Homeowners in NYC have it rough; not only is it harder in NYC than anywhere else in the country to sell your home without an agent, NYC homeowners also take the biggest commission hit because the average home value in NYC is around $2,000,000. Six percent in commissions may not sound too bad to average US homeowners where the average US home value is ~$250,000 but in NYC the typical broker fee of 6% equates to roughly $120,000 in fees!
The first thing to do if you want to sell your home without an agent in NYC is to not rush off and hastily post your home “for sale by owner” or FSBO on Zillow.
Table of Contents:
Step 1 - Do Not Tell the World You Are Trying to Sell Your Home Without an Agent in NYC
Hide Your Intentions
This may seem counter intuitive at first but is a common trap which first time FSBO home sellers often fall for. NYC brokers and agents can’t wait to see their daily list of new FSBO home sellers who they can cold call to pitch their services. It’s true, there are marketing companies that scour the New York Times, Zillow and StreetEasy for new FSBO sellers then sell these lists, complete with contact information, to brokers who are short on listings.
What’s more annoying, once you reveal to NYC brokers that you intend to try to sell your home without an agent, they’ll pretend to have a buyer and ask to preview your home with their buyer only to show up empty handed to pitch you in person on listing with them.
Unless you have lots of free time and the patience and kindness of Gandhi, it is best advised to not broadcast to all of NYC that you are attempting to sell your home without an agent. Another mistake NYC homeowners typically make is to reach out to their 5 different real estate agent friends when they’re thinking about selling. What usually ends up happening is they’ll feel guilty about not handing their business to one of their agent friends and the relationship becomes strained. This is even more likely the case when they then end up deciding to sell their home FSBO without an agent at all!
Step 2 – Engage Real Estate Agents Representing Home Buyers
Not all real estate brokers are bad for FSBO home owners attempting to sell their home without an agent in NYC. If you avoid brokers altogether your home will only receive the attention of a small subset of buyers. According to the National Association of Realtors “88% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001. Buyers who definitely would use same agent again: 73%.”
Why Use a Buyer’s Agent?
The main reasons for why home buyers typically use a broker is because there are just so many of them, many of them who are good salespeople, advertising that their services are free for buyers. Whether due to laziness, lack of knowledge or genuine lack of experience, most home buyers will agree to a “free option” of advice, search, scheduling and negotiation services of a buyers’ agent. What’s worse is the main real estate search websites are complicit in encouraging this inter-mediation.
If you’ve ever searched for a home on a major real estate search website you’ll notice that the only way to contact a homeowner is typically thru selecting a “featured” buyers’ agent to intermediate for you. The sad truth is these are large public companies focused on revenue, and revenue for them often comes from real estate agents’ advertising fees. And these agents are happy to pay up because there is so much money to be made off of homeowners.
To engage buyers’ agents you’ll need to offer them a comparable commission they’d receive from a traditional, for sale by agent, co-broked listing.
However, for a NYC homeowner looking to sell their home without an agent you’ll also have to tackle the issue of credibility of your commission offer.
Brokers will tell you that buyers’ agents prefer to deal with other brokers. There is some truth to that.
Think about it from their perspective. They can either show their clients a property which is properly co-broked in their local interbroker database by a listing broker they may have even worked with before, or they can show their client a property listed FSBO by a homeowner who likely hates brokers, is of unknown professional quality, whose listing is likely to be priced way too high, and who will likely take any opportunity to circumvent the buyers’ agent and go direct to his client. And this is assuming the FSBO seller has even offered a commission to buyers’ agents when she decided to sell her home without an agent.
Needless to say, a buyers’ agent won’t be showing their client a FSBO property that is not even offering any commission on the buy side; this is often why FSBO properties are classified as “off-market” because they are not receiving the attention of most buyers.
Contractually Co-Broke in the MLS
Fortunately, you can ameliorate this issue experienced by almost anyone looking to sell their home without an agent in NYC by having a well known FSBO listing service advertise your home on all major real estate websites and all relevant local inter-broker databases by submitting your listing details only once. You’d get the benefit of maximum exposure on over a dozen major real estate search websites such as Zillow, Trulia, StreetEasy and Brownstoner as well as the RLS and all RLS vendors such as OLR (Online Residential) plus brokerage specific databases like Taxi and Limo.
Best of all, you would be listed by a traditional listing agent, many of whom normally charge clients 6% for the privilege, so that your listing will receive the attention it deserves from buyers’ agents.
Should I Pay for Professional Photographs?
If you want to sell your home without an agent in NYC you’ll absolutely need to make sure your home is competitive versus professionally marketed agent listings. That means investing a few hundred dollars on professional real estate photography that will present your home in the best possible light to buyers.
It’s remarkable what can be done with modern photography, digital re-touching and virtual staging these days. If you’re snapping your listing photos with an old cell phone camera, be warned that your listing will be ignored by many buyers who are automatically turned off by low quality photos.
It’s well known by buyers that photos usually present the home in an extra flattering light. As a result they usually discount the home a little from the photos they see online. However, what does that mean for your cheap listing’s low resolution cell phone camera photos? If the home looks that bad in the photos, how bad is it really in actuality?!
As you would expect, being cheap and refusing to invest a few hundred dollars on professional photography for a million dollar home sale is one of the worst and most common mistakes that NYC FSBO sellers make.
What's the Easiest Way to Price My Listing?
If you’re too lazy to look at comparable properties and research past sales in your building and neighborhood to price your own listing, then we highly advise you to ask a few local real estate agents to give you a free home evaluation.
Like most NYC home owners, you constantly receive postcards from local real estate agents in the mail offering free home valuations and other useless garbage. It’s shocking how much paper and postage is wasted by these traditional agents blasting out postcards with nothing different or valuable to say.
However, since you are interested in properly pricing your property with the least amount of effort, consider calling a few of these agents to give you a free comparative market analysis of your property’s market value. Of course, the real price is you’ll have to likely meet them in person at your home and listen to them pitch you for a hour to two to list with them. Some of them may even be overly aggressive with sales coaches having taught them to “never leave an appointment without a signed listing agreement.” Just be nice and use their free pricing analysis.
Should I Pay for a Flat Fee MLS Listing?
If you’re looking to get the same exposure as a traditional agent then you’ll need to be listed in your local inter-brokerage database through a flat fee MLS listing.
Please be aware that there is no dominant MLS in NYC because the prevailing broker trade association in NYC is a private organization called REBNY. REBNY operates a similar inter-brokerage shared listings database called RLS (REBNY Listing Service) that functions much like a MLS does in other parts of the country.
Which MLS for NYC?
As a result, make sure you watch out for FSBO websites that claim to cover all 50 states and still be able to list you in your local MLS. Those websites are a recipe to waste up to $1,000 on a listing package that lists you in an irrelevant upstate MLS plus a handful of free websites that are irrelevant for the NYC market. For example, many of these “national” for sale by owner websites will list you on the NY State MLS plus Zillow, Trulia and a handful of other national real estate search websites which are not very relevant for NYC.
Only Hauseit will make sure your home is listed in RLS and all RLS vendors (i.e. OLR, Nestio, etc.) and brokerage specific databases (i.e. Taxi, Limo etc) as well as relevant local NYC real estate search websites such as StreetEasy and Brownstoner.
Does Openly Discounting Commissions Work?
No. Openly discounting commissions has been proven not to work over the past 100+ years. Yet surprisingly, Silicon Valley constantly funds new half-baked ideas proposed by outsiders who think the solution to lower real estate commissions is to loudly promote low commissions.
Unfortunately, over 90% of real estate transactions in NYC happen between a listing agent and a buyers’ agent. There are 30,000 licensed real estate agents in Manhattan alone and all agents need the cooperation of other agents to be able to close deals.
As a result, anytime someone begins loudly promoting discounted commissions, they immediately take a hit to their reputation and incur the resentment of other brokers. How awkward do you think the closing table will be if everyone around that table knows that one of the agents “cheated” and is doing it for free? It must also be embarrassing for the discounting agent who must feel and receive a ton of pressure from other agents.
Fortunately for home owners, the next generation of FSBO listing syndication companies like Hauseit are pioneering the Agent Managed FSBO approach. Home owners are paired through a 3rd party marketing company like Hauseit with traditional, full-service REBNY Member Firms who never openly discount and have their reputations intact.
As a result, the home owner receives an affiliated listing agent who has none of the reputation issues of a traditional discount broker whom other brokers all know and hate.
Disclosure: Hauseit and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).