It’s far easier to sell an apartment in NYC without a broker than most real estate agents will care to admit. With that said, before listing your home FSBO on the internet it’s important to understand why brokers are relevant even for sellers who want to avoid paying a 6% broker commission.
New York City has an entrenched two-agent real estate broker model, which means that most deals have two agents involved: a listing agent representing the seller and a buyer’s agent representing the buyer. Over 75% of buyers in NYC work with a buyer’s agent as a result.
If you do not offer commission to a buyer’s agent as a seller, you will effectively squash the size of your potential pool of buyers to just 25% of the total buyer base. This has ramifications for the amount of demand you receive, the number of potential offers you receive, your sale price, how quickly you sell and whether you sell at all.
Yes, but it’s a complicated topic. Selling an apartment without a listing agent means that your marketing exposure will be limited to public, real estate websites only. As a FSBO seller without a listing agent, your apartment will not be listed in REBNY’s RLS broker database.
RLS is used by buyer agents in NYC to search for and send listings to clients, and only brokers who are members of REBNY are allowed to list apartments in RLS. Each apartment listed in RLS has a contractual buyer agent commission amount, so buyer agents never have to worry about being stiffed on commission when they send an RLS listing to a buyer client.
If you simply list FSBO online, the vast majority of buyer agents will not see your listing. This is because most buyer brokers search for and send listings using an RLS interface, such as OLR or RealtyMX.
Even if a buyer agent stumbles upon your listing on a public real estate search site such as The New York Times, he or she may have reservations about sending a buyer client to view your home due to the risk of not being paid a commission.
Unlike with RLS-listed broker apartments, there is no contractual protection for buyer agent commission with a FSBO listing. Even if you write ‘buyer brokers protected’ or ‘2.5% buyer agent commission’ in your listing description, this is an inadequate level of assurance for a buyer agent who is used to contractually guaranteed commission amounts being listed in RLS.
Even if a buyer agent is tempted to show your listing to a client, most agents won’t want to waste time making you sign a one-time showing agreement, especially if there are other suitable apartments listed in RLS. Time is money, especially in NYC real estate when the most successful buyer brokers operate entirely on commission.
Furthermore, many FSBO sellers think it’s normal and okay to try and ‘negotiate’ the buyer agent commission depending on the offer price. This is hardly customary in NYC, where all RLS-listed apartments have a pre-determined, fixed commission percentage which is offered to buyer brokers regardless of the offer price.
Just think about it: why would a buyer agent agree to negotiate his or her commission on a listing with a FSBO seller when the apartments in RLS have contractually protected and locked-in commission amounts being offered?
The first step in selling an apartment without a broker in NYC is to educate yourself on the sale process. You can learn about each step in the sale process by visiting our Agent Assisted FSBO Seller Training Portal. Selling an apartment in NYC can be quite complicated, especially if you’re selling a co-op.
Once you’re familiar with the process, the next step is to choose your level of marketing exposure. If you’re comfortable missing out on the 75% of buyers who are represented, you can simply list your home FSBO online. Keep in mind that traditional FSBO sellers in NYC are routinely solicited by brokers and fed lies and misinformation in an attempt to persuade sellers to hire a traditional, 6% listing agent.
If you’d like full-exposure to direct buyers as well as buyers who are represented, you can list in RLS and everywhere online with an Agent Assisted FSBO. This approach allows you to save up to 6% in commission if your buyer is unrepresented while also giving you full exposure to buyers with brokers.
The most common range for buyer agent commission fees in NYC is between 2% to 3%. While it’s entirely your decision how much commission to offer, it’s important to understand that the commission figure is a key driver of demand for your listing.
Since approximately 75% of buyers in NYC are working with agents, offering too low of a commission can have an outsized impact on how much traffic your listing receives. How much commission you should offer ultimate depends on the amount of competition you anticipate from fellow sellers.
If you are selling a generic 1 bedroom apartment in a 50 story condo building in Midtown or FiDi, chances are there are dozens if not hundreds of apartments competing against yours. Why would a buyer agent push aggressively for your listing if you are offering a significantly lower commission than a comparable apartment that a buyer is equally interested in?
On the other hand, you may be able to offer a lower buyer agent commission without materially impacting buyer demand if you have a unique apartment and there is very little competition from other listings.
Yes and no. If you list ‘traditional’ FSBO by posting a few ads online, selling in NYC becomes quite difficult since you’ve essentially cut out 75% of the buyer base comprised of represented buyers. Furthermore, traditional FSBO sellers are routinely harassed by brokers without buyers are simply looking to find more seller clients.
The lack of exposure combined with time-wasting harassment results in a high failure rate for traditional FSBO sellers in NYC.
Assuming you are listed on RLS and comprehensively marketing your apartment, selling in NYC becomes a much easier proposition. With that said, the sale process is by no means automatic nor is there any guarantee of outcome.
Common reasons why Agent Assisted FSBO sellers fail is due to unrealistic pricing and poor photos and/or no floor plan.
Often times sellers have limited availability to show, and this reduces the amount of appointment traffic. Other sellers are not familiar with how to negotiate, how to follow-up with interested parties or the correct demeanor and attitude when emailing and speaking with buyers and buyer agents. Other Agent Assisted FSBO sellers simply have unrealistic expectations for how long it takes to sell an apartment in NYC, even with a traditional 6% listing agent.
Marketing exposure aside, the most successful listing agents in NYC are persistent and excellent salespeople, seasoned negotiators and experts in board package preparation. Unless you’ve done your homework on each of these topics, it’s unfair to assume or expect that you will have the exact same sale outcome as a seasoned listing agent even if your listing has the same marketing exposure.
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).