Broker Commissions--how is it split?

Half to each broker, who in turn give half to each of their firms.

Does anyone know if the major firms are doing 5% for a property listed at over $1M and whether they will do 4% if the seller's broker does not have to split it with a buyer's broker? Thanks.

There is no such thing like "standard" commission by law.
There is no such thing like "standard" split either.

How can a seller's broker "not have to split it with a buyer's broker?"

Every member of the Real Estate Board of New York -- and that's little neighborhood firms like mine (DG Neary) to the big two of Corcoran and Elliman -- has agreed to co-broker as part of our REBNY membership.

The split doesn't have to be half -- a listing broker could write a contract at 5.5% that offers 2.0% to the co-broker, those terms are indeed always negotiated -- but I would think there's no REBNY member that could do the listing without offering something.

And since I think at this point around 75% to 80% of the sales in Manhattan go through that co-brokerage system, I would definitely advise going with a REBNY member.

ali r.
{downtown broker}

I'm not sure what you are asking here because I am not sure if you are a buyer or a seller.

As a seller, when you enter into a contract, it will specify the commission that will be paid the broker as well as to any buyer's broker. In the past, I have chosen not to scrimp on the commission paid to the buyer's broker since as a seller, I want all brokers in the city to want to work for me and bring me a buyer.

A common clause you can negotiate is that if your brokerage firm is on both sides of the deal, they will take say 5% total rather than 6%. This may even be in their standard contract.

Front_Porch: I would assume that starfish is referring to a tiered commission structure, wherein the seller pays (for example) 5% in the event of a co-broked deal, but (for example) 4% in the event of a direct deal.

The 4% scenario assumes there is no buyer's broker at all in the transaction - seller's broker brokers deal on their own. thanks.

oh I get it. Thanks nyg and starfish for the clarification.

The biggest problem with a tiered commission is that they make trying to manipulate a bidding war among several parties hairy, because you have to disclose to each party what your commission structure is -- the agent is essentially bound to tell the co-broker that the non-cobroked bids are 1.5% better on the commmission, but don't let that affect your best and final.

That said, I've certainly used a tiered commission to gain a listing. I would imagine that there are a number of firms, big and little, probably eager to compete on the price terms you've listed. Realize of course that as a seller, you have about an 80% chance of accepting a co-brokered offer (and paying 5%) and only about a 20% chance that your broker is actually going to bring in the buyer without someone else -- at least in Manhattan, those are roughly your odds.

ali r.
[downtown broker}