The most important thing home owners need to realize when they try to sell For Sale by Owner in NYC is that they can’t avoid all brokers completely. If you try to exclude brokers and write “no brokers” or “principals only” on your FSBO web listing, you by default will turn away all buyers represented by agents. As it turns out, buyers’ agents represent over 75% of total buyer traffic, which is not surprising considering there are 30,000 real estate agents in Manhattan alone.
If you try to sell For Sale by Owner in NYC and either actively avoid or get ignored by buyers’ agents, your listing will receive exposure to just a small fraction of the total pool of buyers. This lack of exposure has ramifications for how many offers you may receive, the quality of these offers and whether or not you are able to find a buyer at all.
This lack of comprehensive exposure to buyers is why FSBO listings in NYC are generally considered to be ‘off-market.’ Ironically, being off-market (ignored by the majority of buyers) is not the intention of the majority of FSBO sellers in NYC, as most of them realizing that offering a commission to buyer brokers is important for marketing efforts.
The challenge for a FSBO seller in NYC does not stop once she or he realizes that it’s important to offer a competitive commission to buyer agents. This is because FSBO listings are usually ignored by buyer agents, even if the seller is offering a buyer broker commission. We explain all the reasons why in this article, but in short, FSBO sellers are notorious for being unrealistic, hard to deal with, prone to renegotiate the buyer agent commission and generally unreliable when it comes to paying out a commission at closing.
Why would a successful buyer’s agent take the risk of working with a FSBO seller when there are plenty of other traditional, agent-managed listings in RLS?
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If over 90% of home buyers start their search online, why do most buyers still choose to be represented? The fact that most buyers start their search alone on the internet these days is a prime reason why most homeowners decide to try to sell For Sale by Owner in NYC.
Most sellers are not fully aware that the overwhelming majority of buyers still end up submitting offers through a buyer’s agent, even if the buyer started her or his search online without a buyer broker or if the buyer found the listing without the assistance of a buyer agent.
You would think that the internet would be able to seamlessly connect buyers and sellers of real estate without a middleman, as it has for so many other industries already. So why do buyers’ agents still exist? The reason is quite simple if you step back and think about it.
Remember when we mentioned there were 30,000 real estate agents in Manhattan alone? Collectively, real estate agents represent the biggest sales-force on the planet, offering a customized, high-touch concierge service to buyers about to make a major life decision they usually have little experience with. Keep in mind that sellers in NYC customarily pay all commissions, including the fee paid directly to the buyer’s broker.
When a veteran buyer’s broker offers to send you great ideas that have just come to market, organize your open house tours for the weekend, submit offers, negotiate on your behalf and provide you with general, market and property specific advice for no out-of-pocket cost, no strings attached, it’s really hard to turn down. And keep in mind, the pitch may very well be made to you where it’s most effective, in person at a social event by an agent who may even be your friend.
Now perhaps it’s starting to make sense why savvy real estate search websites funded by equally savvy venture capitalists never seem to be able to eliminate real estate agents. Unfortunately for home sellers, buyers’ agents in NYC are here to stay for the foreseeable future. Barring the invention of highly capable, robotic AI with the full range of human emotions, it will be extremely difficult to eliminate buyers’ agents in the near future.
The commission model in NYC is changing, just not as drastically as one would hope.
The real estate commission model in NYC is not going from 6% to 0% since we’ve established that buyers’ agents aren’t exactly in danger of being made extinct. Instead, the model will be transitioning from 6% to 3%, and with additional reductions on the buyer side through buyer agent commission rebates.
Unfortunately for the sellers, in order to remain competitive with commissions offered in traditional For Sale by Agent listings, they will have to continue to offer 2-3% to buyers’ agents even if they are selling For Sale by Owner in NYC. If a seller offers less or nothing at all, inevitably buyers’ agents will steer their clients away from the listing, assuming they even decide to gamble on letting their clients see a FSBO listing in the first place.
The biggest savings for home owners trying to sell For Sale by Owner in NYC is on the listing broker side of the commission equation.
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Yes. It is absolutely critical that you have professional photographs taken if you want to sell your home for the highest price possible. After all, why would you skip on a $300 investment when you are likely selling a million-dollar NYC home?
Keep in mind that your home will be competing against professionally marketed listings by traditional brokers, all of which will have sparkling professional architectural photography showing off each listing in its best possible light. Don’t even think about snapping a few sloppy photos with your cell phone camera to save some pocket change. The risk is simply not worth it.
Photographs are a key driver of the first impression buyers formulate of your home. Why would you turn them off with sloppy unprofessional photos that your mom took with her flip phone camera? Low quality, unappealing photographs mean less traffic to your open houses and fewer showing requests. This is especially sad when you actually have a great home that’s otherwise properly priced!
Lastly, while it’s not required to professionally stage your home with high end sample furniture, you should at least make sure your home is clutter free and clean for the photos and during any showings. That last thing you need is for people to perceive your property as less valuable because of your random personal junk lying around which has nothing to do with the actual property for sale!
If your property is vacant and you are not planning on physically staging your home, you may also want to consider virtually staging some of your listing photos. Research has shown that virtually staged photos sell real estate faster than photos of vacant properties. Especially when it comes to the first photo of your listing, a virtually staged professional photo can have a dramatic impact on the level of traffic your property receives.
Should I Price My NYC FSBO Listing Lower Than the Market?
Yes. The primary reason you should list your home lower than market value is because you can undercut the asking prices of traditional sellers who have less flexibility on pricing due to the exorbitant commissions they’ve contractually agreed to pay. Furthermore, you have the freedom to list and sell at whatever price you choose without an onerous, traditional Exclusive Right to Sell Listing Agreement around your neck.
A traditional Exclusive Right to Sell Listing Agreement customarily binds a seller to pay 6% commission as long as a “ready, willing and able” buyer is found at the mutually agreed upon listing price. That’s why traditional agents always belabor the point that it’s critical you set a realistic, initial listing price. Their incentive is to make you agree to a listing price that has a good chance of finding at least one offer so they can legally compel you to pay them their traditional 6% broker commission!
In stark contrast, an Agent Assisted FSBO home seller has the benefit of testing market demand and receiving offers without being compelled to sell and pay a commission just because an offer is received at the initial listing price.
Save 2% On Your Home Purchase
Save thousands on your home purchase with a buyer agent commission rebate from Hauseit
Why Do Brokers Harass FSBO Sellers in NYC?
The reason that selling your home through a traditional For Sale by Owner in NYC listing is not advisable is that it’s blatantly obvious to the entire world, especially the 50,000 licensed real estate agents in NYC, that you are selling by yourself without professional assistance. Because your contact information and identity are readily available online, real estate agents view traditional FSBO sellers as one of the best sources of leads for new exclusive sale listings.
Selling your home through a traditional FSBO listing in NYC suggests that you are completely new to real estate and may not have an understanding at all of how the real estate market works. Therefore, we suggest you learn in advance the most common mistakes FSBO sellers make before you begin.
Real estate agents routinely try to break the confidence of traditional For Sale by Owner sellers by telling them common real estate agent lies in addition to truths such as the fact that they are not getting full buyer exposure because they are only listed on Zillow.
Really bad real estate agents will go so far as to lie to traditional NYC FSBO sellers that they want to bring a buyer to see the apartment, only to show up unaccompanied (without a buyer) solely to pitch the poor FSBO seller on their full-commission listing services. In some cases, a predatory broker will bring another agent to the seller meeting who actually pretends to be a real buyer.
Get a 2% Rebate When You Buy
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What Is the Typical Buyer Agent Commission in NYC?
While there is technically no standard real estate buyer agent fee in NYC, the most common range is from 2% to 3% of the sale price. Most listing agents will tell you that 3% is the gold standard and most common commission amount being offered. However, seeing 2.5% commission being offered to buyer’s agents is increasingly common.
While the commission amount being offered is at the full discretion of the seller, there are some risks associated with offering a commission less than 2%. Buyer agents may ignore your listing if they’re not happy with the commission amount being offered.
In some cases, buyer agents are brazen enough to contact the listing agent by writing emails saying “I can’t work for 2%” or “our firm policy prohibits working for anything less than 2.5% in that price range.”
How much commission you’re offering to buyer agents is especially important if you are competing with lots of other listings or if you are selling in a neighborhood or price point which is a buyer’s market. If, on the other hand, you’re selling a highly desirable unit, an argument can be made to offer a below average buyer agent commission.
A Full-Service Listing for 1%
Sell your home with Hauseit for just 1% commission.
How Much Are Seller Closing Costs in NYC?
Seller closing costs in NYC are between 8% to 10% of the sale price. Closing costs include a traditional 6% broker fee, combined NYC & NYS Transfer Taxes of 1.4% to 2.075%, legal fees, a building flip tax if applicable as well as building and miscellaneous fees.
Save up to 6% when selling through Hauseit’s Assisted FSBO Listing Service, or consider 1% Full Service for a traditional yet lower cost sale experience.
Disclosure: Commissions are not set by law or any Realtor® association or MLS and are fully negotiable. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided. Square footage numbers are only estimates and should be independently verified. No legal, tax, financial or accounting advice provided.
Hello,
I’ve read through all the helpful information on the Hauseit Site but I have a specific question and I’d be grateful if someone could help answer? Maybe the answer could also be helpful to others and added to your site as a helpful resource for others in the future who face a similar unique situation.
A Broker representing a buyer has targeted our unlisted Apartment in Manhattan to buy. If we agree on a price to sell, what commission fee do we need to pay the buyer’s broker given we do not have a broker as sellers?
Many thanks,
Gareth