Reasonable Seller's Brokers Fee in Hot Market?

6% by themselves.

Just get three brokers in to pitch and ask the question, "I'm very price sensitive, what's the best commission deal you will cut?"

and then see what they say

ali r
DG Neary Realty

Commissions are always negotiable by law, but brokerage firms don't have to accept a rate they feel is too low for their business to make the money they want.

So they might (or might not) decline to accept your listing if the commission you want is too low for them. The agents who live in your building may (or may not) have restrictions as to what they can accept.

A listing agreement is an employment contract. So, that would be like someone refusing to take a job because the pay is too low.

In this market with so few homes for sale, I'm finding it certainly doesn't take much advertising to get a lot of market attention. By contrast, in a buyer's market, people worry that a low commission rate might discourage buyer's agents from bringing their clients to your listing, or may not pay enough to support a strong marketing campaign. I personally don't think there's much to worry about there for most properties.

My brokerage firm (like some others) allows individual agents to work for any commission rate they agree to, so I've worked at a wide variety of commission rates. If you're open to being represented by an agent who does not live in your building, you can write to me at kharby [at] crrnyc.com

sell it yourself, save 6% - or, throw your $$$ away

I don't think it should be hard to say, whoever gives me 5% commission, 4% if there is no buyer's broker gets the listing. You might even be able to do better.

I don't understand why buyers brokers in NYC avoid "By Owner" listings even if there is a 3% commission.

Can any buyers broker working for a big brokerage tell me the guidance they receive on 'by owner' listings?

"I don't understand why buyers brokers in NYC avoid "By Owner" listings even if there is a 3% commission."

I've read this as well and scratched my head at it.. i've heard it's to discourage fsbo momentum by owners which would hurt the broker community in the long run.. sounds like bs to me though given brokers would take any commission (hey, i would) given how saturated there industry is..

.. maybe other brokers can enlighten us as the 'real' reason, if any other.

>"I don't understand why buyers brokers in NYC avoid "By Owner" listings even if there is a 3% commission."

If I were a buyer's broker, I'd probably think, this seller's doing all this work just to save 3% commission, why bother wasting my and my client's time with him? From brokers POV, it probably means extra work and dealing with a novice. From the broker's client's POV, he's probably not saving any money because I bet the PITA seller raised his prices as part of his delusions and will be difficult to get to a real negotiable price.

Plus the open house is awkward. Imagine you end up having to meet Yikes/Wbottom early in the process. Life is too short.

My impression is that fsbo's who do their listings and photos and comp sheets very professionally get interest. Were I doing just a buy side commission, I'd probably get all that stuff done in top notch form and personally contact a number of buy side brokers (who ideally deal in my price range) and invite them to bring clients, with a lot of clarity about what I'd be doing for the transaction, what I'd ask of them, and what they'd be paid for their part. It seems to me that a lot of people just throw up poorly taken photos on the New York Times and assume people will come rolling in. If you want to represent your own place, do it as well as an agency would. Maybe brokers really do boycott those sales, but there aren't enough of them to pose much threat from what I've seen.

If you're a buyers broker there is no reason to not take your buyer to a FSBO who is paying a buy side commission.

Here's a good one: http://streeteasy.com/nyc/sale/985239-coop-315-east-65th-street-lenox-hill-new-york

There's another one in the same building, where the owner's upstate rather than in Reno, and you might get to actually see the place, and don't have to buy the tatty furniture too.

Well, I have been told by buyers brokers from two of the largest brokerages in NYC that they, by rule, will not take a client to a by owner listing. I got the impression that this was not because of bad experiences in the past. My takeaway from my own FSBO experience is that brokers want to protect their industry.

For me, I don't care about professional pictures/weird furniture, etc as I just care about 3 things - location, floor plan with accurate square footage and building financials. I was in the market to buy and I found using broker was not useful for someone already living in NYC (I can understand the utility if you are out of state, etc). Also, I do prefer dealing directly with owners as they seem to be more responsive and honest (although a small sample)

Hi New Yawker -

I am an Associate Broker in NYC and can understand and appreciate your dilemma. Over the last 14 years in the business I have worked with many sellers quite a few who started as FSBO's. There is an argument for any commission point.

What is challenging I think going into the sales process as a seller is understanding what you are getting for the commission you are paying, and for many owners or buyers, their impression of brokering either comes from a past experience, or I suppose today, TV. Also as a seller, obviously one controllable part of the New York process is what you agree to pay in commissions - as that is a fixed number, in what is otherwise a 2-6 month experience of floating variables which can be extremely stressful at times.

The question becomes - even in a seller's market - is the 1 or 2% perceived savings upfront really going to translate into more in your bottom line at the closing table? There is a basic assumption that a) all brokers are equal and b) apartments sell themselves - so the broker can be incidental to the process. Yes, sometimes. But the reality is that WHO you choose to sell your home, actually can and will make an impact on the final sales price you receive, how long your apartment stays on the market, how well it is received when it is listed by the market, dependent on a) broker marketing skills, b) negotiating skills c) relationships with other brokers and how they handle buyers and their brokers once they are in your place d) their ability to professionally manage a multiple bid situation - keep everyone in the game until your contract is signed and generate both the highest price and the most qualified buyer for your apartment (especially if a co-op).

Hurdles to closing lately have included
a) low appraisals (sometimes by 50-100K even on lower priced properties) given appraisers can't keep pace with the market
b) bank's or boards failing to deliver approvals rapidly enough causing buyers to lose financing and have to start over
c) attorneys picking apart deals causing costs to rise
d) buyers walking away from an acccepted multiple bid and the other buyers not being handled well enough to have stayed in the game

e) Poor Marketing - It is easy in a seller's market to assume that 'everything sells!" Not true. I am seeing apartments go off the market that were priced too high, poorly staged and marketed without selling.

Sometimes a broker will offer lower when you ask "will you take X%" and you'll feel good in that moment because you perceive you got a "discount". But at what potential cost to your final sale price?

However, while you may believe you are "saving $15,000" how the marketing, response times to other agents or buyers, and negotiations and post contract process are handled will affect your final closing price perhaps more than you may know going into it upfront. Those are all the variables, which is why I think seller's focus on commission, negotiating or deal handling skills could cost you much more in your final price.

Not saying all brokers who discount fees are not skilled. But it's worth thinking about more than just the upfront %. In a poor negotiation 20,000 can go out the window in a two-minute call. Where did the savings disappear to? The final price is not fixed until it's negotiated and I can assure you no two negotiations or negotiators are the same in the business. :-)

Questions you may wish to ask in addition to Will you take X percent are:
How do you handle each step of this process, and what is your experience in this area, success rate, closing ratio (closed deals vs. exclusives) and your closed sales price vs. last asking price ratio on your last 20 deals? And what are the average days on the market for your listings in the last year.

These questions along with how well you and the broker can communicate together for several months or more, may give you a much clearer picture of who will be the best agent to hire.

It's not always the 'building specialist' or the 'super's favorite" - like residents who can't believe how much their properties have gone up, sometimes brokers who have great experience and track records will raise property values in a building they've never worked because they take the time to fully research the area, property and unit and use fresh information vs. just sort of "list and hope" at some random % raise based on a last sale or two.

Whatever you do, don't accept a "list and hope for the best" strategy from anyone, regardless what they are willing to take as a commission. I've learned one thing in 27 years in New Yawk - a lot of times we get what we pay for. I'm all for negotiating, but I just thought this may be helpful to you and others - There are many different brokers with different skill sets in this city. Understanding that will help you ask the best questions and find the right broker.

Because in the end it's the final net price you walk away from the closing table with that is most important right? I know this was long, but wanted to provide you with answers to the question you asked in a way that hopefully is helpful.

Best,

Tony Sargent