Negotiate Commission down to 4% with List Broker?

Neighborhood? approximate value? Asking price in relation to expected value? Coop or condo? Your PITA factor? Your don't bother me factor? Your need to sell quickly?

I think a lot of listing brokers will talk to you about 5%, and you can bring that up at the interview.

4% is a fairly deep discount (yes fees are always negotiable) and I would think it would be politer to mention that before the interview if it's something you really need, because I imagine some listing brokers would flat out say no.

I think the real driver as to who would say "yes" to working for less money is an individual agent's business model -- will she say yes but then give much of the work to a lower-paid assistant? or will he say yes and do the work himself because your property is somehow a trophy to him? A broker who hasn't sold in Building X or Area X but wants to get into that niche is probably your best bet to work cheaply, I should think ... though of course you want to wary of the agents who are willing to work cheaply because they don't have any other work.

ali r.
DG Neary Realty

start at 5....then see what happens if and when you get an offer.

of course, listen to C0C0, SE's biggest fraudster. First get the deal, then afterwards reneg on the relationship and understanding you have with the broker.

C0C0 = being upfront and honest is bad

fieldschester.. answers follow..

Neighborhood? lincoln center
approximate value? 800kish
asking price in relation to expected value? 10% above recent comps, given low inventories & last comps sold a good amount above 2012 comps.
Coop or condo? latter
Your PITA factor? im slightly OCD but prefer to work with OCD types so net/net
Your don't bother me factor? i'm open baby
Your need to sell quickly? don't need to sell asap, but don't want the listing to go stale

were you being sarcastic with ur last advice from coco? wasn't sure as im sure they wouldn't reneg on terms after sale on a signed contract.

thanks ali, i'm thinking of going with a "smaller" unranked broker rather than a top 20 broker (per realdeal at least) who was open to do my deal just cause a) the smaller broker sold more in my particular building and b) my listing may be too small $-wise (less time spent?) for the larger broker.. who closes on $10mm plus deals..

ps what is standard clause with broker terms to sell - is it 6 month exclusive still? what if i ask for 3 month clause instead, in case they aren't what i'd thought and i need to get another broker in their asap. many thanks

I interviewed some brokers from very large firms. Some offered 5% if the sale is came in over 1 million. Some offered to discount 1% of the firm's going rate if the buyer did not have a broker. One broker offered 4% if no pictures were shown on the web or sales flyer of the inside of the apartment. All had standard agreements for 6 months, but some would change that to 3 months.

I sold my apartment within a week through a large, top 20 broker for more than I expected. Some of my neighbors started with small firms and switched to one of the large firms that knew the building well. There was one firm that some used that kept popping up during my own search. As a buyer, I found that this firm did not accurately represent the status of the properties and did really not know the buildings. It was as if all their brokers had other jobs, using the real estate for secondary income.

I did not go with the broker who offered the lowest fee. My feeling is that the property goes stale within 30 days so the initial presentation is key.

SS: That is just FB's schtick. Hilarious I know.

You need to understand that it is not like the 3% commission that each broker gets goes in their pockets. These are now massive corporations, so money gets split around. As such, there is less flexibility than you think.

Overall. You are being cheap. If you want to go FSBO in a hot market than that is understandable, but trying to same 1%; this is just being cheap. Call the agents who are most successful in your area and see what they have to say. Say you would like 5% and see what they say. But then pick the best agant who you are comfortable with and don't sweat the 1%. You get waht you pay for and this 1% discount is not worth it for you.

>SS: That is just FB's schtick. Hilarious I know.

C0C0 was telling him to be dishonest. That's not hilarious at all.

how big is the apartment as I could be potentially interested?

I dealt with the listed broker and was not represented by a buyer’s broker and got it at 4%. Although this was 30 months ago and the market was different, the concept is the same.

In typical deals using two brokers, they each get 3%. 4% is a 33% increase. Sure there is a little more work that the listing broker has to do but they are getting a lot more to do that. The fact the commissions really go the company and the broker only gets a part of that has nothing to do with this.

I’d recommend being very up front with the listing broker and say something like this, “I’m interested in making an offer but as you know, I represent myself and therefore my offer is contingent upon you accepting 4%”. Don’t make an offer until this is settled.

Before the broker gets the contract to sell the apartment there is usually a discussion with the seller that relates to this and often there may be language in the agreement stating what the commission paid to the broker by the seller would be under those circumstances.

This is how it’s done. Ignore the comments above that are posted by brokers they only want the easiest path to a transaction and that is by co-brokering. I’m not in real estate but I am in sales and I know a thing or two.

ss, this is not a deal I would want to pitch (I'm not particularly interested in focusing on Lincoln Center) but I do have a couple of thoughts for you if you want to write me or call me on my cell.

ali r.
ali [at] dgneary [dot] com

Generally the higher the dollar amount of the property, the more frequently this is done, regardless of seller or buyer market.
Especially in commercial.
A $4mm 3 bed, sure.
A $400K studio,eh.
But rather than get hung up on squeezing out a point from the broker, offer a ceiling price incentive instead, based on sold for price.
You wouldnt pay 6% if you got 5% above ask?

6 month agreements are terrible. 3 months is perfect but 4 months isnt awful.

The mantra from the big brokerage houses is that commission is not negotiable but that's not true.
Keep in mind individual agents with less experience and "weight" with their firm have a much harder time if at all to get a reduced commission okayed.

you get what you pay for

dont be cheep and expect full service, esp not for a 800K apt

ieb: The only problem with what you suggest is that if you tell the broker this up front, of course they will bake any supposed savings you are looking for into the deal. To be effective you have to negotiate your best deal then ask for the 2% haircut off the agreed price. This will most likely not work and also will piss off the listing agent, but it is the only way to realize true savings. You don't automatically benefit from demanding up front the broker take less than what their listing agreement calls for.

Keith Burkhardt
TBG

I am a licensed real estate broker with 35 yrs. experience-- so here's my opinion from a broker's point of view. Though it is a sellers market right now it is a mistake to try and negotiate a commission down to 4% total. 90% of the brokers will never show your apt as they would rather show/sell an apt that will pay the standard commission or no less then 5%. At 4% you are working against yourself plus giving the broker the impression that you will be very difficult to work with. Remember brokers do much more then just showing an apt. They negotiate, deal with the attorneys, do the board package and much more. They do earn there commission for sure. Best of luck to you in whatever you decide. If you have any questions feel free to contact me at pat@singernewyorkrealestate.com. SINGER NEW YORK REAL ESTATE. 212-570-6095.

"Standard commission" - who the hell sets the "standard"? Is it a law? A regulation? REBNA could say 8% is the new "standard", right?
I say, 4% or even less is the standard. It worked so far. Commission percent, per definition, is negotioable and not any kind of a standard. And REBNA is nothing but an extortionist.

Real Estate Board of New Amsterdam?

By comparison:
http://www.propertywire.com/news/europe/uk-estate-agent-fees-201201246041.html

Of course, they get paid in those giganticly enormous magazine-sized Sterling banknotes plus a guinea and a few spare shillings, and who would want to have to carry too many of those around?