How Much Commission Do Buyer's Agents Make in NYC?

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How much do buyer's agents making commission? We'll demystify this topic in the following video. My name is Chris at Hauseit, Hauseit is the largest For Sale by Owner and Buyer Commission Rebate company in New York City, established in 2014. If you have any questions about buying and selling a real estate and how you can save money on broker commission please check us out at https://www.hauseit.com

As you may have heard or seen on television, broker commissions to buyer's agent can be as high as 2% or 3% of the purchase price. This can be quite a stunning amount of money in a Metropolis like New York City where the average sale price is $2,000,000. However, commissions can be even higher. For example, in a weak market developers and sellers may wish to offer additional compensation other than the form of higher commission rates such as 4% to the buyer's agent or even one time special bonuses such as a $10,000 American express gift card paid at closing to the broker. Or there may be other similar incentives such as the commission being paid at contract signing instead of at closing as is customary.

However, before you get too excited or demotivated depending whether you're a potential buyer’s agent or a seller, let us tell you this: commission rates are indeed negotiable and there's no set standard commission rate nor is there any law or rule requiring commission rates to be 3% or more. You will typically see the higher commission rates that we've mentioned previously in for example Manhattan or other Real Estate Board of New York territory. The Real Estate Board of New York is the primary real estate trade association headquartered in Manhattan and it is the largest such trade organization in New York City.

It covers all of Manhattan much of Southern Bronx such as Riverdale much of Western Queens such as Long Island City, much of Northwest Brooklyn such as Brownstone Brooklyn, neighborhoods you've typically heard of this Boerum Hill, Park Slope and such and much of New York City in general. With that said, there are other MLS system in the area and other customary commission rates for different neighborhoods for example in Southern Brooklyn, commission rates are very different.

There is a different MLS system, the Brooklyn MLS that has a membership in deep South Brooklyn neighborhoods such as Bay Ridge and Gravesend. And these areas, total commission rates may be as low as 2 or 3%. Just an example, again it's negotiable always in each instance. No matter where you are between the seller and the listing agent. And just to give you a flavor of different areas, some areas such as Southern Brooklyn, it’s not customary to co-broke equally as you'd see in Manhattan and other Real Estate Board of New York territory.

So, for example, in Southern Brooklyn the total commission is 3% while listing agents customarily only co-broke 1% or less to buyer's agents. So, there you have it, New York City by itself is a tale of two cities and it’s the same nationwide. Total commission rates will vary depending on the region and what is customary for the region and as you can see even in New York City there are micro regions and micro climates depending on what commission rates customarily are and of course they're always negotiable. As a quick recap, how are these buyer's agents paid?

Say they're paid 3%, does the buyer have to come up with it? No. Fortunately, as we discussed before, the commission is always paid by the seller. The seller negotiates with the listing agent for a total commission rate which is then split typically equally, but it may not be split equally in some regions as we've discussed such as the Brooklyn MLS. But regardless the commission is typically split with the buyer's agent. In Manhattan for example this would typically be split 50/50 between the buyer's agent and the seller's agent. So, if the listing agent negotiates a 6% listing commission and the buyer has an agent, well, the commission is split 3% to the seller's agent and 3% buyer's agent.

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