Tenant Representation -Commissions
March 14, 2021
Realtors are commission-based
As a Realtor, I am paid a commission after your successful signing of the lease on a rental home. Because it takes days, weeks, and sometimes months of search, showings, and negotiations to achieve a signed lease, the minimum commission that I aim to receive from each lease is $1,000 of 1-time payment. This amount goes to my brokerage (Keller Williams Central), and I receive a portion of this money in terms of my actual compensation.
Who pays my commission
- For those properties that appear in MLS (and in your personalized portal that I set up for you) the landlord pays both agents (his own and yours).
- For those properties that do not appear in MLS (for example, some homes are For Rent By Owner), the landlords offer zero compensation to the tenant’s agent.
Size of the commission vary
For those properties that are in MLS, Each landlord decides individually how much to pay to the tenant’s agent. Some offer $200, and some offer $1,200.
How this affects your search
To make my services free to you, upon the start of our research we will agree that I will forward to your portal only those properties where the landlord provides tenant agent commission of $1,000 or more (and there are thousands of properties that provide this compensation)
!!! Therefore, for those homes that I send to your portal with no additional comments, you won’t need to pay my commission. The landlord will pay enough to fit my minimum commission criteria!!!
Situations in which you may decide to pay part of my minimum commission
As a result of the shortage of rental inventory in the DFW, many landlords are inundated with applications, making them less willing to pay a large commission to the tenants’ realtor. This is especially common for hard-to-find properties such as homes with pools, homes with acreage, homes that allow horses, homes that have RV parking, and more.
Also, the landlords are becoming more picky about credit scores. Right now, sometimes it is easier for me to get some people approved for a mortgage than for a rental.
Therefore, there might be times when it makes sense to you to decide to pay me a part of my minimum commission so that I could help you to visit and negotiate more properties. This could make sense to you if you have a short time frame for finding a new home, and the speed of the research is more important to you than having free Realtor services.
Here are some of the situation in which my clients usually find it appealing to help to pay part of my minimum compensation:
- For hard-to-find rental properties such as homes with pools, homes with acreage, homes with horses allowed, and homes with other attributes that make them rare and hard to get into
- For situations in which the applicant’s credit history, rental history, or other circumstances make it more difficult for them to be accepted into a rental property in the current situation of the growing shortage of inventory
- For situations in which the renter wants to receive special accommodations from the landlord (such as permission to have a large number of pets, for example)
Example of a partial pay of my minimum commission
For most cases, my minimum commission is $1,000. If you agree to provide a partial commission compensation, it could look like this:
The property monthly rent is $2,000
The landlord agrees to pay 25% of the 1st-month rent (which equals $500) as my compensation
You and I decide that you wish to go see the property and you agree to pay the difference between the landlord’s compensation and my minimum commission. This will mean that you are agreeing to pay $1,000-$500=$500 as my commission.
I will help you visit the property and to negotiate a lease. Upon signing of the lease, the landlord will pay me his agreed amount and you will pay yours.
How to avoid paying commission
If you wish to avoid paying commission, ask me to show you only those properties in which the landlord pays my full minimum commission.
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