sales commission in a Bull market?

What neighborhood? What price point?

Our broker at Elliman said sales over 1 million have a 5% commission. If the buyer does not have a broker, that's reduced to 4%.

Talk to multiple listing agents, and tell them up front you're only going to pay 5%. Plenty of good brokers will do 5%, so there's no need to do more.

Everything is negotiable so as previously noted, speak with multiple agents. Even if a listing is < $1 million you can find agents under 6%. I sometimes do a 2/3 split (3% to buy side broker) to get as much exposure as possible for my clients.

interview three brokers, let them each know that you're interviewing others, ask them what their marketing plans are, get a sense of their sales style, and then tell them that you're price sensitive, and ask them what their fees would be.

ali r
DG Neary Realty

Then ask them all for their best and final

post an open AD, 1% commission tons of brokers rush to you

>Then ask them all for their best and final

Now that was funny.

why are agents still asking for 5 and 6 % on sales above 2m,prices in nyc have increased 5 fold in past 20years and amount paid in selling commissions is absurd .

jelj13

about 6 hours ago

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Our broker at Elliman said sales over 1 million have a 5% commission. If the buyer does not have a broker, that's reduced to 4%.

that's because your broker is a weak pussy. you want a weak pussy repping your property?

MidTownWGeek

about 6 hours ago

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Talk to multiple listing agents, and tell them up front you're only going to pay 5%. Plenty of good brokers will do 5%, so there's no need to do more.

except other brokers will show standard commission listings first

mjpayo

28 minutes ago

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why are agents still asking for 5 and 6 % on sales above 2m,prices in nyc have increased 5 fold in past 20years and amount paid in selling commissions is absurd .

i thought streeteasy was supposed to take care of that and eliminate brokerage?

Seriously - how is selling a $2 MM home in NYC worth $120K, that is more than most Americans make in a year. Major inefficiency in the market that is unsustainable

yet is sustained. what explains this?

>Seriously - how is selling a $2 MM home in NYC worth $120K, that is more than most Americans make in a year. Major inefficiency in the market that is unsustainable

If you are benchmarking to the amount that the average American makes per year, shouldn't you start with the average valued home, not a $2mm apartment?

Selling a home in a high cost area requires no more work or skill than selling in a more moderately priced area. As prices increase commission rate should decrease ,that's the way it works in money management business. Entry into the world of selling real estate requires breathing,no logic behind paying 150k to sell 3m apartment.

>Entry into the world of selling real estate requires breathing,no logic behind paying 150k to sell 3m apartment.

Maybe we should regulate the industry. You know, to protect those sad ignorant incompetent people who own $3MM homes and who apparently can't decide for themselves the value of having an agent represent them.

Great idea ,I agree regulation is needed

Rich people need regulation to protect them from people in an industry that "requires breathing". Sad incompetent rich people ... imagine if they encountered fish who don't require breathing, what then?

Many rich people have skills that afford them opportunity to make a lot of money however have limited financial or business skills,there are countless celebrities who have earned tens of millions of dollars only to claim bankruptcy. Real estate sales industry does need regulation

poor incompetent mjpayo

Owners are free to sell themselves if they do not want to pay 5 percent.

>Owners are free to sell themselves if they do not want to pay 5 percent.

No, we need government involvement to help rich people.

I feel for you greensdales ,you have no value proposition .you have not once detailed why you deserve to be paid 150k to arrange,sale of a 3m property ,you have only criticized those looking to pay a fair amount for a job well done. Get a life ,loser

I agree with greensdale and 300_mercer - sell it yourself, no one is forcing you to pay for a broker to sell your apartment. If you were having an open debate forum as to why there is value in selling with a broker to pay a 5% commission but because you started with the point of a baby making a tyrant, shut up and once again, sell it yourself.

mjpayo, your shadow is following you ... run

http://streeteasy.com/nyc/talk/discussion/35823-riverhouse-one-rockefeller-park

> why are agents still asking for 5 and 6 % on sales above 2m,prices in nyc have increased 5 fold in past 20years and amount paid in selling commissions is absurd

Let's say prices are up 5x as you claim, and let's say that piece is not absurd. How are RE agents supposed to earn enough money to afford a place to live? Don't they need 5x the commissions just to be able to afford the same place?

First of all, the business is very competitive. The broker who sells that $3 million listing may only have one other sale that year. We are entitled to make a living. If you did not need skill every seller would be an fsbo. Therefore more than breathing is required.

> We are entitled to make a living.

Actually, you aren't entitled to anything. For that matter, neither am I.

In an unusual move, I'm coming down on the side of the brokers here.

All things being equal, it takes just as much work to market and sell a #300,000 home as it does a $3,000,000 home. Why should the commission be lower on the more expensive home? Because someone arbitrarily thinks the commission would be "too much" money?

How much is "too much"?

>Why should the commission be lower on the more expensive home? Because someone arbitrarily thinks the commission would be "too much" money?

The rich are subsidizing the less well off home seller. That doesn't seem fair. Rich people should get government regulation to protect themselves from breathing brokers.

5% is 5%. Period.

Go play with SE's Find a Broker tool to get a sense of how it works. Like many businesses that're relatively easy to get into, it's extremely tough to make a living.

E.g., of the thousands of brokers working the UWS, fewer than 200 had two or more co-op closings in the last year. Another 400-odd had only one. Very few had more than three.

I didn't check for condos, since new development would skew the numbers, but it's probably the same story there and for commercial real estate.

inonada
about 13 hours ago
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> why are agents still asking for 5 and 6 % on sales above 2m,prices in nyc have increased 5 fold in past 20years and amount paid in selling commissions is absurd

Let's say prices are up 5x as you claim, and let's say that piece is not absurd. How are RE agents supposed to earn enough money to afford a place to live? Don't they need 5x the commissions just to be able to afford the same place?

Inonada ,the pseudo - analyst who fancies itself to be really sharp once again writes something really dumb. Would this great financial whiz argue that travel agent commissions should have kept up at the same rate so they could afford the same housing, even after the Internet revolution. Inonada lacks the analytical skills one expects in an analyst at a major firm. Period.

what is a major firm?

inoitall made a very similar sarcastic point to my own.

I never said a real estate agent should not be compensated, I believe they should charge less than 5 percent on a 3m sale. 20 years ago the commission on a mutual fund Sale was 8 percent regardless of amount invested, 15 years ago it was 5.5percent again with no regard to amount invested
. 10 years ago breakpoints were introduced which reduced commission with size of ticket phasing out commission paid at 1m invested. I can tell you that no financial advisor would turn down large tickets because commission rate decreased with amount invested .something similar should occur in real estate business. The problem is that the firms will hire as many agent's as possible because they don't pay a salary so yes competition for deals is intense yet they still push for 6 percent commission. i do believe there are plenty of talented ethical agents who do add value and are worth paying for. My last apartment I sold for 150k more than suggested by the 2 agents I had interviewed .yes it was 2009 and business may have been slow however they were pricing for quick sale and putting their interests ahead of their clients although i clearly stated i was in no rush to sell.on the other hand I had a good experience using an agent to sell a house I owned in sagaponack.

The RE industry is very proud of its inefficiency. There are 27K brokers for 10K annual sales. Maybe a bunch of the 27K are on-the-side. But just the top three brokerage houses employ about 6000. Even assuming just 5000 truly-active brokers, that's 4 transactions per year per broker. One buy or sell every 3 months on average. At 10K active brokers, one every 6 months on average.

The brokerage industry seems to be mighty proud of such state of affairs. If commissions were lower, I'd guess that the average broker would still make the same amount because there'd be less brokers. But I'd guess the top brokers would make less.

Take a top team like Eklund-Gomes doing $250M in sales / $5M in commissions. They are crunching away quite hard, probably something like 2 deals a week. After all that, having reached the top of their profession, they are "only" earning something like $1.5M each. Fine money no doubt, but compare that to top people in other professions. Enough money to afford a very nice $6M apt, but barely. And this is a top agent, maybe 10 like them in the industry.

Now you come along and say "Let's cut the commissions in half.". That leaves top-10 broker with "only" $750K in income. Enough to afford a $3M apt, slightly higher than the average $2.5M apt he/she is selling which is not even a top-10% apt. Something is ironic about that. No wonder they fight it tooth and nail.

BTW, Vanguard has been around for nearly 40 years now. And I think you'll find that the finance industry has had no trouble keeping up with its share of assets for a variety of reasons despite the general drop in commissions.

FWIW, while their is no viable alternative to a sell-side fee of 5%, you can drop it to 3.33% by using Keith Burkhardt on the buy-side to rebate 2/3rds of his 2.5% share. It involves doing much of the leg work yourself, but it is a viable alternative.

>I believe they should charge less than 5 percent on a 3m sale.

Do you believe that or do you want that? They charge what they can. Notwithstanding the lousy strategy of a anti-industry propaganda campaign run by one anonymous person on a message board, you are working to have it reduced for you which is everyone's right.

>i do believe there are plenty of talented ethical agents who do add value and are worth paying for.

Well there you go.

> they were pricing for quick sale and putting their interests ahead of their clients although i clearly stated i was in no rush to sell

You are the only person who signs the sale contract on your side of the transaction

>The RE industry is very proud of its inefficiency.
>The brokerage industry seems to be mighty proud of such state of affairs.

How did you determine they are proud? Maybe they are indifferent to the number of brokers?

> If commissions were lower, I'd guess that the average broker would still make the same amount because there'd be less brokers.

Well, ok. No one is forcing someone to enter and participate as a broker in the industry.

> But I'd guess the top brokers would make less.

As you can see right now, people are willing to pay, and probably are most interested to pay for the top brokers who have volume and have distribution.

>Now you come along and say "Let's ...

Who is the "us" in "let us"?

>FWIW, while their is no viable alternative to a sell-side fee of 5%

And why not? This thread cites industries including the financial / money management / brokerage industry, and the travel industry. Why is there no viable alternative to a sell-side fee of 5%?

A little bit of regulation would make the industry far more efficient: reduce the number of brokers/agents by 99% and the remaining 270 would make a respectable living on a 1% commission. And they'd do a better job.

A minimum wage law requiring agents to be paid even if they don't make any sales would help, since the big firms would quickly invest in better websites instead of more bodies.

Invisible hands only make everyone better off when they are guided by sensible background rules.

>> Why is there no viable alternative to a sell-side fee of 5%?

What's the viable alternative?

I'm asking, why is there no viable alternative?

>A little bit of regulation would make the industry far more efficient: reduce the number of brokers/agents by 99% and the remaining 270 would make a respectable living on a 1% commission. And they'd do a better job.

>A minimum wage law requiring agents to be paid even if they don't make any sales would help, since the big firms would quickly invest in better websites instead of more bodies.

>Invisible hands only make everyone better off when they are guided by sensible background rules.

In nature, if you have too many deer, eventually you have a combination of starvation and more killings by carnivores. And the numbers are reduced. Why do we need government to regulate the number and compensation of brokers? If brokers can't make a living, they'll move on to another career.

>> I'm asking, why is there no viable alternative?

You agree that there is no viable alternative?

I do no think people realize that the commission is split 4 ways. Listing agent, the company he/she works for, agent representing the buyer, and the company he/ she works for.

Fox tons with 2 percent commission shut down.

There are many buyers who do not use a broker with commission rebate model as they do need hand holding and mental support.

Charles rutenberg will take less commission but imagine how many people list their property with them.

At high-end, marketing and negotiation can swing the price by 10-20 percent ( as evident by above the ask closing and large discounts to asking price).

You can always try to sell yourselves but unless you offer at least 2.5 percent to the buyer's broker, you are missing out on a large pool of buyers who use a broker.

>I do no think people realize that the commission is split 4 ways. Listing agent, the company he/she works for, agent representing the buyer, and the company he/ she works for.

Disagree. It's split 2 ways. If I buy toothpaste, I don't consider the money split between Duane Reade and the clerk, and/or Proctor & Gamble and the employee on the manufacturing line.

>> I'm asking, why is there no viable alternative?

>You agree that there is no viable alternative?

And why not? Is it for lack of trying by entrepreneurs? Is it because not enough people want to be in the industry? Is it because the government mandates this structure? Is it because we don't have the technology or we have other high barriers to entry? Or is it because the value proposition is at current equilibrium with the market?

>Fox tons with 2 percent commission shut down.

So we had the application of technology in a modern market and entrepreneurship, but the value proposition wasn't sufficient to support it.

Of course there are alternate methods of compensating seller's brokers, or Doug Perlson wouldn't have a business. But just like with alternate methods of compensating buyer's brokers, not all customers want to go with a discount model, and not all customers want to go with a full-service model.

It's a big tent, and if you shop around I'm sure you can find what clicks for you.

ali r.
DG Neary Realty

>> And why not?

Don't know, don't care. You seem to care, so tell us.

You don't care but you are asking me to tell you?

Nada, when did you take Bellevue patient care responsibility?

look it's 300 Mercer who is sweating overstretching on his purchase.

>> You don't care but you are asking me to tell you?

You seem very eager to tell us. I was just trying to encourage you to speak up since you kept bringing it up.

I'm OK with you not telling us, whichever way you'd prefer.

So you were just asking in order to be polite?

>> Nada, when did you take Bellevue patient care responsibility?

I came into a large sum of money from a frivolous lawsuit, thought I'd pay my penance by devoting a fraction of my time to help others.

Don't know. Why were you asking?

front_porch said it all.

I'd say, if you don't want to f'ing pay, then don't. Nobody's forcing you.

If the state were to do more to restrict the supply of brokers, as it does with lawyers, other licensed professions, and taxis, there'd still be people whining about how they should be able to unilaterally set the price of other people's work.

Yup

"In nature, if you have too many deer... "

The industry is at a highly stable equilibrium. It is just an ugly one, much like the equilibrium deer find when there aren't enough carnivores: lots of animals at near starvation levels causing a great deal of damage to the ecosystem on which they depend. 2% brokers are driven out of business by fools who are working for less without realizing it.

"why do we need government..."
Without government, we have no real estate market, just gangs and gang brokers. See Somalia.

The question is, rather, whether we want sensible rules that lead to a sensible equilibrium or stupid rules that lead to an expensive and inefficient one.

We routinely shoot deer to improve the equilibrium. We can eliminate some brokers more humanely, by setting a minimum wage that will shift some of them into more productive professions. We can also set minimum standards that will limit market pressure to race to the bottom (e.g., add some consequences for lying).

The result would be better service at cheaper prices.

Or we can tell brokers and customers to suck it up within the current rules, like NWT and Greensdale. The status quo isn't killing anyone, even if customers and brokers alike are wasting time, money and energy that could be better used otherwise.

What career would you like to direct brokers to as an alternative?

We usually leave that to the individuals concerned. Are you not from the US or Europe?

So they can make a choice, but only after they are removed by government regulation from their first choice.

Real estate seems to enjoy a special status in that the industry is one of a few with its own dedicated section on the DoJ antitrust website.

http://www.justice.gov/atr/public/real_estate

An industry that gets state laws to ban broker rebates, refuses MLS access to brokers that don't do business the way they want, etc.

>gets state laws to ban broker rebates

Do you want more government regulation or less?

what a bunch of whiny pussies. the option exists for an owner to sell their home themselves. a quick search for fsbo listings on streeteasy shows how popular the option is. the option also exists to find a weak agent and have them try and sell your property for a substandard commission. that's probably pretty easy. of course the result won't be good. like most things in life, quality costs money and you get what you you pay for.

oh yeah, and the fabulous discount broker keith burkhardt....listing machine that he is with his discount platform has zero listings.

be on the lookout for some of my patented higher than standard commissions for sellers who want to maximize exposure by ensuring that buyers brokers bring their customers to view the property

Jim you have a patent leather shoe?

should be a flat fee of $2000 selling a home, no matter what house it is

>> oh yeah, and the fabulous discount broker keith burkhardt....listing machine that he is with his discount platform has zero listings.

His business model isn't sell-side, you dope. While you're off hustling for rental commissions at $2K a pop, he's kicking back and letting the buyers do what they do anyways: perusing & visiting listings w/o him. Then when it comes to actually buy, he'll spend the 20 hours for the offer, negotiations, and closing. Collects his $20K on a $2M sale, then goes back to chilling.

inonada

27 minutes ago

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>> oh yeah, and the fabulous discount broker keith burkhardt....listing machine that he is with his discount platform has zero listings.

His business model isn't sell-side, you dope. While you're off hustling for rental commissions at $2K a pop, he's kicking back and letting the buyers do what they do anyways: perusing & visiting listings w/o him. Then when it comes to actually buy, he'll spend the 20 hours for the offer, negotiations, and closing. Collects his $20K on a $2M sale, then goes back to chilling.

his business model isn't sell side because no one with a brain in their head will give him a listing. he barely seems open for business. his business model is flawed and doomed to fail, if it hasn't already.

sticks to stocks big boy. this is a real estate board.

also, explain (if you can) the virtual lack of fsbo listings on streeteasy. years I have been hearing the same bitching from you losers and nothing has changed.

I really don't care if there is 27K brokers, or whatever the amount is. Maybe that is because it doesn't take many credentials to get in the business - and yes, I realize some brokers are much better than others, and there is skill involved, but making $150K on one sale is ridiculous. How many hours did that broker work on that sale? Lets consider the skillsets required, and ask yourself where else those skill sets can make over $1,000 per hour.

As far as the inefficiency lasting, I guarantee there has been continued pressure on those commmissions, and it is not going to stop. Keep fighting on message boards brokers, but it is inevitable that these commissions will decrease

You are one dumb POS.

Did I ever say I gave a crap about commissions? Can you see how I said "no viable alternative to a sell-side fee"?

dcorreale

13 minutes ago

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I really don't care if there is 27K brokers, or whatever the amount is. Maybe that is because it doesn't take many credentials to get in the business - and yes, I realize some brokers are much better than others, and there is skill involved, but making $150K on one sale is ridiculous. How many hours did that broker work on that sale? Lets consider the skillsets required, and ask yourself where else those skill sets can make over $1,000 per hour.

As far as the inefficiency lasting, I guarantee there has been continued pressure on those commmissions, and it is not going to stop. Keep fighting on message boards brokers, but it is inevitable that these commissions will decrease

again, you have the option of trying if yourself, or using a weak broker. quit bitching.

and when is this change going to occur? look back to conversations here from three years ago. same old same old.

inonada

11 minutes ago

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You are one dumb POS.

Did I ever say I gave a crap about commissions? Can you see how I said "no viable alternative to a sell-side fee"?

i am not dumb, i just couldnt give less of a shit about what you write and didn't pay any attention. your just another loser on a discussion board who thinks you know everything.

inoitall, normally you do a better job of keeping your composure. What's happening recently? This morning is nearing C0lumbiaC0unty meltdown levels, this weekend seemed to be a preview of it, and the past couple weeks have shown bouts of indecipherability in your statements.

because it must be exhausing to try and convince everyone that:

a: you are smarter than they are
b: you are a financial genius with no peer (except w67)
c: everyone who owns their home is stupid, everyone who rents is not
d: the crash you predicted four years ago really is going to happen. just not yet.
e: everyone you don't like on streeteasy is hfscomm

So you interrupt a discussion to attribute random crap to people for no reason?

Fredo Corleone: I'm smart! Not like everybody says! Like, dumb. I'm smart, and I want respect!

Well, at least you didn't disagree with "POS".

Gd, how does it feel? Being rightfully ignored?

>Gd, how does it feel? Being rightfully ignored?

Who is being ignored?

F: also exhausting to try and be witty and anecdotal with multiple internet nemesis'

GasMan, where did you end up on commission?