How Do Real Estate Commissions Work? Are They Worth It?
The John and Jonathan Sell NYC Podcast: Episode 30
Welcome to the John and Jonathan Sell NYC Podcast, where experienced, expert NYC real estate brokers John Gasdaska and Jonathan Conlon break down what’s happening in the market, what you need to know whether you’re a buyer, seller, or agent, and their insight into the future, with a little bit of fun along the way.
NYC Real Estate Commissions
One of the biggest costs to sellers is the broker’s commissions, so we understand how attractive it is to try to go it alone. But here’s the thing: there’s so much expertise needed to sell a property, and you’ll get your money’s worth if you choose two work with an experienced, expert broker.
What Are Real Estate Commissions?
NYC real estate commissions are payments made to brokers for services rendered in the sale or purchase of a property. It’s usually a percentage of the property’s selling price, but it can be a flat fee as well. Flat fees are very uncommon in NYC, but not unheard of.
In NYC, we co-broke nearly all listings, which means the commission is split between the buyer’s broker and the seller’s broker.
Infrequently, direct buyers (buyers without an agent representing them), will show interest in a property we have listed, and we can represent them as well. Generally, there is a discount on total commissions when something like this happens, but it’s an exception to the norm.
What’s The Typical NYC Real Estate Commission?
The typical NYC real estate commission is between 5-6% of the sale price of the home, depending on a number of factors. The broker commission is the highest seller closing cost in NYC, but well worth it, given all that is needed to help an apartment sell in Manhattan.
Buying and selling real estate in NYC is complex, generally more so than in the rest of the country. The board application process for co-ops requires building and board knowledge, and an expertly crafted board package.
Brokers also earn their commission through their pricing expertise – knowing fair market prices takes years of working in the industry to understand.
What Are Commission Concessions?
Commission concessions occur when, as a buyer, your broker discounts a portion of the commission they are due for representing you. Concessions don’t occur very often, but when you’ve been working with a team for a long time or there are extenuating circumstances, it can happen.
Should You Try To List Your Apartment As For Sale By Owner?
In short, no. While you technically can sell your apartment without an agent, if you do get an offer, it is typically well below what you could have achieved by working with a broker. Though broker commissions are a large part of closing costs, they are incredibly necessary – there are so many intricate details, nuances, and skills that you need to successfully sell an apartment in New York City. If you haven’t found the right broker yet, consider giving us a call – no obligations or expectations.
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