Unethical, and a poor way to do business, but that's how it is!
I show my sellers how much is paid in the area. It runs from standard 6% on regular properties, goes higher to 7% for least expensive properties (45K and below), 10% for land and 8 to 10% on commercial properties. Properties that don't sell usually are those that pay less in commissions.
But, why are we not talking about what will be done to earn those commissions? I mean, the other part is easy: lower commissions = lower exposure & less marketing budget for the property.
The main point is that you got to get your top dollar for your property - with a good marketer-agent you'll get that accomplished, your bottom line will be much better off, even with the standard commission - because with more exposure you'll get more traffic, and more buyers will be competing for your property.
Have agents propose their marketing for you, hire the one that impresses you most - and you'll be happy you paid full commission - because you'll make the most money with the best agent who truly earns her commission! You can even pay a bonus if the agent (usually selling agent, not the listing agent) brings the buyer at certain high price - at the very least this attracts agents' attention.
Hope this helps,
Beachfront Realty, Inc.
Most important thing is that they are honest with you, work hard at REALLY marketing your property (not that "Oh we have millions of agents working for you via MLS" line they love to use), I mean really marketing your home! (magazines, internet, open houses, etc.)
You received good advice, but Iâ€™d like to elaborate just a bit.
A seller should always compare services side by side offered by both competing agents. Start with the basics.
Which websites will they advertise on? Assume that broker who brings the buyer may not be part of the MLS system, instead they may belong to REBNY (Real Estate Board of New York), such as myself, and unless you are advertising on Trulia, NYTimes, StreetEasy, and Zillow, I probably would never find your listing and therefor wouldnâ€™t bring my buyer to preview. Always check how they advertise, and how easy it would be for direct buyers to find YOUR apartment online. Some broker sites are so poorly constructed that it can take you 20 pages later to hopefully find what you need. In a day where people have minimal attention span, I doubt anyone would put up with this.
Also ask agents if they take professional photography, not with their smart phones or point and click cameraâ€™s. Which of the agent will write a seductive property description thatâ€™s SEO optimized instead of using broker jargon abbreviations which search engines ignore and buyers canâ€™t decipher. Will they offer a floor plan? I guarantee you that 7 out of 10 listings you pull up right now do not offer one.
Will they physically show your apartment, or will they have you show it to a sellers broker who knows nothing about your apartment or the building? In Brooklyn, this is a big trend, I know this because half of what I request to see I end up showing to my buyer directly. Personally I would never allow this if I was representing my seller.
With regards to commissions, while there is no such thing as set commission as all are negotiable, understand the following. The lower the commission the less incentive a broker has to bring their buyer to your apartment. Ask yourself the following. If you were a broker working with a buyer and you have two apples to sell him or her, two identical apples with identical terms. If you sell one youâ€™ll take home .75% minus taxes if you sell the other youâ€™ll take home between 1.25-1.50%, which do you know your buyer will see first?
Foxtons failed in New York, because there were no incentives for buyers brokers to bring them buyers. And when 90% of transactions taken place in this city rely on two brokers coming together, your marketing has to include this.
Let us know who you decide on.
Another part of the puzzle aside from commission size is to make sure that the listing is on the Brooklyn MLS (Multiple Listing Service) from day one. It decreases the chance that your agent will keep full commission (minus what goes to his or her broker), but it greatly increases the marketability of your property.
On the other hand, let's say that the agent you do NOT want to chose agrees to sell the house for 3%. If it gets set up without exposure to the MLS, and the agent refuses to co-broke - the actual sale may take much longer to take place, and the selling price might be lower as well. Go, Bensonhurst!
As Anna notes, commissions are negotiable. But recognize, too, that there are some discount agents and some higher-commission agents. Sometimes (not always) you get more services from the higher-commission agents. So ask not just about the commission but also about what services would or would not be provided for that amount.
One other note: You say your preferred agent has lowered his initial figure. That probably brings the figures pretty close, and is a positive sign that your preferred agent is willing to work with you.
Check around. But my gut instinct is to go with your preferred agent.
Hope that helps.