We are often asked the question, “what does it cost to sell my Multifamily?” While, real estate commissions are part of the equation, there are several other costs you need to be aware of. A typical sale cost for an owner will include Broker Commission, Tax Stamps, Mortgage discharge fees, and Attorney fees. The Tax Stamps, mortgage discharge fee, and attorney fees are fairly standard costs, however the commission is your largest and most variable cost so that’s what I will focus on.
There is no set rate for a brokerage commission, it’s all negotiable, however there are industry standards. Currently, in the Boston Marketplace, average total commissions are just over 5%. Keep in mind that this is the total commission which is typically split equally between the buyer’s and seller’s agent. The average commission holds true for properties in value up to about $3mm dollars in value and then things begin to change. When selling larger properties, there tends to be an inverse relationship with the commission percentage. The actual percentage of sale charged as the commission is completely negotiable between the seller and seller’s agent and is directly dependent on the type of property and location. For example, it would not be uncommon for a $5mm dollar A-grade asset in downtown Boston to sell for a commission rate of 3% total. On the other hand, the same priced asset, in poor condition, in a secondary market, would still demand a larger commission of 4 or 5 %. Why the difference? Well it really comes down to exposure and incentive. While all properties listed by Charlesgate Multifamily receive our full-fledged marketing efforts, cooperating agents are still a vital piece of the puzzle and often times they need to be further incentivized to bring their clients out of their normal comfort zone. So if you have a property outside of the city and you are trying to attract maximum exposure and interest, a great way to do that is to offer a higher commission thus incentivization more brokers to look at the deal, educate themselves on this new market, and in turn sell their clients on your property.