What the commission actually costs
Commercial commissions are negotiable and vary widely by asset type and deal size, but on smaller transactions a few percent of the price is typical. The reason it is worth examining is simply scale: a few points on a seven-figure sale is a meaningful number, and it comes out of your proceeds at closing.
Illustrative comparison (not a quote)
- Listed sale at $1,550,000, less a 4% commission → about $1,488,000 before other costs
- Direct sale at $1,500,000, no commission → $1,500,000 before other costs
The listed sale produced a higher gross price and slightly lower net. Change the assumptions and the answer flips — which is exactly the point. Compare net proceeds and time to close, not headline price.
When a broker is worth the fee
It would be dishonest to argue a broker never earns their commission. A structured process with many qualified bidders tends to produce the strongest pricing on larger, stabilized, well-documented assets — the kind institutions compete over. If your property is that, and you are not in a hurry, running a full process is often the right decision.
When a direct sale wins
- Privacy matters. No public listing means tenants, employees, and competitors do not learn the property is for sale.
- The asset is small or specialized. Below a certain size, a full marketing process attracts a thin bidder pool anyway — you pay for process you do not get.
- There are condition or occupancy issues. A public process spotlights them; a direct buyer prices them and moves on.
- You want a specific timeline. Direct sales are usually measured in weeks rather than the months a listed process takes.
- You do not want showings. Especially with tenants in place, repeated tours are disruptive.
Protect yourself either way
Selling without a broker does not mean selling without professionals. Use a real estate attorney to paper the transaction, close through a title company, put earnest money and a defined diligence period in writing, and ask any buyer for proof of funds and a track record. Skipping the broker is a decision about marketing; it is not a reason to skip legal and title.
Questions worth asking any direct buyer
- How did you arrive at this number — can you show the math?
- What have you bought recently, and can you evidence it?
- Are you financing, and what happens if that falls through?
- What diligence do you need, and how long will it take?
- Are you buying it yourself, or assigning the contract to someone else?
A serious buyer answers all five without hesitation.
Want to see what a direct sale would net you?
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Frequently asked questions
- What does a commercial broker typically charge?
- Commissions vary by asset type, deal size, and market, and are always negotiable. On smaller commercial transactions a few percent of the sale price is common, with the rate generally compressing as deal size rises. On a $1.5 million sale, a few points is tens of thousands of dollars — which is why it is worth asking what the fee is buying.
- Is it legal to sell commercial property without a broker?
- Yes. There is no requirement to use a broker to sell property you own. You should still use a real estate attorney and a title company — that is about protecting the transaction, not about listing it.
- Won't I get a lower price without competitive bidding?
- Sometimes, and it is fair to say so plainly. A well-run marketing process with multiple qualified bidders can produce a higher gross price, particularly for larger, stabilized, institutional-quality assets. The honest comparison is net proceeds and certainty, not gross price alone — a direct sale carries no commission, fewer contingencies, and less time on market.
- What does a broker actually do for the fee?
- On a full process: prepare marketing materials, reach a wide buyer pool, run a structured bid process, screen buyers for capability, and manage the transaction through closing. That work has real value on larger assets. It matters less when the seller already knows their buyer, the asset is small, or privacy is the priority.
- When does a direct sale genuinely make more sense?
- When privacy matters, when the property has occupancy or condition issues that a public listing would highlight, when you want a specific closing timeline, when the asset is too small to attract a competitive process, or when you simply do not want months of showings and retrades.
- How do I know a direct buyer is real?
- Ask for proof of funds, ask what else they have bought and when, and ask them to explain how they arrived at their number. A credible buyer will show you the math. Put earnest money and a defined diligence period in writing, and close through a title company or attorney — never as a handshake deal.
- Can I talk to a direct buyer while my property is listed?
- That depends on your listing agreement, which may entitle the broker to a commission regardless of who finds the buyer. Read it, or have your attorney read it, before starting a parallel conversation.