Home Selling in Bensonhurst>Question Details

Sage, Home Owner in Brooklyn, NY

How can find out what is the most usual RE agent commission rate being paid in the area where my house is?

Asked by Sage, Brooklyn, NY Fri Feb 17, 2012

I have selected an agent who was recommended to me. However, a co-owner says they have an agent who will sell it for a lower % commission rate. I don't want to use that co-owner's RE b/c they are related to their attorney, and this is a conflict of interest for me. My preferred agent can't meet that competing % but has lowered his initial %.

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Javier Meneses’ answer
Robin is 100% correct with her point. If a Realtor in another office sees your listing in MLS and notice they would only get 1-1.5% commission, they will more than likely show other proerties that are paying thema ahigher commission. Why would they show your property to their buyers if you're only paying them half of what the rest of the listings would pay them?

Unethical, and a poor way to do business, but that's how it is!
1 vote Thank Flag Link Thu Feb 23, 2012
Commissions are always negotiable between you and your agent, there are no set standards; therefore choose the agent you like best and who has the most to offer; choose your agent with care and not by commission alone....
1 vote Thank Flag Link Fri Feb 17, 2012
Finding out about local commissions is important.
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,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
0 votes Thank Flag Link Tue Apr 24, 2012
I attend almost all of my closings, so I see not only what percentage the agents get, which does vary greatly, but how many times the commission is split between 2 offces. When your listing agent puts the listing onto MLS or REBNY, they will say what the selling agent's percentage is. Let's say one agent wants to charge you a total of 3%, they will only offer half of that to the selling agent, assumng that they don't sell it themselves, which from my experience is rare. If your chosen agent for example want to charge you 4%, they are going to offer 2% to the selling agent. It may seem like a small difference, but the percentage they get is split with the office they work for, so when commissions end up being too low, it is possible that you may not get as many showing as those homes that are offering more to the selling agent. Of course I am sure that most agents will say that they show all appropriate listings, but if there are a lot of listings in your area that are comparable to yours, you may miss a few showings, and even if it is the 1 person who is going to make you an offer, it is 1 too many to lose.
0 votes Thank Flag Link Thu Feb 23, 2012
Sage, look, as a mortgage banker for over 8 years I can tell you that a Realtor's commission is ALWAYS negotiable. Sure, there are several things that come to play when determining if a commission is too high or not. But you should NOT hire an agent solely because his/her fee is low, at the same time don't pass on a good & reputable agent because his/her fee is higher! At the end of the day, list with someone you had a chance to meet and feel comfortable with after you had an opportunity feel them out. Don't lock yourself into a listing agreement long term, at the same time, should you not sell within that time, don't be afraid to re-hire the agent if you see they're doing a good job and being honest with you... You get the idea!

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.)
0 votes Thank Flag Link Thu Feb 23, 2012
Sage,

You received good advice, but I’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 wouldn’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 camera’s. Which of the agent will write a seductive property description that’s SEO optimized instead of using broker jargon abbreviations which search engines ignore and buyers can’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 you’ll take home .75% minus taxes if you sell the other you’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.

Best
~Alen
0 votes Thank Flag Link Wed Feb 22, 2012
Negotiate for yourself, THERE IS NO TYPICAL COMMISSION! You state" My preferred agent can't meet that competing % but has lowered his initial %". What would your preferred agent do if you used the same language to him/her on your behalf indicating you can't pay that rate?.Each real estate company is free to set its own fee schedule and to negotiate various rates with individual buyers and sellers. Any agreement between two different firms to set standard rates, however, is a serious violation of antitrust laws. Violations occur when competing firms agree to act together, this is what the US Justice Department calls restraint of trade. There is no set fee, fees are negotiable.
Web Reference: http://www.clovelake.com
0 votes Thank Flag Link Fri Feb 17, 2012
In Brooklyn 5% is the widespread number. Smaller and lesser known firms may charge 4% to compensate for lack of brand name recognition. If the agent you have chosen is offering to sell it for a 4% commission, and you are confident about his/her sales and marketing skills - go for it.

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!
0 votes Thank Flag Link Fri Feb 17, 2012
Easy.

Ask.

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.
0 votes Thank Flag Link Fri Feb 17, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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