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What do I need to know about broker fees?

Broker fees are charges that brokers collect for facilitating transactions between buyers and sellers, most commonly in real estate, finance, and investment markets. These fees compensate brokers for their expertise, access to markets, and the services they provide throughout the transaction process.

Note that Janover Pro does not charge any kind of brokerage fee. If you're a broker (or working with a broker) however, it's worth understanding how it all works.

Types of Broker Fees

  1. Flat Fees – A set amount charged regardless of the transaction value.
  2. Percentage-Based Fees – A fee based on a percentage of the transaction amount. This is common in real estate and investment deals.
  3. Commission-Based – A broker earns a commission only if the transaction is successfully completed.
  4. Hourly Fees or Retainers – In some cases, brokers may charge hourly for consulting or retainers for ongoing services.

How to Define the Broker Fee?

Broker fees can vary widely depending on the industry, the complexity of the transaction, and the value the broker brings. Some key factors that influence how broker fees are defined include:

  • The size and type of the deal
  • Market standards or industry norms
  • The broker’s level of involvement and responsibilities
  • Negotiation between the broker and the client

In many cases, broker fees are agreed upon upfront in a contract. Transparency is essential, so be sure to have a conversation with the lender or your client on your own to make that final decision.