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Mike, Home Seller in New York, NY

How much is a buyer's broker paid in commission?

Asked by Mike, New York, NY Thu Mar 26, 2009

I am selling my apartment without a seller's broker. If a buyer that makes an offer who uses a buyer's broker, what is the typical arrangement for paying the buyer's broker commission? Do I, the seller, need to pay them their 3%? 6%? Is it negotiable?

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If a buyer's broker comes along, the first question they usually ask is, "How much commission are you paying?" It is pretty fair to pay the broker at least 4% for this type of deal because the buyer agent didn't do months of labor or paid for marketing. It's up to you, but definitely offer a competitive commission rate so agents will want to show the property often.
0 votes Thank Flag Link Mon Apr 27, 2009
Hi, Mike.
I've got to tell you that by selling it on your own as a For Sale by Owner you are putting yourself at a real disadvantage. You are not able to give yourself the kind of exposure a full-service brokerage can. The two things that sell an apt. is correct pricing and great exposure. By limiting your exposure you are limiting the pool of buyers and in all likelihood you will end up with a much lower sale price. According to the National Association of Realtors, 86% of for Sale by Owners do not succeed in selling on their own, and those that do generally get 25% less for their property. Add to that that we are trending down 1.5% each month in Manhattan right now. Time IS money.

That said, most properties in Manhattan are listed for a 6% commission which covers listing side and buyer side. A buyer side agent would expect 3% on a sale where they represent a buyer. Many, however, prefer to deal with other agents and will search our agent database for properties rather than deal with a For Sale by Owner.

If you'd like more information on how to market it for the most exposure - locally, nationally and internationally, click on my contact info.

Best,
Jenet Levy
0 votes Thank Flag Link Thu Apr 16, 2009
Hi Mike,

A couple of the agents here have it right. Here's the bottom line. We are in a buyers' market and although the burden is on the agent to find out (during his/her first communication with you) if you are offering a commission to a buyer's agent, and no you do not need to pay it, but it makes common sense to supply the *typical* 3% that the buyer side usually gets in Manhattan. (In Brooklyn we've seen as low as 2.5% and 2%.) This is also commensurate with what your property is being sold - i.e. 3MM+ you can sometimes expect to pay less than the 3% standard in Manhattan.

I am saying all this assuming several things - the offer came to you through the agent, and the buyer is not making multiple offers with other sellers (you can ask the buyer's agent.) Basically, are you competing with another unit in the same building, perhaps even on the same line? If so, you want to make certain that you are paying the commission and, if advertised, probably something higher.

Call me directly if you have further questions or need a seller's agent - 646.442.7407
-Yocari
0 votes Thank Flag Link Wed Apr 15, 2009
Yes, the commission is always negotiable but, bear in mind that a buyer broker is working strictly for the buyer and therefore against you. You are not saving any money by not being represented by a listing agent because you will get lower offers from a buyer broker. The money that you think that you are saving by just paying a buyer broker will cost you with a lower selling price. A good listing agent will be skillful in negotiating on your behalf. Get some advice from a listing agent before making your final decision.

Millie Thomas
Wading River, NY 11792
0 votes Thank Flag Link Sat Apr 11, 2009
It could be that the buyer pays his/her own broker's fee as they've retained them and may have a buyer's broker agreement with them which stipulates how their broker will be paid. This would have nothing to do with you actually. But it really all depends on the agreement that they have between them (buyer and buyer's broker) as well as what you are willing to do to effect this sale.

Do you have lots of potential offers?

Yes? Ask the buyer to pay his/her own broker fees.

No? Kick in anywhere from 1-3% depending on how motivated you are to close this sale.

Remember: the buyer's broker will mostly likely feel s/he is entitled to a full 3% as you are not professionally represented. In order to ensure the transaction goes correctly, they'll be doing a lot of the work that YOUR agent would be doing, if you had one. So don't be shocked if they ask for more than 3% because the buyer's agent will be doing more than their fair share of the work (if they are good!).

Best of luck.
0 votes Thank Flag Link Fri Apr 10, 2009
If the broker is representing only the buyer and not assisting you in any way 3% is fair. It will also depend on the complexity of the situation.

Mike Rowland
Windermere Rowland Realty
510-222-9150
0 votes Thank Flag Link Thu Mar 26, 2009
Everything is negotiable. When the buyer agent brings a customer into your apartment they state they are acting as a buyer agent and have a signed commitment with the buyer at "x" commission. When the offer is presented it is stated what the total dollar amount is, and what you will net after commission. The transaction is paying the commission.
0 votes Thank Flag Link Thu Mar 26, 2009
Mike,

It is indeed, negotiable.....but important to note is that one party will be taking care of the total amount of work.

Good luck
0 votes Thank Flag Link Thu Mar 26, 2009
Evrythign is negotiable but you get what you pay for in this market.
0 votes Thank Flag Link Thu Mar 26, 2009
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