Commercial agent costs

[foliedouce]

I wondering if anyone with greater experience than me can help with this.

I have a commercial property currently an office, but has previously held planning for a cafe / takeaway.

Good riverside location, 1500 sq feet in purpose built 2009 development.

Does 15% of headline rent / 1.5% of sale price sound about right for the agency fee?

I'm currently reviewing my options with it.

Thanks

[anonymous-user]

I’m a commercial agent and we would typically charge 10-15% of headline rental for a lease or 1.5%’ish for a freehold disposal.

Varies by a number of different factors though.

[foliedouce]

Thanks for the quick response, its 11 years into a 999 year lease

I trust the agent as I've used him a number of times on different properties, first time 'selling' through him though, I've always been on the buy side before.

Geographically he's circa 100 miles from this property so given the current lockdown situation he's proposing that he engages with a local agent to fee split 60/40 in their favour. He would do the marketing / initial qualification from enquiries and they would do the viewings

I guess that's why it's a top end fee as it needs to be worth while for both parties.

Any thoughts?

Thanks

[Chrisgr31]

Trusting your agent is an important part of the deal. It's not my area of surveying so no idea on the fee buts I believe thats the ballpark area.

[anonymous-user]

foliedouce said:

Thanks for the quick response, its 11 years into a 999 year lease

I trust the agent as I've used him a number of times on different properties, first time 'selling' through him though, I've always been on the buy side before.

Geographically he's circa 100 miles from this property so given the current lockdown situation he's proposing that he engages with a local agent to fee split 60/40 in their favour. He would do the marketing / initial qualification from enquiries and they would do the viewings

I guess that's why it's a top end fee as it needs to be worth while for both parties.

Any thoughts?

Thanks

Good news reference the lease length, that’s one less thing to concern a potential buyer.

A fee split of the nature proposed is commonplace yes. You should establish from the off how the fee is structured (since a joint agent fee is typically higher than a sole agent fee).

Let me know if I can help at all.

[foliedouce]

JonnyJustice said:

foliedouce said:

Thanks for the quick response, its 11 years into a 999 year lease

I trust the agent as I've used him a number of times on different properties, first time 'selling' through him though, I've always been on the buy side before.

Geographically he's circa 100 miles from this property so given the current lockdown situation he's proposing that he engages with a local agent to fee split 60/40 in their favour. He would do the marketing / initial qualification from enquiries and they would do the viewings

I guess that's why it's a top end fee as it needs to be worth while for both parties.

Any thoughts?

Thanks

Good news reference the lease length, that’s one less thing to concern a potential buyer.

A fee split of the nature proposed is commonplace yes. You should establish from the off how the fee is structured (since a joint agent fee is typically higher than a sole agent fee).

Let me know if I can help at all.

Thanks. This property is in Bristol if you’re local?

[anonymous-user]

foliedouce said:

Thanks. This property is in Bristol if you’re local?

Sadly out of my patch otherwise would have been very happy to discuss. I’m Hampshire though. By all means ask any questions if you need advice.

[surveyor]

It sounds a bit high to me, and I don't see any extra value in involving a joint agent 100 miles away from a major market.

I'd recommend Cater Jonas in Bristol. I don't like recommending 'big agents', but in this case they have swallowed the niche practice that I would recommend.

I'd expect 10% LH / 1% FH by the way.

[Baldinho]

I'd recommend you speak to a few of the local Bristol agents initially for their thoughts on marketability, rental and capital values and potential upside of alternative uses (subject to planning and any restrictions in your head lease) and ask them for their track records in dealing with similar properties.

If the guy you regularly deal with isn't active in the Bristol market in all likelihood he won't know the curently active investors/tenants/planning situation.

Surveyor has given you good advice on fee levels - you're effectively paying a joint agency fee but only instructing one agent who will be subbing the donkey work out. Sole agency max fee is usually 10% letting and 1% sale + VAT. Max joint agency is 15% letting and 1.5% sale + VAT.

The lot size falls below the level where you'd get decent advice/service from the 'big' firms in terms of letting/sale but they may be useful in terms of initial planning advice.