Are Real Estate Agents Obsolete in NYC? [2021] | Hauseit®

Are Real Estate Agents Obsolete in NYC: https://www.hauseit.com/are-real-estate-agents-obselete-nyc/

Calculate Your Buyer Closing Costs: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/

Real estate agents in NYC still represent over 95% of sellers and over 75% of buyers as of today despite major advances in technology and information accessibility for consumers.

Furthermore, real estate commissions in NYC remain stubbornly fixed at 5% to 6% even as broker fees have fallen drastically in other parts of the country. Furthermore, broker commissions in NYC are two to three times higher than what sellers pay in London.

NYC has an entrenched ‘two-agent’ model which means that over 75% of transactions are done with two agents: a listing agent and a buyer’s broker. Buyers are encouraged to work with buyer’s agents because sellers continue to pay all commissions, including the fee to the buyer’s broker.

Consequentially, sellers are obligated to offer high buyer agent commissions in order to attract the buyers who are represented.

Although headline commission rates remain high in NYC, there are a number of ways to save money under the existing broker fee model. Buyers can significantly reduce or eliminate their closing costs by requesting a Hauseit Buyer Closing Credit, and sellers can save up to 6% in broker fees through an Agent Assisted FSBO. There’s also a more economical 1% Full Service Option for sellers who don’t have time to manage the sale process on their own.

Visit www.hauseit.com to learn about ways to save money when buying and selling in NYC. You can also estimate your closing costs using Hauseit’s interactive closing cost calculators available for buyers and sellers.

Why Do NYC Real Estate Agents Still Exist If All Listings Are Online?

Real estate agents in NYC are as influential as ever, despite the fact that all listings are now directly accessible to consumers online. So if buyer agents are doing significantly less work today than what they did 20 years ago, why haven’t commissions fallen in lockstep?

One reason is that major online real estate websites such as Zillow actively promote the intermediation of buyer’s agents in real estate transactions nationwide.

If you’ve ever searched for a listing on Zillow or StreetEasy, you’ll notice that that the default ‘contact’ option for most listings is not the listing agent but rather a buyer’s broker who has paid Zillow to appear next to listings as a point of contact for interested buyers.

The sale of ‘leads’ to buyer’s brokers as well as other advertising placement services for brokers are a major source of revenue for Zillow and many other competing real estate search websites. In other words, these major real estate websites rely on the continued existence of a high commission environment as part of their business model.

When Will NYC Real Estate Agents Become Obsolete?

While there are more reduced-commission alternatives for sellers today then there were 10 years ago, over 95% of sellers in NYC still hire a traditional listing agent and pay 5% to 6% in commission.

Arguably, there will always be a need for some sort of real estate professional to be involved in a transaction here in NYC. This is because most busy New Yorkers don’t have the time or desire to conduct their own open houses or prepare a co-op board package. Furthermore, even some of the most experienced career salespeople will tell you that they’re not very comfortable with negotiating on their own behalf.

While there will always be some value in having someone show your home and negotiate on your behalf, we believe that the cost of this convenience will continue to decrease over time until sellers feel that the commission structure is more fair and equitable.

Save Money with a Hauseit Buyer Closing Credit: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/

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