What Is A Success Fee In Commercial Lending?

This questions deals with the fee being paid a
commercial mortgage broker when a loan closes with a
lender who was introduced to the borrower by a broker.

1. You first need to understand that these relationships are governed by “willing buyer, willing seller.” There are no governmental bodies which control fees for commercial mortgage brokerage. (There are a handful of states which require a commercial mortgage broker license, but to my knowledge these states do not control fees charged by the broker)

2. The success fee is controlled by the kind of transaction and the kind of real estate.

3. Conventional real estate transactions may have a success fee of 1 – 2% of the loan amount.

4. The other end of the lending spectrum are Bridge Loans.  These loans are usually Private Lender transactions and have success fees of 1 – 5% (to the broker) depending on the loan amount and the number of “points” the Lender is charging.

5. The best way to find out what the market will bare and what is “fare and reasonable” is to talk with several brokers.

6. Once you find a broker who you are comfortable with and who is reasonable, I suggest becoming exclusive with this broker as long as he does his job to your specifications.

A knowledgeable and competent broker is an important member of your team.


Call or email Joel Soforenko and go over your financing needs
617-336-3215 x 5