Can a buyer’s agent in NYC ask a seller for more commission when negotiating an offer?
This is a common question we hear from many of our Hauseit Assisted FSBO customers here
in New York City.
So in this video, we’ll demystify the topic of buyer agent commissions in NYC and whether
or not they’re negotiable.
I’m Nick at Hauseit. In case you’re not already familiar with Hauseit, we are New
York City’s largest reduced commission platform for buyers and sellers. Check out our website
www.hauseit.com to learn how to save up to 6% when selling and save up to 2% when buying
here in New York City. So let’s get started!
First let’s start with the basics. Real estate commissions, including the percentage
commission offered to a buyer’s agent, are negotiable and ultimately determined by a
seller. Sellers customarily pay all real estate commissions in NYC, including the fee paid
to the buyer’s agent.
Traditionally, sellers in New York City have offered 3% to a buyer’s agent. In recent
years, 2.5% has also become a fairly common buyer agent commission figure. While 2.5%
and 3% are the most common percentages, a seller may be inclined to offer something
more than 3%, such as 3.5% if they’re highly motivated to sell, or something less than
2.5%, perhaps 2%, 1.5% or, in rare instances, just 1% to the buyer’s agent if they have
a really hot listing.
Once a seller decides what percentage commission to offer to buyer’s agents, this information
is listed in the broker database and visible by buyer’s agents. In New York City, Hauseit
Assisted FSBO Listing are included in the REBNY RLS broker database as well as the OneKey
MLS. So any buyer’s agent who is a member of the Real Estate Board of New York, the
Long Island Board of Realtors or the Hudson Gateway Association of Realtors can easily
look up the buyer agent commission for a listing.
So although the buyer agent commission amount is negotiable and set by sellers, it’s decided
upon in advance before going live with a listing.
Here’s where it gets interesting. Sometimes, an aggressive buyer’s agent may submit an
offer and include a buyer agent commission amount in the offer which is higher than the
percentage commission listed in the RLS or OneKey MLS for a listing. For example, let’s
say you’re offering a 2.5% commission to buyer’s agents. The buyer’s buyer may
include a commission of 3% in their offer terms.
Now this is a tricky situation, because you already decided what % commission to pay to
a buyer’s agent. And presumably the buyer’s agent has already looked up your listing in
the database, so they’re most likely aware that you’re offering less than 3%, which
is probably why they included language asking for a 3% commission in the offer.
So in essence, what’s happening is that a buyer’s agent has rejected your offer
of commission and demanded something higher as part of the offer. Now this is somewhat
murky and ethically questionable, because it’s unclear whether or not the buyer is
aware that her or his agent is asking for more commission. And if the buyer is not aware,
it’s highly unethical for obvious reasons.
But at the same time, the buyer’s agent has influence over this buyer, and you probably
want to negotiate and sell your home. So what do you do?
Well, the first thing you should do as the seller is respond to the offer in writing
and remind the buyer’s agent what % commission you are paying, and the fact that the commission
is listed as such in the RLS Broker Database or the OneKey RLS.
Some buyer’s agent may simply play dumb, say they didn’t realize, and go along with
the actual commission % you’ve offered without causing any further issues. Problem solved.
However, from time to time, extremely aggressive agents may push back and demand that you pay
them, say in this case, the full 3% commission. At this point, it’s technically your decision
as the seller as far as whether or not you’ll agree to pay more commission than what you
originally agreed to offer.
If you have a hot listing, other offers or perhaps an offer in the pipeline, you have
leverage to push back and simply decline the request to pay a higher buyer agent commission
percentage.
We suggest keeping all discussions of the buyer agent commission amount in writing,
for obvious reasons. And if it seems like a negotiation is falling apart solely because
the buyer agent is demanding a higher commission, you may want to ask them, in writing of course,
to confirm that their buyer is fully aware of the fact that the buyer’s agent is trying
to negotiate a higher buyer agent commission amount as part of the offer terms.
In short, it’s very rare for a buyer’s agent to try and negotiate a higher buyer
agent commission for a listing which already has a buyer broker commission amount listed
in the RLS or the OneKey MLS. So you’re quite unlucky if you happen to cross paths
with a buyer’s agent who tries to play games with the buyer agent commission. Just remember,
as the seller, you’re in the driver’s seat, and you don’t ever have to agree to
pay a higher buyer agent commission percentage than what you originally agreed to.
We hope you enjoyed this video, and if you did, please like, subscribe and leave us a
comment. We’d greatly appreciate it. I’m Nick at Hauseit, and we’ll seen you on the
next video!