Commercial Real Estate Brokerage and Lenders

Real estate brokerage is a business where real estate brokers earn commission by helping people to purchase, rent, sell or lease or finance properties. The main objective of real estate brokerages is to market real estate property in support of their clients.

In many countries including the United States, the real estate brokers help the sellers in publicizing their property and sell them at high prices under the most convenient terms. In order to be a real estate broker, one needs to attain a license and sign with a brokerage firm.

Any kind of real estate services offered without a license is considered to be illegal. However, if the buyers and sellers are the ones involved in the sale or the buying of real estate, they do not need a license for that. In some cases, lawyers are be engaged to view the sales for payment and they don't require to be licensed as brokers.

Agency Relationship with Clients

A broker will usually provide a typical full-time brokerage relationship based upon commission through a signed listing contract with a seller or he can sign a "buyer representation" agreement with a buyer and hence forms an agency relationship. Thus the buyer or the seller becomes a client of the broker.

In residential deals, agency relationship requires the officially authorized representation by a broker in support of the real estate brokerage or company of the principal. In this way, the broker can become the official agent of the principal.

Non-Agency Relationships with Customers

Non-agency relationships do not require any written contract or a fiduciary relationship. The broker starts working with the principal, who then becomes the customer of the broker. Without signing with the Buyer Agency's contract with a broker, when a buyer purchases a property, that broker becomes the sub-agent of the seller's broker. When the sellers wish to associate with transaction brokers, it does not give rise to any kind of agency relationships.

Brokerage commission

In order to find a contenting buyer for a particular property often the brokerage charges an amount of cash after the service has been accomplished. Typically this commission is enjoyed by the brokers of the Brokerage and the sum of money is determined upon certain factors.

These include the finding of a buyer for the real estate who is interested on purchasing the property, successful negotiations of the contract between the buyer and the seller regarding the purchase and the successful settlement of the cash transaction between the two interested parties. Usually the settlement of the cash transaction between the seller and the broker is done during the ending of the negotiation period as per mentioned in the listing agreement.

The commissions received from the real estate transactions are mostly negotiable and their amount ranges geographically. One good example could be North America where the real estate commissions can be bargained. This is due to the constant pressure under which the Real estate businesses have been over the years. Facts show that the average commission for the brokers has declined to 5% from 6% during the last decade in the United States.

A growing alternative commission structure shows the criteria such as flat-fee structure (a la carte), fee-for-service and fixed-fee that are relevant in the real estate commission. Results from the real estate trends reveals that the real estate brokerage services are now more prone to rely on other additional but innovative models in the recent times.

According to the Swanepoel report of 2007 the cost conscious customers of the present day are more sensitive to the price changes and the rising costs. As a result they are tend to explore new models such as the multi-level marketing, online real estate models, auctioneering or a la carte model.

The Development of the Real Estate Industry

The real estate brokerage industry has greatly evolved in the past 10 to 15 years. These drastic changes have helped to create a basic change in the ways that the homes and properties are bought and sold nowadays as well as the function of real estate agents that they play during these transactions. This has helped to evolve numerous real estate brokerage models.