Home Selling in New York>Question Details

Gizmo, Home Buyer in Westchester County, NY

NYC: FSOB with 4% commission or co-broke at 5%. What is better for selling my apt?

Asked by Gizmo, Westchester County, NY Sat Oct 22, 2011

I've listed my Manhattan apt as a FSOB with Streeteasy and NYTimes. I've based my asking price after extensive research including recent sales of similar apts in the building. Unfortunately, I am told by soliciting brokers that since I am not on REBNY, no one knows about it, or that no broker wants to deal with owners. So now, I narrowed my choice down to 2 choices. Keep it as a FSBO and send out personal emails to as many brokers as possible offering 4% on buyer's broker commission vs. listing it with an agent who is willing to co-broker with another broker at 5% (she says she will accept 2% and give 3% to the buyer's broker) and 4% if she finds the buyer. What do you think is a better option to sell this apt? FYI - My sale price is about 800K and the UES apartment is gut renovated completely with high end everything, and I live in an exclusive co-op requiring 50% down, no subletting allowed, no pied-de-terres... but the maintenance/tax is super low at $900.

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Gizmo,

You are pretty much covered here with every possible answer, and I too agree that FSBO's rarely works. Unless you are priced spot on, in a great location, great building, you will have a tough time selling.

In your case you are in a coop, which requires a 50% downpayment and has too many restrictions (not the type of a building people gravitate to). While some desire this exclusivity, we can pressume that majority of buyers prefer a building with a lower downpayment, one which allows subletting, pets and possibly pied-a-terres. As a buyer you are already thinking of being a seller. When it's my turn to sell, how long will it take me to find a buyer with $400,000 liquid cash to put on a downpayment, and probably have another X amount of liquid post closing.

What your broker told you is true. Very few brokers perform searches outside of their company's internal listing system. NYTimes and SE feed off of companies database, not the other way around. Probability of a broker who isn't targeting a FSBO, finding your apartment isn't in your favor.

If you want to know how well FSBO's work, you may want to do a little research on a FSBO related company, it' sowner and how that person ended up hiring a broker to sell his own apartment.

Best of luck to you.
3 votes Thank Flag Link Wed Oct 26, 2011
Hello Gizmo,

I suggest that you list with a broker who co-brokes for 5%. This way, you do not need to deal with the hassle from Westchester and let her take care of it.

You say you have an expensive co-op with fully upgraded everything, then why treat it like a bottle of discount ketchup? On top of this, do you know the preparations involved in preparing a board package and getting an applicant approved? Most lay people would have no idea how to do this by FSBO and will rely on the other agent who is not being paid to do a job of two people. This is why most brokers won't deal with FSBO's to bring their clients.

Also, you noted that it is 50% down, this means you have a very strict co-op board and it is a known fact that brokers bring the most qualified individuals to the table, and not FSBO's.

I would be more than happy to assist you in selling your apartment. I sold my newest listing in 35 days because of my unique marketing strategies that other brokers do not have, plus my appraisal background that helps me price your unit right on the money for maximum profit in the lease amount of time.

http://www.buyandsellmanhattan.com/why-me/

Jennifer Chiongbian
SVP/ Associate broker
Rutenberg Realty NYC
9172502284
2 votes Thank Flag Link Sun Oct 23, 2011
Facts: 90-95% of buyers buy with an agent representing them. Those agents utilize the Manhattan Broker System (REBNY). Agents choose apartments based on the buyer's criteria. Then agents rank apartments by commission split. Agents take the buyers to the apartment that meet the criteria with the highest split first. It is a business. Agents generally don't work with FSBO's unless the apartment is identical to their client's criteria, or very close because it is 4x harder to deal with a FSBO (not only are FSBO's tougher to deal with than a referal listing, agents end up managing both sides of the deal for 1/2 the commission). There are around 10,000 apartments on the market right now. As an agent, why would would you work with a FSBO when you can provide your client something they like among the 10,000 units on the market that don't have that kind of work, unless it is something that you believe would absolutely meet your client's needs? Also, as a FSBO, why would you work with an agent that agrees to 2% on their side of the split? Are they experienced? How many deals have they done over the past year? Or are they desperate for a listing and do anything to get that listing? Have you spoken to their references? Are they worth the 2% they are going to get, or are they really worth more than that and you are getting them cheap....what are they going to skimp on and not do because they are getting much less commission than the normal? Are you getting the best agent that you can to qualify the buyers, best negotiate the deal, and if there are issues, keep the deal together and get it to closing? If your apartment is what it says it is in quality, but with a clearly complicated requirements and I imagine a tough board package, don't you think that you should get the best quality agent and pay the listing agent fairly, vs. 33% less than the average listing? What are you giving up to do that?
1 vote Thank Flag Link Sat Oct 22, 2011
Co brokes will always generate a higher Sales price as there is a serious LARGE buying pool.




Regards,

Marco Gomez
Associate Broker
Keller Williams Landmark II
Queens, NY
0 votes Thank Flag Link Tue Oct 25, 2011
Hi Gizmo. The first thing to look at here is timing. Once we hit the holidays things will slow up. Whatever you decide, you need to do it quickly. Forget the FSBO thing and hire a broker to exclusively represent your property and market it for sale. Time is of the essence...unless of course you are bathing in cash and don't mind kicking up the maintenance for not living there. Good luck.
0 votes Thank Flag Link Sun Oct 23, 2011
Gizmo,
Real estate professionals are not supposed to quote "standard commission rates" by law but I see that some have here? It looks like you have found an agent to list your home (I'd be curious as to whether you've been offered the NYS agency disclosure for Buyers and Seller's and which agency status you've agreed to?) As you won't have to pay to advertise in the NY Times, WSJ and other newspapers and websites (if the brokerage you want to list with does) then you will be saving that cost as well as the cost of professional photos and videos if offered. I am an exclusive buyer's broker so I wonder how this agent is going to post all these different commission rates? (if she sells it etc) I would definitely insist on holding many open houses (including a broker's open house) and doing the opposite- give the listing agent what she wants to give the buyer's broker and give the buyer's broker the larger part with perhaps the listing broker getting the same as the buyer's broker if the listing agent sells both sides! (This way you will be getting all those other brokers working harder to sell your place) What do you think?
Jolie Muss Licensed Real Estate Broker
Manhattan's Premier Buyer's Broker
212 721-3301 joliemuss@joliemuss.com
I f you like my answers please also follow me on twitter http://www.twitter.com/jojomuss and facebook http://www.facebook.com/jolierealty
0 votes Thank Flag Link Sun Oct 23, 2011
Dear Gizmo,

I understand your doubt/concern. 3% or 4%? What would be enough to tempt an agent to promote, bring a buyer and sell my apartment? I also understand that as a home buyer you do not want to have a lot of expenses, even more not a large amount such as a broker's commission.

Many of us in some point tried to rent, buy or sell properties in our own. However, having representation, professional support and exposure to the REBNY database is vital to a success transaction.

In the brokerage firm where I work, we created a program that assist home buyers who want to sell their properties and keep the expenses low with very low commissions.

If you are interested to know more about the Homeowners' program, do not hesitate to contact me.

Looking forward to hearing from you!

Regards,

Laura Thierer
Licensed Real Estate Salesperson
Homestate Properties LLC
102 Fulton Street
o: 212-693-9000
m: 914-426-0075
lthierer@homestateproperties.com
0 votes Thank Flag Link Sun Oct 23, 2011
The percentage you are offering it is better to list with an agent and put on MLS. MLS expose your property for all the agent.More exposure bring more buyers and more buyers bring more offers.
0 votes Thank Flag Link Sun Oct 23, 2011
Gizmo,
Nothing beats the right exposure! even at double the commission than hirinf a real estate broker.
Most good brokers charge 6% commission. It is a lot of hard work!! and it is a lot of dedication!!
You will be able to reach everyone who is even thinking of buying and filter so many people out!
In this market, the right broker will sell your home in at least 1/3 of the time you will spend trying to do it on your own. You need an experienced well seasoned broker with the right connection. Do not waste any more time. The sooner you list it with a broker at 6% commission, the faster you will sell your home!
You will be hiring experience, knowledge and exposure!
Best of luck!
Fern Hamberger
Senior Associate broker
fhamberger@citi-habitats.com
646.660.0060
0 votes Thank Flag Link Sun Oct 23, 2011
From experience, most of us brokers stay away from the hassle of dealing with FSBOs bec there is no written agreement that would protect our commission. Exclusive agreements are written to protect the hard work that we do. To answer your question about the 3% or 4%: our company would not market your property and use our advertising dollars if we are not assured our 3%. In an ideal world, 4% would be better. But we can only work with the customers that we currently have in our back pockets looking for a similar apt and not for your exact apt. You are limiting the pool of buyers that will see your apt somehow.

Zita Alvarez Lo
Licensed Associate Real Estate Broker
Bus 212-350-2825
Cell 917-656-8112

PRUDENTIAL DOUGLAS ELLIMAN
205 East 42nd Street, 6th floor
New York, NY 10017
0 votes Thank Flag Link Sat Oct 22, 2011
You need to get as much traffic as feasible. FSBO will not get you the most traffic which as you know will get you the most competitive price. So this isn't about what a commission split the buyer's side gets (agents always want the most they can get with out compromising their clients needs), it is what will sell your property the fastest at the highest price. You can be a FSBO and deal in drips and drabs through the real estate agents that you know and really not have the competition to give you the highest price, or you can use the full power of acquiring the 95% of buyers that are looking for your property. Before I became a real estate agent, I bought and sold my own property...always through an agent as I know how critical being on the MLS/Brokers' System (acquiring the 95% of buyers, not only the 5%) and getting deals to close in a difficult environment. And double check any agent you list with, check their references of the people that they have sold/listed property for, make sure they are who they say they are.
Bond New York
Kkillian1@gmail.com
954-675-9915
0 votes Thank Flag Link Sat Oct 22, 2011
Hmmm. Well, only you can decide if you're good enough of a listing agent to be worth 1% . . .
0 votes Thank Flag Link Sat Oct 22, 2011
Gizmo
I agree with Kelly,let someone deal and screen buyers for you.I would love to see it myself.Wish the you best.
0 votes Thank Flag Link Sat Oct 22, 2011
Kelly, thank you for a detailed, informative answer. The agent I have in mind is vey experienced and is a VP at Nestseekers. He closed a few of his listings recently so I think he is on the lookout for more listings (he has 3 others). My pointed question is what buyer's broker would like better: to get 3% commission and co-broke (do half the work according to you) or to get 4% commission and deal with the hassle of FSOB.
0 votes Thank Flag Link Sat Oct 22, 2011
Gizmo,
Call me I can help sell it right now with the right marketing and brand, but most importantly I have the right contacts! 6%



Talk sooon
Billy Briggs
~~~~~~~~~

Licensed Real Estate Salesperson
Prudential Douglas Elliman RE
1995 Broadway New York, NY 10023
(646) 312-9873 (cell)
http://twitter.com/BillyBriggsDE
0 votes Thank Flag Link Sat Oct 22, 2011
Zita, I understand what you're saying. In this case, my listing broker is willing to accept 2% and give the buyer's broker 3% so it won't adversely hurt the buyer's broker. My question is -- is that better than me trying to sell it on my own but offering buyer's broker 4% commission? If I post 4% commission on NYTimes and Streeteasy, will that be enough to get broker's attention to bring their buyers over without me having to list on REBNY.
0 votes Thank Flag Link Sat Oct 22, 2011
FSBO listings generally fall under the radar because they don't belong in the co-broke world of REBNY members. REBNY members are required to co-broke all of their listings. FSBOs don't show up in all of the broker websites as available listings. They may only show up in the websites you advertise. You will do yourself a disservice if you don't get the maximum exposure. 5% listings are highlighted as lower comm splits. A broker who has numerous listings to pick from may stay away from this type of listing bec of the lower split. You can't control the brokers' choices of what to show. Hence, you would need a smart strategy of right pricing and attractive commission for the brokers. Hope this helps in clarifying your question.

Zita Alvarez Lo
Licensed Associate Real Estate Broker
Bus 212-350-2825
Cell 917-656-8112

PRUDENTIAL DOUGLAS ELLIMAN
205 East 42nd Street, 6th floor
New York, NY 10017
0 votes Thank Flag Link Sat Oct 22, 2011
See links for an interesting article, you decide......
http://online.wsj.com/article/SB1000142405311190334140457648…
http://goo.gl/lGQl1
0 votes Thank Flag Link Sat Oct 22, 2011
Gail, I'm not clear on what you're saying. You're saying that an agent who will list my property at 5% co-broke will be ostracized because it is an understood custom that 6% is the minimum?

Armen, I don't have time to call. to answer your question - I've gotten 200 calls and visits from harassing, pushy, obnoxious soliciting brokers but only one broker has brought me potential buyers so far. Is it true that most brokers ignore FSOB listings except when they want to become the listing broker?

My thinking is... if I offer 4% commission to buyer's brokers, isn't that enough incentive for them to come preview the apt and show my apt to their clients? Or do clients usually look at the marketing material and then decide which apt they want to see (in which case I should get a listing broker because my photos don't do justice to this beautiful, immaculate apt.
0 votes Thank Flag Link Sat Oct 22, 2011
If a broker would market your property for you, they would fall out of integrity not only with their industry, but with every seller who has signed on the dotted line.

In addition, national statistics show that Realtor represented properties bring in over 20% more than FSBO's; offer out more commission!
0 votes Thank Flag Link Sat Oct 22, 2011
No broker wants to deal with owners? Nobody knows about it after it's on NY Times and StrestEasy?

Gizmo- call me tomorrow. 5 minutes on the phone with me will give you clarity. 917-848-6928

Best,
Armen
0 votes Thank Flag Link Sat Oct 22, 2011
Its always better to list with a broker. We have the ability and the resources to do an extensive marketing campaign. I know that i make sure that every newspaper, being a free source or a paid source has your listing as well as send it out to every broker in Manhattan. We can make sure to keep track of all the feedback as well as find someone who is qualified and not just "shopping." If you have any more questions or want to go over over some things, please email me at gforrester@trumporg.com or call my cell at 917-623-0787. Thanks
0 votes Thank Flag Link Sat Oct 22, 2011
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