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What is the selling agent commission in New York City real estate? We’ll demystify this topic in the following video, I’m Nick at Hauseit. Visit our website https://www.hauseit.com to save money when buying or selling real estate here in New York City, so let’s get started.
The selling agent commission is the fee that is payable to the agent that brings the buyer for a home sale. The selling agent commission is typically 3% of the contract or sale price.
So who is the selling agent? The selling agent is also known as the buyer’s agent. Although the selling agent can also be the listing agent that she or he finds a direct buyer meaning no buyer’s agent is involved in the deal. When a seller’s agent finds a direct buyer and represents both the buyer and the seller, the agent is considered to be operating under a dual agency arrangement. The term selling agent isn’t widely used due to its confusing nature and instead the terms the listing agent, seller’s agent and buyer’s agent are more commonly used here in New York City.
What is the typical selling agent commission? The typical selling agent commission ranges from 2.5% to 3% here in New York City. Selling agent commission rates vary by neighborhood and while it’s possible to see selling agent commission rates below 2.5% anywhere in the city, you’re more likely to see higher selling agent commission rates of 2.5% or 3% in Manhattan and adjacent areas such as Park Slope in Brooklyn. In the suburbs such as Westchester and the Hudson Valley, it’s more common to see lower selling agent commissions such as only 2%. You’re also more likely to see lower selling agent commissions in non-REBNY areas such as Eastern Queens and Southern Brooklyn.
What do we mean by non-REBNY? Well, we’re referring to areas of the city where the Real Estate Board of New York has less dominance and influence over brokerage activities. It’s also much more common to see high selling agent commissions when it comes to new developments particularly for larger buildings. These large developments almost always offer a 3% selling agent commission. A developer may offer more than 3% in order to entice more traffic from represented buyers. If a developer is especially desperate, they may even offer buyer’s agents cash, gift cards from somewhere like Nordstrom’s and other sweeteners on top of the standard 3% commission. And some developers may agree to upfront half or all of the commission at the time a contract is signed instead of making the broker wait until closing as is customary.
Can you increase the selling agent commission later? Yes, you can increase the selling agent commission later if you didn’t offer a market rate level of compensation to begin with. However, it’s much better to offer a full selling agent commission from the outset right when you first list. That’s because many buyers’ agents will only see a listing once when it’s first listed. Typically through email, notifications from search alerts that they have saved for clients. If the listing doesn’t have a fair level of compensation being offered, the buyer’s agent is likely to ignore that listing going forward. They certainly won’t prioritize it with their buyer clients. Now, this means that they won’t ever think to click back on the listing and look up the selling agent commission to see if it’s changed. They’ll simply ignore the listing going forward. Furthermore, it’s fairly difficult to get the word out about an increase in broker commission as opposed to lowering the home price. That’s because changing the commission will not automatically cause a flurry of search alerts to go out like a price change would cause.
So there you have it. We hope you found this video helpful, I’m Nick at Hauseit. Visit our website https://www.hauseit.com to learn about ways to save money when buying or selling real estate here in New York City. And if you like this video, do us a favor hit like, subscribe and leave us a comment. We’d greatly appreciate it and we hope to see you on the next one!
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