msmallomar's Profile
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March 11, 2009
Realtor commissions
My husband and I have put a bid in on a house and the seller is considering it. In the meantime, we are trying to figure out ways to cut costs on the transaction should it go through. One way, of course, would be if our realtor would agree to reduce his commission, which is 5%. Our house isn't on the market yet, so we have no idea how much work he will have to do to sell it but it just seems like an awful lot of money (my yearly salary!) to hand over. Has anyone had any success negotiating commissions? Is it something that can be done in this down market, or do realtors tend not to budge? Any advice or information would be appreciated.
Author's Comments
I went to the open house and there is just no easy way to make this into a 2 family -- you would have to sink a lot of $ in it to do so. And if you want it as a 1 family, it's a crappy layout. The second floor has no bathroom, and the other bathrooms looked like they hadn't been touched since the 50s. I was also suspicious that it has been sitting around for so long. I heard that they had an accepted offer that fell apart. It could have been mortgage related but I wonder if there aren't some structural issues, too.
Posted by: msmallomar at February 23, 2009 3:46 PM in response to House of the Day: 356 1st Street
I went to the open house and there is just no easy way to make this into a 2 family -- you would have to sink a lot of $ in it to do so. And if you want it as a 1 family, it's a crappy layout. The second floor has no bathroom, and the other bathrooms looked like they hadn't been touched since the 50s. I was also suspicious that it has been sitting around for so long. I heard that they had an accepted offer that fell apart. It could have been mortgage related but I wonder if there aren't some structural issues, too.
Posted by: msmallomar at February 23, 2009 3:46 PM in response to House of the Day: 356 1st Street
Responses to Author's Forum Comments
Never hurts to ask, and I would also offer that in this market, most brokers are desperate for business.
Posted by: Schultz at March 12, 2009 9:27 AM in response to Realtor commissions
I would interview other brokers to see how low they will go so you can make a counter offer based on real competition. You should have two rates, one for a direct sale(no other broker) and one for a commission split with a second broker. You can also negotiate for one rate for the first million and much less for the rest. But you have to find out what other large firms are willing to do. Let them all know you are shopping for a broker. No matter what they tell you it is ALL negotiable, even Corcoran. As for selling it yourself I have
no experience, but would like to hear what others have to say.
Posted by: edifice rex at March 12, 2009 9:41 AM in response to Realtor commissions
Ask if he'll reduce it further, no harm in asking.
6% is the standard, traditional fee. If there is a buyer and seller broker they each get 3%. With him asking 5% that cold be seen as an initial reduction.
Years ago Foxtons came to NYC with their 2% commission gimmick. Needless to say they did not make major inroads.
I don't necessarily agree with the 6% fee, but it is what it is and has been that way for a very long time in NYC, through good and bad economies alike.
But one never knows...
Posted by: christopher at March 12, 2009 9:51 AM in response to Realtor commissions
If you are giving the broker the listing to sell your house and also buy a house with him, he will be happy to give you a discount. I have done this. There is a limit as to how far you can go - and I think that is at about 4%. Remember, he has to get the other broker to agree, and also the folks at Corcoran have to approve the deal, as it reduces their cut, too. You can always ask for a discount. but in your case, because you are dealing with multiple deals, you have better leverage.
Good luck,
Posted by: homey at March 12, 2009 9:59 AM in response to Realtor commissions
We sold our apartment over the summer (i.e., after the RE downturn began but before the "meltdown"). We sold it ourselves. We considered the broker route, but decided against it as we didn't feel like paying $50-75K in a commission. (Also, when we went to Brown Harris, their response was they could not even give us the "standard" discount to 5% b/c the RE market was bad.) Anyway, price your apartment competitively, and hold open houses every weekend. We had some during the week (evenings), but those never went well. Make sure your apartment is DECLUTTERED and spotless. We lived like that for a few months, but no big deal. We literally loaded up car-loads of stuff to leave at a family member's house during the process. We also agreed with a number of brokers that if they found us a buyer, we would give them a commission (it ranged between 2-3%). Bottom line, we might have gotten a little bit more for the apartment with a broker, but certainly not enough to offset the commission. All a broker really does is provide a customer/contact list. You have to clean the apartment for open houses youself (the biggest hassle). As for running the open house, it is really not a big deal to do it yourself.
Just ask if you have any questions....
Posted by: Splenda at March 12, 2009 10:26 AM in response to Realtor commissions
Everything is negotiable, downturn or not. 6% is a relative rarity, 5% has become the new 6%. Some agencies will say they aren't negotiable, or not unless they get an exclusive. I have negotiated 3% with a co-exclusive without any difficulty. One agency did the work and got the sale, the other didn't. There are other things to consider, like exclusivity, like the length of the listing agreement, the claim an agency has if you sell it yourself, etc.
Posted by: raphael9 at March 12, 2009 7:38 PM in response to Realtor commissions
You get what you pay for. Do you want to sell quickly?
Posted by: Adam Dahill at March 13, 2009 1:17 PM in response to Realtor commissions
I had spoken to this realtor 5 years ago when we were looking for an apt. but then we didn't end up finding anything through him. His agency, Corcoran, had the listing for the house we're interested in so I contacted him about it. He has shown us the house 3-4 times and we have submitted a bid through him. We were thinking that we would also sell our apartment through him since we like him enough. but when he did some estimates for us, he put his fee in the excel sheet at 5%, which, like I said, equals my yearly salary and is just so hard for me to swallow. Should I just ask him if he'll lower the commission and if he says no just search for another broker to sell our place -- or even try to sell it ourselves? We live in a very desirable building and our apt is in mint condition. I know that all bets are off in this market but units in our building have actually been moving at asking price or just below....
Posted by: msmallomar at March 12, 2009 9:10 AM in response to Realtor commissions