If residential brokers get a commercial lead, they have a few options when it comes to handling the transaction.
They can be involved in the lease or sale, or give it completely to a commercial broker, often for a significant referral fee.
“Here, at a minimum they get 10 percent off the top. It could be a $100,000 referral fee just for handing over their card,” said Daren Hornig, president and CEO of Dwelling Quest, which has both residential and commercial divisions.
At Fillmore in Brooklyn, which is primarily residential but also has a commercial division, “the typical interoffice referral fee is 25 percent for doing nothing, and if there is a lot of involvement the fee can be 50 percent,” president John Reinhardt said.
Michael Forrest, executive managing director of CH Commercial, which is a part of Citi Habitats, said his company’s referral fees are “generous,” but didn’t provide a number.
“A commercial firm generally speaking will take a referral, but the residential agent who’s referring often loses control of the client,” he said.
“We have a referral system that allows residential agents to be partnered up with an experienced commercial broker who assists them in the transaction. Nearly 99 percent of the time the commercial person can lead the deal.”
There are plenty of opportunities for commercial leads out there for the residential agent. “We are training every residential agent to ask one more question,” Hornig said.