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reports. For example, if the regular reports of a real estate agent shall be made at the end of each month, and the amount of the monthly rentals shall approximate to the sum of five hundred dollars, the agreement with the agent may require him to pay over to the owner the sum of two hundred and fifty dollars on the fifteenth day of each month, and the balance of the rents at the times of the regular reports.

Whenever it shall become necessary to replace agents who have had charge of real estate by new ones, notices must be at once given to all tenants to discontinue payments of rents to the former agents and to pay the rents to the newly appointed agents until further notice.

It may be remarked, also, that the difficulties and delays which will be incident upon changes of real estate agents will be at their minima in cases in which owners have made it their business to make themselves personally acquainted with their tenants, at least to an extent sufficient to establish their identifications.

Commissions for the sale of real estate, for the leasing of improved real estate, and for the collection of rents, are usually in the form of percentages. If an agent shall sell a lot and building for ten thousand dollars, his commission, from the vendor of the real estate, will be a certain percentage upon that amount; if he shall negotiate a lease of a building for a term of ten years, at a rental of one thousand dollars per year, his commission will be a certain percentage upon the entire amount of the ten years' rent; and if he shall collect rentals amounting to a certain gross sum, his commission will be a certain percentage upon that sum.

With regard to all kinds of real estate commissions, prudent investors will take pains to have exact understandings with agents and brokers before the commissions shall be earned, for the excellent reason that such understandings will often be the means of preventing the charging of exorbitant commissions. It may well be added that there will be no impropriety in bargaining with real estate agents for the lowest rates of commissions which shall be consistent with proper performances of required duties, without regard to

any arrangements or rules which may have been made by real estate exchanges, or other associations of agents and brokers, for the maintenance of uniform rates of commissions.

In a case where the services of real estate brokers shall have been performed by a single person or firm, there can be no difficulty in determining the party to whom the commission shall be due; but, where there shall be several agents or brokers concerned in a single transaction, controversies as to which shall be entitled to the commission will often arise, and if the commission shall be paid to the wrong party, the investor may be put to the inconvenience of paying it a second time to the rightful party, without the possibility of recovering it from the wrongful one.

The deciding legal principle in such cases is that the agent or broker, who shall be the " efficient or procuring cause" of the particular transaction is entitled to the commission; and this principle, although somewhat unsatisfactory, cannot well be further elucidated in a work of this nature. If there shall be serious doubts in the mind of an investor, as to which agent or broker, in a particular transaction, actually was the procuring cause, all parties who may have claims to the commission, should be interviewed before the payment of the commission, with a view to an arrangement which shall be satisfactory to all parties; and if such an arrangement cannot be made, the investor must choose between the alternatives of consulting a lawyer and of taking the chances of a payment to the wrong person.

With respect to the regular commissions of real estate agents, for the general management of investment real estate, such as renting, the collection of rents, the making of repairs, and the exercising of the usual supervision, a simple and satisfactory arrangement seems to be that the agents shall perform all the regular duties; that they shall receive, as compensations, each month or quarter, agreed percentages of the gross amounts of rents which shall have been collected during the period; and that either party may terminate the agreement by giving certain notice to the other. Other arrangements are often made between investors and real estate

agents, but they will generally be open to objections which will not apply to the arrangement which has been suggested. Among such arrangements may be mentioned one which appears to be generally favored by agents-that of separating the commissions into a percentage for leasing and a percentage for the collecting of rents. This arrangement will have the disadvantage of compelling owners to pay commissions upon leases which, by dispossession, or the voluntary removal of the tenants, may be terminated before their proper expirations; it may also have a tendency to cause certain agents to lease the premises of their patrons to irresponsible tenants, and for longer terms than shall be satisfactory to the owners. Arrangements by which commissions shall be further separated by allowing agents certain percentages upon amounts which shall be expended under their supervisions in repairs, will offer objections which will be suffi ciently manifest to dispense with the necessity of further remarks concerning them.

The actual rates of percentages of commissions which are paid to real estate agents vary to such an extent that no specific figures can be given; the reasons for such variations will evidently be the differences between localities, the ease or difficulty with which different kinds of real estate can be rented and the rents collected, and the relative amounts of rentals from different properties. An owner who shall be possessed of a large amount of improved real estate, in the immediate vicinity of the real estate agents' places of business may reasonably expect to pay lower rates of commissions than one whose investment properties shall be small and at points which are remote from the offices of the agents; and so the owner of a large office building, which shall be continuously filled with prompt-paying tenants, may easily obtain first-class agents who will take charge of the real estate at low rates of commissions; while the owner of low class tenement houses, or other troublesome buildings, which shall be difficult to rent, and shall offer still greater difficulties to the prompt collection of the rents, will be obliged to pay high commissions in order to obtain satisfactory agents.

The business abilities and reputations of agents will also affect the rates of commissions (although apparently not to so great a degree as in other branches of business), capable and responsible agents naturally and properly requiring higher compensations than will suffice for those who are inexperienced and irresponsible.

With regard to the actual rate of commissions in each special case, a general rule only can be given, but it will be, it is believed, not entirely without practical value. Taking into considertaion the various elements which have been mentioned, and having ascertained as nearly as possible the prevailing actual rates of commissions in the particular neighborhood, and for the conditions of the particular property, the investor must, as in other cases of purchase and sale, make the best bargain which is possible under the circumstances, taking care that the rates, which shall finally be settled upon, shall not be higher than the prevailing rates, unless there shall be some distinct compensating advantage. The discussion of the remaining condition which is necessary for the return of fair and regular incomes from real estate, of the important subject of leases, and of the various considerations growing out of the relation of landlord and tenant, will be treated in a separate chapter, which follows the present one.

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WAVING obtained properly conditioned, and properly improved real estate for the purposes of investments, the question next in order will be concerning the best means by which the property shall be made to produce the required incomes; and the answer evidently must be, "by leasing the premises to satisfactory tenants."

This is the universal method of obtaining incomes from investments in real estate. We must, therefore, give to the subject the attention which its great importance plainly demands.

At the outset, an intimation that a careful study of the subject will prove to be profitable should not fail to be appreciated. Not every person who is possessed of real estate is competent to manage it to the best advantage; and the different results between a careless underestimation of the difficulties which are involved, and a faithful consideration of the difficulties, will often signify, on the one hand failure, and on the other hand success.

For the advantageous leasing of real estate, the character of the real estate itself being in all respects satisfactory (by reason of the correct application of the principles which have been already explained), the conditions may be conveniently stated as three, namely: leases must be properly drawn; the amounts of rentals must be sufficient, and their collection sure; and the characters of tenants, and the uses of premises must be satisfactory.

These conditions, although at first sight one may seem

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