As others said, commissions are negotiable. Usually, a developer/seller would interview a few realtors and sign up with one that seems to be the best for the job and who offers the best terms. True, realtors can be making higher commissions on more expensive sales, however- developers are also making more money there. So they are working as a team and it should be structured in such a way that it is beneficial to both of them.
Krystyna Rachtan, Licensed Real Estate Broker
Phone (212) 991-8072
NEW YORK HOME REAL ESTATE SERVICES, INC.
295 Madison Avenue, 12fl, New York, NY 10017
Just make sure when you hire an agent both you and the agent have a clear understanding of what the goal and process of selling these properties are, what is expected from each other, and that you both feel comfortable with the commission. The least that you want is someone who is unhappy with their pay working for you.
A $25m home property would be located in an area where most expenses would also be higher such as office rent; vice versa with a $200k property
$25m even at 1% commission would be chump change for most agents but it would be a couple years worth of commission where I am.
Please remember they are paying for pictures of the home video, advertising costs and so much more.... we have to pay ad costs each month our homes are for sale on the market, along all the running of clients to the home, open houses., and we split that % with the selling agents.... it adds up and if an agent is good at what they do, they will get the home sold for you and earn that paycheck! If they aren't then the home won't always sell and it will sit... high end properties take more to sell then lower end ones do.
You need to be realistic Realtors have a significantly better chance of selling 50 $500,000 homes in a year than 1- $25,000,000 home. In addition the listing agent is going to be working for a very demanding seller (you) and as I've already pointed out may go a year or more between sales.
Let me ask you do you want buyers and Realtors hammering on you regarding your profit margins? Do you lower them when you build in this range or do you raise them to account for the development and sales time that you anticipate? Don't be penny wise and dollar foolish, and recognize that if you want a good long term productive relationship with the Realtor community, then stop worrying about their commission. You may also want to remember that the commission get's split between the Realtor and their company and that Realtors are self employed we pay all our own marketing fees, cover all our own overhead, pay all our own taxes, are solely responsible for our retirement accounts, (no 401K's in this industry) etc etc. The truth is over half of your estimated $625,000 will disappear leaving the broker with a net closer to $250,000 which to me isn't much if I were living in Manhattan where you say you're looking to build.
I sincerely believe you're focus open the amount of the commission on a single sale is somewhat myopic and isn't serving you well.
--Take longer to sell
--Need more advertising
--Are more difficult to sell because of a smaller buyer pool.
And you think commissions are not justified?
Just because you can't envision it in your own mind does not mean they are not deserving.
If you're selling to a high-end clientele. I recommend reading Dan Kennedy's No BS Marketing to the Affluent. I know it changed my entire philosophy on marketing and it might just change yours too.
Accredited Buyer Representative
William Raveis Legends Realty group
Then take the other part that you know and make it work for you.
That other part is, "All real estate professional fees are negotiable."
Pick up the phone, call the nearest Remax REALTOR and negotiate.
The outcome just might surprise you.
Will anyone tell you in a public forum?
Of course not. And you know that.
Here is the rest:
I can't see how one could justify that kind of a payout, regardless of the amount of time and effort spend in marketing and selling the property.
Are there any realtors out there willing to break out of the mold, and accept either a reduced percentage commission, an hourly fee, or a flat-rate payment?