Are Real Estate Agent Commissions Negotiable in New York City?

Save 6% in broker commissions when selling: https://www.hauseit.com/agent-assisted-fsbo/
Save 2% When You Buy: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/

Before the advent of the Agent Assisted FSBO and 1% for Full Service listing options, the answer to are real estate agent commissions negotiable in NYC would most certainly have been no.
So, why aren’t real estate agent commissions more negotiable in NYC?

Concentration of Power and Lack of Competition in NYC Real Estate

One of the main reasons why real estate agent commissions in New York City have traditionally not been negotiable is because NYC brokerages have never had serious competition from discount brokerages.

Almost all of the 50,000 agents in New York City work at traditional, full-service brokerages with often unwritten yet strict firm policies against discounting or negotiating real estate agent commissions.

Furthermore, there are a variety of intrinsic reasons why agents won’t do a flat fee MLS listing in NYC such as damage to their reputation.
Moreover, the proportion of listings and agents that are concentrated in the hands of the largest firms makes the industry oligopolistic by nature.

As a result of controlling almost all agents and listings in the city, traditional brokerages do not need to discount or negotiate their real estate agent commissions.

Widespread Misinformation and Market Manipulation by NYC Brokers

The second reason that NYC real estate commissions have not been negotiable is because insider agents are able to get away with providing misinformation about the market to unknowing sellers.

For example, large NYC brokerages and their real estate agents can easily convince home sellers that they won’t have the same exposure to buyers by listing through a smaller firm or a discount brokerage who is willing to negotiate on commissions.

Real estate insiders know that all firms, large or small, have the same listing syndication tools and exposure to clients.

Yet most home sellers will still push themselves into believing the common real estate agent lie that smaller firms receive less buyer exposure because as outsiders they have no way of disproving it.

Because of the secretive nature of the NYC real estate industry, real estate agents are able to mislead home owners into listing with them through a combination of fear, misinformation, harassment and solicitation.

Peer Pressure from the Real Estate Brokerage Community in NYC

A third reason why NYC real estate commissions have not been negotiable is because agent insiders who offer to discount commissions often face backlash from fellow agents.

When a broker attempts to break ranks and openly discount their services, they face an incredible amount of flak and pressure from the rest of the broker community.

Because 90% of all NYC real estate transactions involve two agents through the concept of co-broking, brokers have a tough time openly discounting their commissions because they need the cooperation of other brokers to successfully close deals.

The team at Hauseit has instead taken a softer approach to negotiating and reducing real estate commissions in NYC. Hauseit affiliates are traditional, full-service REBNY Member Firms who have agreed to privately reduce commissions for both home buyers and sellers.

Hauseit sellers can choose between listing FSBO in NYC for a flat-fee or by using a full-service listing agent for only 1% commission.

What Are Common Responses from Agents When Asked If Real Estate Commissions Are Negotiable in NYC?

Here’s a sampling of what we’ve experienced from our tests in the field.

“It’s very corporate here and you have to get approval for any sell-side listing that isn’t 6%. Management will recoil at 5% because they feel like it will hurt the brand to be seen taking a discount.”

– Stephanie D., Licensed Real Estate Salesperson at [redacted, large NYC brokerage]

“Our commission rate is 6% to sell. Sorry there is no flexibility and firm policy.”

“Does anyone else want to do that?”

“The best we can do is 6% if there’s a buyers’ agent and 5% if there is an unrepresented buyer and we represent both sides of the deal”

How Can I Save on Real Estate Broker Commissions When Selling?

Fortunately, NYC sellers now have at least two ways of selling an apartment in NYC that doesn’t involve paying 6% to a listing agent.

Hauseit LLC, Licensed Real Estate Broker
Tel: (888) 494-8258 | https://www.hauseit.com
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