How to Negotiate with a Realtor on Commission in NYC (2019) | Hauseit®
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How to Negotiate with a Realtor on Commission in NYC (2019) | Hauseit®

It’s much better to negotiate the listing agent commission vs the buyer agent commission because buyer agents represent 90% of all home buyers, which means you’ll want their full attention if you want your home to sell. It’s easier to convince a listing agent to take a haircut on their commission because of ancillary benefits from having a listing, such as enhanced branding and additional referral opportunities. What Is the Typical Realtor Commission? Realtors will always tell you that there is no standard commission that sellers must pay; however, in practice real estate commissions have always hovered around 5-6% of the sale price in the United States. Average commission rates are no different if you’re selling in high priced metropolitan areas like NYC or the San Francisco Bay area. This means Realtors in NYC make ten times more money than their cousins out in the country. Why Do Realtors Quote 6% as a Commission Rate? Realtors quote 6% as a commission rate because the market rate buyer agent’s fee is 3%, and most MLS broker associations require listing agents to co-broke at least half of the commission with cooperating brokers, i.e. buyers’ agents. Can You Negotiate the Listing Agent Commission? Yes, negotiating the listing broker’s commission is the most prudent path because doing so will not affect your ability to attract the attention of buyers’ agents. The listing broker; however, may be open to taking a reduction in their fee as there are ancillary benefits from having an exclusive listing. For example, an exclusive listing gives a broker additional branding and referral opportunities, perhaps even from neighbors who contact them to sell their properties after seeing the listing. A listing can also be useful from a recruitment perspective. Having more listings gives the appearance of having more going on, and that can be useful from a recruiting perspective. Should You Negotiate the Buyer Agent Fee? Don’t negotiate too hard on the buyer agent’s fee because buyers’ agents represent roughly 90% of all home buyers. Since it’s critical to attract the attention and cooperation of buyers’ agents, it’s not a good idea to offer too low of a commission on the MLS to them. If you have a property worth more than roughly $1,000,000 then you can consider co-broking only 2.5% to buyers’ agents. However, if you have a property worth substantially less than $1 million, you should consider sticking with a full 3% co-broke to buyers’ agents to attract their full attention. Negotiating Commission for Dual Agency Even though many of the larger franchises may not approve of any haircuts in commission, you may get lucky and have some of them agree to reduce the commission marginally for dual agency situations. Dual agency simply means the listing agent will get to represent both the buyer and the seller, and as a result will be able to collect both sides of the commission.

One Comment

  • camila torales

    Very interesting, definitely did not know that you could negotiate the buyer agent fee and seller agent fee separately. It had always been presented to me as just one rate, 6%, that I had to pay. Given the choice, obviously I would choose to save on the listing agent fee, but still offer a market rate commission to buy side agents.

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