Selling a home For Sale By Owner in Manhattan has traditionally been an impossible feat. Despite the rise of popular internet real estate search websites like StreetEasy, the average real estate commission in NYC has stayed stubbornly high at 5-6% of the sales price.
How could this be? Shouldn’t Manhattan real estate sell itself?
It’s true that Manhattan property values are among the highest in the world with unparalleled demand from international investors and local families alike. Furthermore, because of the close proximity of Manhattan properties to each other and the ease of accessibility around NYC, selling an apartment For Sale By Owner in Manhattan should be easier than ever.
After all, if you price your home correctly and hold open houses on the weekend, shouldn’t you be able to sell For Sale By Owner in Manhattan within a week?
Unfortunately, the ugly truth to having the developed world’s highest real estate commission rates is intense competition and self-interest from the real estate brokerage community to keep commission rates high. Because the typical Manhattan home sells for over $2 million as of 2016, the typical 6% real estate commission charged to sell a home equates to over $120,000.
Having commissions from one deal worth more than many people’s annual salaries, combined with shows like Million Dollar Listing glorifying the lives of high profile real estate brokers have kept the numbers of licensed real estate agents in the city extremely high.
As of 2016, there were over 50,000 licensed real estate agents in NYC. Not surprisingly, 30,000 of them are based in Manhattan. Not surprisingly, because there are only roughly 5,000 real estate transactions in NYC per year, 90% of real estate deals are done by the top 10% of all real estate agents in NYC.
What do high numbers of real estate agents in NYC have to do with increased difficulty in selling a home For Sale by Owner in Manhattan?
Remember that For Sale By Owner sellers are easy to identify on websites like Zillow or StreetEasy and therefore are one of the most common client prospects for real estate agents to solicit. In fact, there are lead generation companies who scrape the web for the contact information of traditional For Sale By Owner sellers in Manhattan and Brooklyn to sell to real estate agents.
What happens when you have 30,000 hungry agents with few deals to go around?
You guessed it. These 30,000 licensed real estate agents in Manhattan will all be soliciting the few, unlucky For Sale By Owner in Manhattan home sellers who unwittingly revealed their email addresses and phone numbers online.
This means hundreds and hundreds of cold calls from junior real estate agents with barely a high school education who have been trained by their brokerages to convert For Sale By Owner in Manhattan sellers into full commission clients through a mixture of fear and misinformation.
What kind of common real estate agent lies will you hear?
The moment you attempt a traditional FSBO approach to sell your home, you will be inundated with information from agents without buyers attempting to solicit you to become a full commission listing client. Some of what they tell you will be true (what are the top 3 reasons FSBO sellers fail?) while some of what they whisper to you will be blatantly false (what are the most common real estate agent lies?).
The one true thing these agents will tell you is that as a traditional FSBO seller you are avoiding the 90% of buyers who are represented by agents because your listing is not listed in the RLS (REBNY Listing Service), which is the equivalent to the MLS (Multiple Listing Service) broker databases prevalent in other parts of the country.
So how do you sell your home for sale by owner in Manhattan?
All of the positives we mentioned at the beginning of the article will make your home relatively easier to sell versus a home in Middle America. There is unparalleled demand for NYC real estate among the international community as a store of value. Larry Fink of BlackRock once compared NYC real estate to gold as a store of wealth. Moreover, the fact that properties in Manhattan are so close and easily accessible to each other means holding an open house on a weekend will attract a lot of open house visitors from purely cross-over traffic alone.
But being able to monetize these positives means you need to get around the toll booth chokepoint that the real estate brokerage community has set up. Primarily, you need to be able to make buyer agents comfortable in showing your listing to their buyers and you need to avoid harassment from the 30,000 licensed real estate agents in Manhattan.
The only way to do this is through a traditional, full-service real estate broker who does not have the negative reputation associated with a discount broker. Because 90% of all transactions are done between two agents, all agents need the cooperation of other agents in order to close deals. Therefore, because discount brokers are traditionally loud about discounting commissions and attacking the brokerage community, they immediately develop a poor reputation among the wider brokerage community.
So how do you find a traditional real estate broker who will discreetly discount their commission?
The only way to fully access all buyers is through a traditional, full-service REBNY Member Firm who has agreed to discreetly provide discounted services through Hauseit.
All of our affiliates are locally based (Manhattan for NYC customers), traditional real estate brokerages who are also full REBNY Member Firms. They have full commission clients but have agreed to take on additional discounted listings primarily to enhance their prestige and to increase the chances of receiving additional client referrals.
As a result, Hauseit customers are receiving the steal of a lifetime. These traditional brokerages have discreetly broken ranks with the industry in discounting commissions because most of the industry acknowledges that 6% in commission to sell is much too high, yet they are able to do so discreetly without letting this on to the wider brokerage community.
What about luxury homes priced over $10 million?
Selling a luxury apartment in New York City priced over $10 million is no different than selling your average $2 million NYC home. In fact, it’s often easier to transact in luxury properties in NYC because luxury brokers are typically more professional, or at least more responsive. Selling a luxury home For Sale By Owner in NYC is easy to do.
Buyers’ agents will be a lot more respectful if they understand that you’re already off limits because of your listing with our partner brokers, and they’ll be much more appreciative of the commission co-broked to them in REBNY’s RLS.
To get started, submit your listing details and complete your purchase of our flat fee MLS listing product or inquire about our Full Service for 1% listing service. Make sure to order professional photographs as well as a freshly drawn floorplan. Lastly, make sure you or your full service listing agent are available to show the apartment at all times. That’s really it!
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).