Having come to the US from the UK, I was shiocked to discover that realtors could get awway with charging 6% to sell a property. The norm in the UK is closer to 1-2%. I understand that in the case of co-ops, where realtors can play a role in helping bidders through the Board review process, higher fees may be justified - but 6% strikes me as exhorbitant. Furthermore, it strikes me peculiar that... [more]
Having come to the US from the UK, I was shiocked to discover that realtors could get awway with charging 6% to sell a property. The norm in the UK is closer to 1-2%.
I understand that in the case of co-ops, where realtors can play a role in helping bidders through the Board review process, higher fees may be justified - but 6% strikes me as exhorbitant. Furthermore, it strikes me peculiar that just because prices have doubled in the last 5 years or so, one should pay a constant 6%, and thus double the amount, to a realtor for an identiacl amount of work.
Can anyone enlighten me as to what service one actually gets for the money (since it is actually the lawyer that will do the crucuial paperwork). And does anyone have experience of lower-fee realtors, or in selling their property by themselves.
No sniping from realtors, please - I'm just asking a question.
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Response by anonymous
almost 19 years ago
Posts: 8501
Member since: Feb 2006
I sold my manhattan apartment without a broker and saved a bundle. Most Manhattan apartments are a commodity and you'd be crazy to pay a 6% commission on when you could sell yourself through the new york times.
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Response by anonymous
almost 19 years ago
Posts: 8501
Member since: Feb 2006
I think there is room out there to get most realtors down to 5%, but that is still too high. I think it may be appropriate for lower priced places (e.g., $500K) because work is done to sell a place and I think it is barely worth a broker's time to sell a place for half of $25K on a $500K deal. But, I do not think that selling a $1M apartment is that much more work and to warrant a $50K fee. Same deal as prices go up. A $2M place cannot take twice the effort to sell as a $1M, and four times the effort as a %500K place. There should be a sliding scale that decreases significantly as the price of the property goes up.
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Response by anonymous
almost 19 years ago
Posts: 8501
Member since: Feb 2006
I think brokers should use a tip jar, we pay them what we think there service has been worth.
Also I think a 2 bedroom should sell for no more than 150K. :0)
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Response by emilyl
almost 19 years ago
Posts: 4
Member since: Aug 2006
6% is standard, but as others noted you can go the FSBO (for sale by owner) route and sell the place yourself, you just have to be prepared to do the legwork yourself. The only hitch might be if you have a luxury property - it is difficult to go FSBO on apartments selling for over $1mm because the buyer's broker will balk. Incidentally, I've noticed an uptick in FSBO listings in the past several months, including one or two above the $1mm mark, which is intersting.
I sold my manhattan apartment without a broker and saved a bundle. Most Manhattan apartments are a commodity and you'd be crazy to pay a 6% commission on when you could sell yourself through the new york times.
I think there is room out there to get most realtors down to 5%, but that is still too high. I think it may be appropriate for lower priced places (e.g., $500K) because work is done to sell a place and I think it is barely worth a broker's time to sell a place for half of $25K on a $500K deal. But, I do not think that selling a $1M apartment is that much more work and to warrant a $50K fee. Same deal as prices go up. A $2M place cannot take twice the effort to sell as a $1M, and four times the effort as a %500K place. There should be a sliding scale that decreases significantly as the price of the property goes up.
I think brokers should use a tip jar, we pay them what we think there service has been worth.
Also I think a 2 bedroom should sell for no more than 150K. :0)
6% is standard, but as others noted you can go the FSBO (for sale by owner) route and sell the place yourself, you just have to be prepared to do the legwork yourself. The only hitch might be if you have a luxury property - it is difficult to go FSBO on apartments selling for over $1mm because the buyer's broker will balk. Incidentally, I've noticed an uptick in FSBO listings in the past several months, including one or two above the $1mm mark, which is intersting.