Question on Broker Commission
Hi, I am thinking of selling my one bedroom in center Park Slope. I talked to a real estate agent from Corcoran and they told me the fee is 6%. Does anyone know if that is negotiable? Are the other real estate firms a lot cheaper? Thanks
Hi,
I am thinking of selling my one bedroom in center Park Slope. I talked to a real estate agent from Corcoran and they told me the fee is 6%. Does anyone know if that is negotiable? Are the other real estate firms a lot cheaper?
Thanks
Thanks for the help!!
Thanks for the help!!
A) you can definitely get them lower. B) Why are broker commissions immune to the real estate correction? This whole notion that go above and beyond just finding you a buyer…they want one thing, VOLUME. Crank out the volume and collect the toll. Remember that. I think the service they provide is extremely over valued and hopefully websites like this one will soon erode the astronomical rate that they charge. Its only a matter of time.
Id be wary of anyone telling you “be sure they are a member of REBNY” nonsense. Its a club, nothing more–our non-REBNY brokers had a very attractive co-broke which we negotiated with them and REBNY agents as well as Brooklyn MLS brought buyers to the listing. And “you get what you pay for” doesnt mean you should overpay because they are splitting their commission with the corporation they work for. On the contrary, we chose them and their competitive pricing because they were smaller, flexible and needed less to cover costs, worked hard for their commission, told people the truth and marketed and staged our apartment beautifully. Great business model, actually. “Big box” real estate companies should take heed.
Please remember that finding you a buyer is only part of what the broker does. They are also your main ally in ushering you from accepted offer to actual sale, and these days that is an increasingly complicated process. Just look through this forum for stories of people whose deals fell through because that process wasn’t handled properly. The commission is only one factor you should be looking at when you choose a broker. Get some recommendations (there are plenty on this forum). The lowest price isn’t always the best deal.
“so 6% on a larger price means more money for the broker, but why should their salary be the same as before the prices went up?”
But their salary isn’t the same, the % commission is. Big difference. If real estate prices inflate at a greater rate than the average person’s salary, realtors will see their salary grow at a greater rate than the average person.
Actually, splits at all brokerages vary depending on how much the agent in question sells – for higher-earning agents, the split is often 75/25 (75 to the agent and 25 to the house) or more; 50/50 is for starters. So if two Corcoran brokers are involved in a sale of a $500K property at 6%, the total commission will be $30K; this is split 50/50 between the two brokers, and then further split according to their percentages – so say one may keep 50% ($7.5K) while the other takes home 60% ($9K). The same would be true if it were a Halstead broker and a Corcoran broker. So, yes, if you go with a non-cobroking firm, it’s certain that the full amount of the commission is only going one place, so maybe they can charge you a lower rate, but you’re also cutting out a huge chunk of the market – over 5,000 agents in NYC are REBNY members. Cutting out that market is an example of being penny wise and pound foolish.
what they all said 😉
5% seems to be more the norm now at many of the majors, when they tell you 6% they think you don’t know better.
better commission does increase the incentive to handle the listing well on the part of the broker.
commissions definitely go down to 3%.
price of the listing makes a big difference. you aren’t going to get a super low commission on a one bedroom, the price point just isn’t there.
the commission isn’t the most important part of the transaction, the sale is. a well priced listing with a good broker will get sold a lot faster than an overpriced listing handled by a disinterested broker who isn’t making what they consider enough to do the work.
and yes, prices have gone up, so 6% on a larger price means more money for the broker, but why should their salary be the same as before the prices went up? that makes no sense at all, and isn’t relevant. get a good broker and price it right, and don’t worry about what the broker makes. it’s a little like people thinking that contractors should be cheap, then they’re surprised that they don’t like the work…
I would say it is not that negotiable on a 1 bedroom because at Corcoran 50% of the commission goes to Corcoran the actual company and then the selling agent and listing agent split the other 50%. So for the listing agent, it could be a lot of work for not that much at the end of the day especially if they end up not being the selling agent as well. That is why Corcoran and the big REBNY companies are always 5 or 6%.
Local brokers can take a lower commission because 50% does not have to go to a corporation. They can be more flexible with there agents on the split. You should call some of the local brokers and interview them and see what you think for yourself.