in difficult markets there is a mutual reward in incentivising brokers to find the appropriate tenant/buyer quickly. In certain markets,
performance incentive fees work while still having their advantages and disadvantages, along with the occasional discretionary
bonuses on top. The important thing is that there is openness and
full transparency from both broker and client when entering into an
Another area which varies across the globe is marketing costs.
Each market varies as to whether the costs are absorbed by the broker or directly by the client. In the U.K., these are transparent past
through costs, whereas in another market the broker is expected
to absorb and share the risk of key marketing initiatives, such as
advertising, web marketing, etc.
It is important to understand the backgrounds of the cultures.
The U.S. system is primarily a low or no salary system but high
commissions. In contrast, the European, and particularly the U.K.
model, is of a salary plus bonus and fee bonus system, which acts as
In conclusion, there are a variety of varying global fee structures
and customs that SIORs need to be aware of when dealing with
foreign acquaintances. This lack of standardization is a good thing.
The RICS took the advice of the Office of Fair Trading, and stopped
publishing guidelines on fees many years ago. More recently,
The Competition Act and intervention from various governments
around the world on anti-competitive issues make it impossible for
industries to standardize fees. This is healthy for business which
needs to be creative and align the value to client/ reward to service
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