Home Selling in 11385>Question Details

Mark, Home Buyer in New York, NY

How much is an acceptable buyers broker commission in Ridgewood, Queens? (11385 zip code)

Asked by Mark, New York, NY Fri Sep 24, 2010

I've been told different things by different people. The range seems to be 1.5% - 3%. I plan to list a house with a flat-fee listing agent, and want to keep the buyers commission in line with the norm. My first thought was 2.5%, but then the first flat-rate rep I spoke to told me I should offer at least 3%. Then another flat-rate reps told me that 3% was high for Queens, NY, although standard in other states. He said that he checked with other listings and the most common buyers broker offers he saw in this zip code were 1.5% followed by 2% with a handful that were 2.25%-3%, and he suggested I offer 1.5-2%

So now I'm thinking to offer 2% (same as listing agents offer) or maybe 2.25% since the broker will deal with me instead of a listing agent, which will probably make his job more difficult, as I am not a professional.

What are your thoughts? Thanks!

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Answers

10
Mark,

Good questions to ask a local full-service realtor... Congratulations on having the understanding already that the broker representing the buyer will have to do more work to sell your home than another property listed by a full-service broker!

The first question I would ask is which local agents have a track record of selling price close to asking price. Then ask what service fees are offered by these successful agents on the listings they have recently sold. If your goals include the best net financial result, you owe it to yourself to hire a strong full-service broker from the start. The vast majority of For Sale by Owner and discount broker "sellers" end up with a full-service broker anyway by the time they sell.

Discount (flat rate) brokers encourage sellers to list their homes with no service while offering to pay top professionals a fee to negotiate in favor of their buyer clients. The net result is lower price & worse terms for the amateur seller and larger benefits for the professionally-represented buyer. Other writers have accurately pointed out that longer time on market (which ususally means a lower selling price) and a much lower success rate also tend to occur with discount brokers).
1 vote Thank Flag Link Fri Sep 24, 2010
Hi Mark, Forget what you've been told...you can offer 1% if you want.....you will get what you pay for. Pay a broker to market your property where you will get more money in the end. Just because you pay less commission does not mean you will end up with more money in your pocket. What advertising are you planning on doing? where do you plan on advertising? what days are better? Which websites are the best? Who will you have to negotiate on your behalf? Finding a buyer is the easiest part of a deal-and sometimes takes quite awhile in this market....it's keeping the deal going that's the tough part,engineers inspection, re-negotiating if necessary, termite inspection, whose responsible for treatment or damages? bank appraisal, etc,etc,...I am sure all brokers will tell you we earn what's left of our money.

Would you go to a cut rate doctor or the one with the best credentials? Just a thought Terry K 718-614-3167 cell or email me therese.korahais@elliman.com
1 vote Thank Flag Link Fri Sep 24, 2010
Please keep in mind that the broker and the agent that sells your home will split the commission. Therefore, it is NOT in your best interest to go LOW. It will hurt you as far as activity and selling your home within a couple of months. Of course, you DO NOT want to over-pay and that is understandable. I can advise you to go with a 2.5% percent and know that sales agents will in fact show your home. Under 2% will only hurt you,. And remember real estate is LOCAL, it doesn;t matter what other areas people have looked into. Stay within your marketplace and your outcome will be a positive one. Wishing you all the best. Elizabeth
0 votes Thank Flag Link Thu Jun 14, 2012
The short answer is anything a Buyer Broker will accpet. In my case the minimumn I will accept is 2.5%. If the market in Queens is slow and you want to incentivize Buyer Agents, then 3 or even 3.5% would make good sense.
0 votes Thank Flag Link Sat Sep 25, 2010
Mark

A fair commission establishes an incentive to engage and motivate professional real estate agents to show and sell your home. The flat-rate, under prices the commission, on your home, could in fact place the home at a disadvantage in the market much the same way over-pricing the home itself does. I just sold a 3 family on Linden st. because, the commission and price were just right it took me 28 days to sell it, go into contract and we will close by the second week of November.

Please beware that so called flat-rate commissions are just for listing the property for sale and their is a different fee for selling it. If you have any questions or thoughts, I will be delighted to hear from you.

Fajardo Delacruz
Licensed Real Estate Agent
Century Homes Realty Group llc
Direct Line: 347-932-0609
0 votes Thank Flag Link Sat Sep 25, 2010
Mark
Thanks for your question. I love questions that already have answers. You just want to make sure you are on target, right/?

What your post shows is that you do really know more than most agents. After all, if all it took to sell a home was the percent paid to the buyer's agent, who'd need listing agents, right?

Or is it possible, in your expansive experience in real estate, that you missed something? Sorry, but I find it amazing.

Let's start with the link below. While you are figuring out what to do, your market is declining. According to this link. 4.9% over twelve months. That equals about 4/10s of a percent, per month. So, in a declining market, you are going to pay a buyer's agent something...let's say 2.5%. You are going to pay the flat fee service $2,500 - $5,000.

So based on the average home sale of $450,000 that means that you are paying the MLS Entry Only company about 0.5%. You are paying the buyer's agent 2.5%, so you are trying to save 2%.

2% of $450,000 = $9,000.

If your property is worth $450,000, and it is on the market three months, that is $5,400. Now you are trying to save $3,600.

Let's look at the facts:

MLS Entry only brokers offer one benefit - low cost. So if you property goes on the market, you are banking that your extensive real estate experience will allow you to sell to a buyer's agent. Here are the facts on MLS Entry Only Brokers or Discount Brokers, whose performance I track each quarter:

1. Listings by MLS Entry Only or Discount brokers fail to sell twice as often
2. When they do sell, they sell, on average, for 2 - 2.6% less than full service brokers.
3. If they sell, they take longer to sell.

All Realtors are not equal. Let me ask you this: If you were interviewing Realtors, and you brought me your resume, would you hire you? based on your track record?

Interview three, Realtors, compare their proposals, then do what you think best.
0 votes Thank Flag Link Fri Sep 24, 2010
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Mark,
If you are flexible on what commission you are considering offering, reconsider the flat fee broker. In my experience, homes listed with these services have a poor record of selling. In many cases these companies have more canceled and expired listings than sold ones and those that do sell often sell for a larger discount than those offered by full service agents.
Interview some top agents in your area and discuss your options openly. Not only will a quality agent save you some work as you already acknowledge, they will protect you from many possible snags which will cost you time and money. A good agent is worth more than their commission, but a bad one will cost you even more. Best of luck.
0 votes Thank Flag Link Fri Sep 24, 2010
Keep in mind that commissions are always negotiable between you and your agent--there are no set standard fees--interview as many different agents as needed and choose the one you like best and has the most to offer.
0 votes Thank Flag Link Fri Sep 24, 2010
As already noted, it's negotiable.

I can't speak for Queens, and there may well be some variation by community or area.

However, even assuming the second flat-rate rep is correct that the most common ranges were 1.5%-2%, that doesn't necessarily mean that's what you should offer. Maybe the other sellers are just trying to really economize at both ends. Nothing wrong with that, but that can sometimes result in unintended consequences.

Try to determine (maybe from the first flat-rate rep) what the most common commissions offered are for full-service transactions. As you yourself note (and it's an insight that a lot of folks don't have--so, kudos to you on that), the transaction is likely to be more difficult for the buyer's agent since he/she, in effect, will have to do the job of both the buyer's agent and the listing agent. As a result, you want to make sure that the agent is appropriately compensated.

The problem right now is that you've gotten two difference pieces of what should be factual information (what are the most common ranges of commissions paid to a buyer's agent) from two different sources. You first need to resolve that. And then, using that information, you can make a better decision on what you should offer.

Hope that helps.
0 votes Thank Flag Link Fri Sep 24, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
There are no set commissions....setting commissions is against Federal laws.

Offer what you feel is appropriate.
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Fri Sep 24, 2010
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