Broker Sales Commissions

Antitrust laws dictate that there can be no “standard” or “required” commission—in other words, commissions are legally negotiable. That being said, agents are not required to accept less than what they ask for, which, in Manhattan is typically 6% (split two ways if another broker brings in a buyer). Some agents may agree to reduce their commission to 5% or even 4% if the eventual buyer is not represented by a broker. Anything less than 5% is very rare in Manhattan except in higher price ranges (multi-million-dollar properties).

Keep in mind that getting the seller to agree to a 5% commission is not necessarily a good thing, because it reduces the amount the buyer’s broker will receive in a “co-brokered” transaction from 3% to 2.5%.  (That may not sound like a lot expressed as a percent, but on a $1 million sale, it’s $50,000.) If an agent is taking a buyer to see ten properties that are offering a 3% co-broke, that agent might not even bother to show the one that only offers a 2.5% co-broke.

Listing Broker: The broker will ask the seller to sign a contract authorizing the broker, and one or more sales agents working for the broker, to offer the property for sale at a certain price – the “asking price” -- and will describe the commission arrangement. The seller is responsible for the entire commission. The listing broker will help set the asking price, communicate with prospective buyers and their brokers — called buyer’s brokers -- and generally help through the contracting, inspection, and closing process. To perform these functions, the listing broker often receives detailed information about the property contained in appraisals, inspection reports, CMA’s, and surveys, and becomes familiar with the condition of the property.

Buyers Broker: A broker who represents the buyer and has a fiduciary responsibility to the buyer in finding a property that meets their needs on all levels (price, location, size, condition, style and living quality). A buyer broker should look to find the best value for their client and negotiate on their behalf during the bidding process to get the lowest possible purchase price from the seller. There are NO FEE’S to the buyer client for the services of a Buyer Broker as the commission is paid by the SELLER and then split with the Seller’s Broker at closing.