160 Leroy Street
With supply being very tight is it fair ask listing broker to work for 5%?.. I believe it will sell quickly
Completely wrong. Most brokers will take 5%. Just ask.
if it will sell quickly, why not without a broker and save those 5%??
bb10024: It's probably more a function of the price than the broker. Above $2MM, many excellent brokers will do 5%. At lower price points, it's naturally tougher to get concessions.
Some brokers still draw a line at 6%. As far as I can tell, they aren't necessarily the best brokers - just the most concerned about diluting their brand.
Sorry but you are all wrong. I interviewed 6 brokers to sell one of our investment properties recently that was $600,000 and then I casually interviewed about 5 or 6 at open houses about possibly listing. Some were big shots and some were young newcomers -- ALL of them said they would gladly do 5%. My sample is about 12 for 12. Maybe that is too small but it sure tells me something.
Accepting a certain percentage has to do with the ATTITUDE of the broker,, taking into account parameters such as price and market (even though some major idiots think percentage paid is directly proportional to how "good" the listing broker is). bb10024, if you think it will sell quickly, why not do what switel suggests and do FSBO?
Sonya_D is exactly correct.
It's never a bad time to negotiate a lower commission.
If the inventory is so TIGHT, why not 3%? Less to compete with, more demand and a TIGHT supply, sounds like the brokers are getting a nice cushion given the market.
How about trying on your own with a professional photographer and streeteasy?
a flat fee of $3000 each transaction is more fair
Let me start off by saying that I am a Broker. I would advise 6% BECAUSE the market is tight. I know that sounds crazy but please let me explain.
Whenever I take a listing, the first thing I do is call every single Broker with a similar listing in the neighborhood. Then I call every Broker who has a listing under contract where I think they may have a seller that might be interested in my listing For example, if I have a Park Slope house for sale and see that a lot of Brooklyn Heights listing agents are doing a lot of buyer side deals in Park Slope, guess who I'm calling first. I do the same thing again with brokers who have listings that recently sold. These are the people who are most likely going to have motivated buyers. This usually takes me about 1-2 weeks for 3-4 hours a day before the first open house, but its the best way to make sure my listing is on the radar of the right people. Now hoe does this relate to commission? Well I'm glad you asked!
If my listing is 6%, those other agents are definitely going to bring their prospective buyers to my listing. If its 5%, they may, but the likelyhood isn't as high. In a tight market, if your agent gets all the of the right agents to see your home and they bring their buyer's by, it will make up for that 1% difference and then some! Unless you do this day in and day out, I can see how this might be tough to wrap your head around, but its the truth.
Doing 3% is utterly pointless. No Broker is going to bring their buyers to place if they only stand to make 1.5%.
You could go FSBO, but then you're just going to get tons of solicitation phone calls, and not as many strong buyers. FSBOs usually wait for their homes to get noticed. A good agents goes out there drags people to your place until one of them falls in love. You want to create a competitive atmosphere, and unless you're on the phone 4 hours a day, hunting down buyers, you'll probably net less than you would with an aggressive agent.
I hope that was helpful.
it's amazing how some people who claim to be "in the business" are so clueless about it (not to mention bad at their job).
Imagine how real estate would become liquid if there were no broker fees... It would only be 4% to buy and sell
Most brokers will take any listing at 5% as long as their brokerage allows them to do it (some have a $ 1 M threshold though) but it's important to know that buyer brokers as they are involved in most deals are pocketing half of the commission and they will always push more for a 6% listing because they'll get 3% instead of 2,5%, and this is especially true for cheap listings.
Bottom line, you can always get 5% but I thing that the extra 1% spent is definitely worth the extra attention.
why did you post as greensdale and then stop?
I started my company (RealDirect.com) because I felt the question shouldn't be "5 or 6%". What you pay should be more of a function of what you are getting - at least for the listing broker portion of the fee. We charge either a fixed monthly fee or a reduced commission if the seller is willing and able to show their own home. And if the seller wants us to do everything, we take a higher commission. Although our fees are generally fixed, we leave the "buyer" portion of the commission up to the seller. Since sellers are competing for buyers, we show them what their competition is offering, and let them decide. Usually it works out to 2.5% if over $1M and 3% if under.
I paid 4% because the buyer did not have a broker and the sale was over a million. A competing broker offered me 3% with/without the buyer having a broker. The hitch was that no photos would be shown in the ads for the apartment. These brokers were with very well known, huge firms.
jelf13.. can you share your broker?? i just bought a larger place (no broker used) but wanna use a 'flexible' broker for sell-side.. dankee
if you want a weak listing agent who isn't even strong enough to protect their commission, then sure, whey not? you could probably get someone who will take 4%
Has anyone actually done a study correlating Broker performance and the negotiated fee? Brokers will always pretend that the competition who accepts teh lower fee is not likely to do a good job. It's just a page out of their negotiating hand-book. You should negotiate the lowest fee you can and expect a good job.
@Riversider....no but there was a study that showed how long brokers own homes sat on the market(eg higher asking price) than their listings (which were priced to sell)......that should tell you enough.
bravo, jredon. I'm a broker as well and have accepted listings for 5% a few times in higher ranges when the seller seemed very stuck on this in order to list but is willing to price the property right for the local market. Sometimes I have been sorry - like when the property does not sell efficiently/has major transaction issues that take up a great deal of time and effort. So when you do get a buyer and *IF* things get complicated, do you want your agent to spend as much of their time as possible in order to navigate thru the issues well? At a 'discount' will you be getting the best exposure for your listing when you are offering the listing agent less $ incentive? If the property is priced well for what it is in the local market a seasoned agent will probably have a good handle on how quickly it may sell and if that sense is there that it should sell efficiently, then you will probably find one to accept that discount. If the seller is very budget-sensitive/cutting it close they should just understand that there may be less marketing/time/expense on the Brokers' part vs. a full 6% level of service. If its a competitive market for the particular property then a slightly discounted commission can work. Our market (edge of NJ/easton PA) has some pockets that are not as healthy as the NYC market - so out here if the property is NOT priced well for the market and seller is offering lower than 3% to buyer agents it can sit for a while showings can def. suffer... and as the Broker spends more and more on the marketing of it, the listing can get stale. Price and commission offered are an important element of the marketing mix that the seller can control - you do get more robust results from offering a full commission; your listing has an advantage over competing properties that are offering less $ incentive to brokers, especially brokers that provide a higher level of service and place more value on their own time.
Isn't that amazing that most brokers will shun a listing with less commission?? How can you say your buyer broker is looking out for your best interests when they secretly won't take their clients(you) to see a desirable apartment(one you may love) because the commission they will receive is less??? They make the buyer suffer and the buyer is so reliant on the broker they don't even know they are being abused this way. Buyers need to look for themselves and stop being manipulated this way. If the buyer broker feels the work is just too much for the less commsission then well that's just too bad.
ss400k: I used Elia Clemente from Douglas Elliman.
He's extremely easy to work with and VERY honest/ethical. He was very thorough on the packages for both our sale and purchase. He went above and beyond what he had to do. I recommended him to others who had the same positive experience.
why not offer 8% commission? Hell, 10% is even better.
Here are two articles that talk about commissions:
I recently represented a husband and wife I met on Trulia that was hesitant about using a buyers broker, they felt they could do most of the grunt work of touring open houses and searching online, but wanted my expertise when it came time to negotiate and assemble the co-op board application. In exchange I rebated them half my commission. They ended up purchasing for $875,000, seller paid 3% to me, at the closing they got a $13,125 rebate from me.
It worked extremely well and everyone walked away happy. I hold my license at Rutenberg Realty, if I were at one of the big box brokerages that take 40%, 50% or even 60% of my commission I couldn't have done this for these buyers.
I think there is a lot of downward pressure on broker commissions. The old model of brick and mortar offices with fancy furniture and flat screen TV's will become a thing of the past as savvy buyers and sellers realize it doesn't take a fancy office or website to sell or buy a place.
If buyer and sellers or property owners and tenants were able to negotiate directly without letting their emotions get in the way, then there would be no need for a real estate broker's service, but that will never happen, mainly because money is involved, and money makes ordinary people behave unpredictably.
The main functions of a broker (or co-operating brokers) involved in negotiating a sale or lease is to set up a screen between the principal parties, communicate the relevant facts, and allow the parties sufficient time for an appropriate response.
In addition, a good listing broker is usually one who has been actively involved in a host of negotiations at any given time over a period of years, which puts sellers who wish to go it alone at a distinct disadvantage with respect to obtaining the right value for their property or rental space simply because they do not possess this level of experience. If you want to enjoy the 'thrill' of selling it yourself, sell a TV or your old smart phone- where you would only stand to lose a few dollars, not your real estate where tens of thousands or even hundreds of thousands can be lost due to one's own ego.
If its the amount of the fee that bothers you most, this was not a number that appeared out of thin air one day. . .it evolved over a long period of time. Most owners are unaware that a listing salespeople must split their fee with the broker/owner of the business, and often times with another salesperson- if that salesperson locates the ultimate purchaser before the listing salesperson does. Additionally, in co-brokered sales, the fee is split between the 2 broker/owners and their respective salespersons. A 6% gross fee will generally net a listing salesperson 1.5 %, unless the sale/fee is not co-brokered and the listing agent located the buyer before another salesperson in his office did. Add to this the fact that property sales generally take 4 to 6 months to consummate and I am sure you will begin to understand the reason why brokers have to charge the fee they charge.
Believe it or not, whatever you do for a living, you can be assured that your employer is charging what he must charge to stay in business and make it a worthwhile venture.
In London commissions are 1-2% tops. One of the most sophisticated, cosmopolitan and coveted places on earth. NYC commissions are a complete charade. In a hot market especially eyeballs will come to you.
6% is outright offensive. there is a reason why the Economist in a recent story said real estate agents are most at risk for being replaced by technology. No doubt there will be countless suckers until then to believe the hype. Why be one of them? Think about it. 6%... An anachronism !!!!!
buyer...."I want to offer you $$ for your home" seller....."here is my counter" buyer...."lets meet in the middle" seller..."ok done"..................
Seller "here is my real estate attorney's number, please have your lawyer contact my lawyer, see u at the close"
and that my friends will save you $60,000 on a million dollar apt
"In London commissions are 1-2% tops."
So go buy in London then.
NYC won't miss you.
negotiating an apt sale is not remotely rocket science--and RE brokers aint exactly rocket scientists. last thing i want is a screen, erected by some dope, between me and counterparty to a deal.
especially given that dope has serious conflict of interest with me--last on his/her mind is getting me the best deal--foremost is to get the deal done/get paid.
value added from a RE broker is simply a myth.
they can key sherpa, if you need that, but the rest is of little, and potentially negative value. and in a hot low supply mkt, who needs even a key-sherpa. your lawyer is best consult for negotiation and most else.
and your lawyer's fiduciary is to you alone--his/her job is to keep you out of trouble--and s/he is comparatively cheap: couple 3 g's
Oh yay; content!
Charles how very Easter of you in that photo!
"So go buy in London then.
NYC won't miss you."
Trying to educate trolls like you that you are being fleeced. You work for the board of realtors or something? Didn't think so. They have high standards there. GSE equivalent "no degree loans".