing. Prior to her starting a lease 6 years ago, it was only vacant 30 days, and during that 30 days my late husband had to replace 45 of the tiles, have the floors stripped and waxed as the prior tenant did not maintain it or clean it properly and he deducted this from her rent. Before this tenant moved out she mentioned to the Real Estate agent that some of the tiles were loose but they were like that when she moved in. I do not believe that for a second as I found his paid invoices and a box of tiles has 50 and he only used 45 and paid the costs of having someone install them. I know Rick also repaired holes from nails in the wall and repainted the place, plus replaced 45 tiles and stripped and waxed the floors and only deducted $390 from her deposit, which was very low. Would not make sense that he would leave the floor unfinished for the new tenant, plus she never said anything about the floor on either of her 3 lease agreements.

Will she have an argument once I deduct these costs from her deposit after all she has done? I hope not.

Thank you again

Jenny

atxcio · 02-26-2009, 12:05 PM

Quote:

Originally Posted by Jennykitty

Will she have an argument once I deduct these costs from her deposit after all she has done? I hope not.

Thank you again

Jenny

I've been a landlord for a while, and I highly doubt you will have any trouble with deducting these non-typical wear and tear items from her deposit. Given that she removed fixed items that were not hers, she is likely not expecting any deposit back.

Just itemize what you are deducting as best you can, keep receipts and document. Did she fill in a move-in condition form?