How much are typical broker fees?
Because we get inquiries from school operators around the country, we frequently are explaining to those operators what fees we receive for completing client transactions. In those conversations, we are typically told by these owners that they have heard or been told by others that brokerage firms in our industry charge from 8% to 10% of the total transaction price, and if those percentages apply to Bailey Routzong then they would not be interested in using our services.
Well, charging 8% to 10% on Bailey Routzong’s average transaction price is simply WRONG! We have seen situations where local brokers in an area do charge such fees, but Bailey Routzong simply does not. Of course, there can be a situation where the total value of a transaction is so modest that larger percentages of the transaction price become more reasonable as a fee.
What Bailey Routzong Charges
Bailey Routzong always attempts to be transparent with our owner contacts as to the compensation we receive in completing a transaction, and below is our typical fee schedule depending on the dollar volume of a completed transaction involving both the school business and related real estate.
|Total Transaction Value||BR Fee Percentage|
|$15,000,000 – $24,999,999||4.50%|
|$5,000,000 – $14,999,999||5.00%|
|Less than $5,000,000||Call for a quote|
Of course, our fees are not based on hourly billings like an attorney or CPA, as we only earn what are called “success fees”; i.e. meaning we only get paid when a client’s sale transaction is completed. If a transaction were not completed, Bailey Routzong receives “zero” and is not reimbursed for its expenses in working on that intended transaction over a several-month period. (Fortunately, this has only occurred a couple of times in our 28 years!)
Finally, Bailey Routzong has always taken the position that our transaction fees actually cost our clients very little if at all.
Why? It’s very simple. Bailey Routzong’s proven ability to generate for our clients prices above Fair Market Value almost always washes out or exceeds the fee we receive! We believe that the hundreds of owners and transactions over our 28 years is the best evidence of the value that our clients see in Bailey Routzong’s representation.