Buying and selling real estate in New York City is a complicated process from start to finish. Real estate agents and brokers serve as an insurance policy against the potential pitfalls that can happen in a sale. To have an experienced, qualified agent who has been through these situations there to guard you against these potential pitfalls is invaluable.
While it is absolutely possible to sell in NYC without an agent or broker, it isn’t probable that you’ll get the best market value if you do. In short, don’t buy or sell without an agent.
Properties listed as “For Sale By Owner” in New York City are rare, and are truly successful sales even less often. Most of the time when we see a FSBO apartment trade, it’s not necessarily “For Sale By Owner”, but more so “For Sale Without An Agent”, where a neighbor buys a neighbor’s apartment.
Keep reading to find out what exactly “For Sale By Owner” means in Manhattan, some of the potential pitfalls of selling a property without a real estate agent or broker, and so much more.
What Does “For Sale By Owner” (FSBO) Mean?
When a property is listed as For Sale By Owner (FSBO), the owner of the home is selling without the assistance of a real estate agent or broker.
There are several reasons a homeowner may choose to list their property as For Sale By Owner, but generally it is to try to avoid paying agent or broker fees and commissions. In today’s world, you can buy and sell just about anything you want online – including real estate. It may seem like selling property in NYC is as easy as listing your home on StreetEasy and waiting for a buyer…but in reality, it’s nearly impossible to do correctly without an expert’s advice.
Opting to list your property as For Sale By Owner is a perfect example of being penny wise and pound foolish. Most properties listed as For Sale By Owner in New York City sell for under market value, often significantly. Navigating the entire process from listing to closing requires an incredible amount of research, time, and energy.
In our eyes, any money saved is not worth the aggravation and risk. Sure, you may save 5% or 6% in commission, but you are likely losing much more than that by selling your apartment for less than it’s worth.
How Much Are Agent / Broker Fees And Commissions In New York City?
A typical real estate commission in NYC is between 5% and 6% of the final sale price, and is included in the price of the property. The seller is responsible for paying the commission for both the seller’s and buyer’s real estate agents. The commission that the seller pays to the buyer’s agent exists to incentivize that agent to show the property to potential buyers.
Commission rates aren’t the same across every real estate agency or brokerage, and a seller can always negotiate for a lower rate. However, the value that real estate agents and brokers can bring to a sale is well worth the commission rates.
You can find out more about how real estate commissions work by listening to episode 30 of our podcast.
What Does A Real Estate Agent Do?
A real estate agent or broker is there to help you secure the best deal possible for your property. They should both set your expectations and guide you through all steps of the process. This includes the preparation of the home in order to make it present at its best, coordinate and execute all marketing efforts, qualify buyers, handle negotiations, provide resources, and be there to answer any of your questions about the often confusing and complicated process of selling real estate in NYC.
Real estate agents and brokers also have access to far reaching real estate data. When it comes to selling a property in New York City, pricing is key. If a property isn’t priced appropriately, it can sit on the market for months or years with very few or no offers. Real estate agents and brokers use their expertise in analyzing similar properties in the current market to recommend the best possible sale price for your property.
Want to know more about the role of an NYC real estate broker? Click here to listen to episode 4 of our podcast, where we answer this question in even greater detail.
What Are Some Of The Potential Pitfalls Of Listing As For Sale By Owner?
For every real estate transaction that has ever happened, there’s a story to be told. A seller is likely to have a cache of happy memories associated with the property. They tend to see more value than is actually there, and in turn, tend to overprice their property.
A real estate agent or broker can help to remove emotion from the transaction, and serve as a sort of buffer between the buyer and the seller. That’s why you see brokers really focusing on FSBOs, to try to get them as listings. They want to educate the sellers how and why they may be leaving money on the table by listing it themselves.
When buyers know that a property is listed as For Sale By Owner, they are more likely to view the property in a negative light. Sellers typically overvalue their property, and buyers know it.
Additionally, it is never in a seller’s best interest to be interfacing directly with potential buyers – there’s a reason there’s a degree of separation between buyers and sellers in real estate transactions. Things can get tense, and you’ll want an experienced broker on your side if any issues arise to make sure you’re getting a fair deal.
Without representation by a real estate agent or broker, sellers are typically left to show the property themselves. This often makes buyers uncomfortable and feel as though the only feedback they can provide is positive feedback. With no constructive feedback about a property, the seller is unable to improve the property’s chance of being sold.
A real estate agent or broker serves as a middle-man between the buyer and seller, and helps the seller to make any necessary changes to their home in order to get the best market price possible and get the property sold quickly.
No Commission = Fewer Showings
When a real estate agent or broker knows that a property is listed as “For Sale By Owner”, they are less likely to recommend that property to a potential buyer. “For Sale By Owner” properties place an extra heavy workload on a real estate agent or broker, and although some FSBO’s may offer a commission to a buyers agent, it is certainly a more cumbersome transaction with a lower chance of success, which results in less agents wanting to take on the project.
If you’re considering selling your property as a ‘For Sale By Owner’, we urge you to reconsider – not only because this is our line of work, but because skipping the broker’s commission will likely cause you to lose much more money in the long run. While it can be done in other areas of the country, NYC is not the place to try to run a real estate transaction yourself.
Have any lingering questions that we didn’t answer? Ready to take the first steps towards selling your property in NYC? Please, reach out! The Gasdaska Conlon Team is here to help you in any way, whether you’re a first-time buyer, a long-term client, or just curious about the process.