Maureen it says that you are a home buyer. Are you asking to get an idea of how much commission a seller added to the listing price? Iâ€™m suspecting thatâ€™s why you are asking, or maybe you are thinking of selling your own property before purchasing another.
Like someone stated, each firm has their own commission structure, and most brokers have their own standards. Some will not work under 6%, others will take 3%. Marketing has gone up in price, and brokers are forced to spend more marketing money for longer listing periods. Believe it or not, a very large % of listings expire before they ever sell first time around. Sometimes brokers kill their own deals, other times itâ€™s sellers who donâ€™t understand the difference between what they â€œWANTâ€ for their property is not what â€œITâ€™S WORTHâ€ in todays market. Sooner or later they will realize and at that point nobody knows which way the market will swing.
90% of deals in New York are co-broked. Some sellers stay at whatever fee they agree upon, others want a different arrangement if that broker brings in a direct buyer. Most things can be negotiated if it makes sense for both parties.
Iâ€™ll tell you one thing. Larger the split, the more incentive that broker with his or her buyer has to show that sellers listing. REBNY plays it straight when it comes to splits. Whatever commission you have that listing under 5% or 6% and another agent brings in a buyer, we split it 50/50. No shady business, no I keep 3 and you take 2, or I keep 4% and you get 2%. Believe it or not some brokers pull that.
I think that with 90% of brokers, 100% of the time we do not walk away with the full commission. Whatever that seller and broker agree upon, that commission is divided between seller and his broker (firm), and it is taxed and budgeted for future marketing.
Hope that answers it.
It is worthwhile for the seller to pay a full SIX PERCENT as then the property will be given the greatest exposure, allowing other brokers to co-broke (i.e. share ) the listing. The day of 'pocketing listings' and showing only the listings from one's own firm are long gone. Every firm that is a member of the Real Estate Board of New York (REBNY) shares by law. REBNY is a governing agency for New York Realtors.
At the height of the market some sellers were offering SEVEN and EIGHT PERCENT commissions in Manhattan, for greater exposure and to draw in more brokers (and hence, more and higher offers!) I am happy to discuss my firm, Halstead Property Brooklyn's philosphy with you, Maureen, or any other sellers or buyers. email@example.com
A seller should pay a broker a fee in keeping with the value the broker will add to the transaction. The seller should judge the broker as you would judge anyone you are doing business with. There are a wide range of business models and it is wise to talk to a number of people to get a sense of what one will get with different companies. The final commission should be a reasonable number so the broker is motivated to work and that the seller is not sacrificing too much of the sale price. These days a key factor should be a broker who can produce a real buyer.
Alan Bernstein, Broker
Besides the actual commission rate which does vary there is another important factor to consider which is services provided.
A potential seller needs to understand the various services to be utilized to sell the home. In todays marketplace most brokerages go beyond the MLS , open houses and simple print ads. Look for an agent /broker who can get your property on as many real estate portals (Trulia, Zillow etc.) to maximize exposure to the homebuying audience. While many think print is dead there are instances where specific print advertising may be effective for the seller.
Social networking is rapidly becoming another imprtant marketing tool for real estate. Many buyers use these sites to seek out properties. Check to see if your broker/agent is using this new medium.
The seller needs to evaluate all the potential services being offered against the commission rate. You can almost always find a lower commission but the trade off can be poor marketing.
Bonnie and David
In today's market real estate has become a serious job where an agent works hard to sell s property.
Commissions vary from broker to broker and there is no set amount. As a matter of fact, it is illegal for brokers to discuss their fees with one another because it can be construed as price fixing which is illegal.
It would be my humble opinion that the rates you mentioned could be indicative of normal averages. I am curious, why is it that you ask?
If I can be of further assistance, please let me know. Good luck!
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665
Cellular: (917) 805-0783