1. What is Commercial Real Estate Commission?

Commercial real estate commission is the fee paid to brokers for facilitating the sale or lease of commercial properties. In Texas, these commissions are typically negotiated between the broker and client rather than being fixed by law.

2. How Commission is Calculated in Texas

The standard commission calculation formula is:

Where:

• \( Sale\ Price \) — The final selling price of the commercial property
• \( Commission\ Rate \) — The agreed percentage rate (typically 4-6% in Texas)

Note: Commission rates can vary based on property type, transaction complexity, and broker agreement.

3. Typical Commission Rates

Texas Averages:

• Retail properties: 4-6%
• Office buildings: 4-6%
• Industrial properties: 4-6%
• Multi-family properties: 3-4%
• Land sales: 6-10%

4. Using This Calculator

Instructions: Enter the sale price in USD and the commission rate as a percentage (e.g., 5 for 5%). The calculator will compute the total commission amount.

5. Frequently Asked Questions (FAQ)

Q1: Are commercial commissions standardized in Texas?
A: No, all commissions are negotiable between the broker and client under Texas law.

Q2: Who pays the commission in Texas?
A: Typically the seller pays, but this is negotiable and should be specified in the listing agreement.

Q3: How is commission split between brokers?
A: The total commission is typically split between listing and selling brokers, often 50/50 unless otherwise agreed.

Q4: Are commissions taxable in Texas?
A: Yes, commissions are considered taxable income for the receiving broker.

Q5: Can commission rates be lower for very expensive properties?
A: Yes, rates often decrease on a sliding scale for high-value transactions (e.g., 4% on first $1M, 2% on amount above).