Do buyers pay realtor fees in NYC? | Realtor Commission NYC
There’s a lot of confusion around this question: Do buyers pay realtor fees in NYC? In this post, we’ll dive into whether buyers are responsible for any fees, and why working with a buyer’s agent can benefit you throughout the buying process. Here’s everything you need to know about realtor commission NYC.
Understanding how realtor commissions work can clarify this for prospective buyers and help you make the most informed decisions when choosing an agent.
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How It Works: Realtor commission nyc
In a typical real estate transaction, the agents’ commission is a percentage of the property’s sale price, usually around 5-6% in NYC. Generally, this commission is split between the buyer's agent and the seller's agent, incentivizing both parties to work toward a successful transaction.
Who Pays This Commission?
In NYC, it’s traditional for the seller to cover the entire commission. That means if you’re the seller, you’ll pay the fees for both your own agent and for your buyer’s agent.
While this is the norm, there are some exceptions, which we’ll cover later.
Do Buyers Pay Realtor Fees in NYC?
The answer is straightforward: No, buyers typically do not pay realtor fees in NYC. That makes this a “no-cost” service to you as the buyer in most situations. That’s because the commission is usually covered by the seller as part of the sale agreement. This commission structure can vary by market, but in NYC, it’s customary for the seller to bear this cost.
When you hire a buyer’s agent, you’re entering into a mutually beneficial agreement where they represent your interests in finding, negotiating, and closing on your property. This agent represents your interests as the buyer even though they are paid through the seller’s commission.
Why the Seller Pays the Realtor’s Commission
The practice of sellers covering agent commissions in NYC is rooted in both tradition and practical considerations. This system benefits both buyers and sellers, as it provides buyers with no-cost access to professional representation and motivates agents to facilitate a smooth transaction.
This structure allows sellers to reach a larger pool of buyers by incentivizing buyers to view a property without having to worry about pay their agent’s fees. Since sellers are ultimately in control of the price at which they list their home, they can keep the payments to the agents in mind.
Can you negotiate realtor fees in NYC?
Yes, you can negotiate realtor fees in NYC, but the extent to which they are flexible depends on various factors, including the property, market conditions, and the agent's policies.
Typically, real estate commissions in NYC range from 5-6% of the property’s sale price, with this amount being split between the seller’s agent and the buyer’s agent. Since this is an industry standard, many agents work within these rates, but some may be open to negotiation.
Here’s what to consider when negotiating realtor fees:
Market Conditions: In a slower market where properties take longer to sell, agents may need to put substantially more money and effort toward selling a property, so may be less likely to cut their compensation.
Property Value: For high-value properties, agents sometimes agree to lower their commission percentage since the total amount earned remains substantial.
Agent’s Policies and Track Record: Highly experienced agents with a strong track record and a niche market have little incentive to lower their fees. However, newer agents or those eager for more clients may be more open to negotiation to earn market share and build their portfolio.
Scope of Services: If you’re open to a limited-service agreement (e.g., reduced marketing efforts or fewer open houses), some agents may agree to lower fees in exchange for a reduced scope of work.
When negotiating, be transparent about your expectations and respectful of the agent’s expertise. If you’re a seller be mindful that a lower commission might impact the level of service and marketing you receive, so weigh any savings against the value a skilled agent can bring to your transaction.
Benefits of Working with a Buyer’s Agent
Working with a buyer’s agent in NYC brings numerous advantages. Here’s what you can expect from a good buyer’s agent:
Access to Off-Market Listings: Many properties in NYC are never listed on public platforms. Buyer’s agents often have access to exclusive off-market listings, giving you a head start in a competitive market.
Negotiation Expertise: A skilled agent knows the ins and outs of negotiation, helping you secure the best price and terms possible without jeopardizing your chance of closing the deal.
Regulatory Guidance: NYC’s real estate market has unique regulations and processes, from co-op board approvals to zoning issues. A buyer’s agent will navigate these hurdles with you.
Neighborhood Knowledge: Each neighborhood in NYC has distinct characteristics. An experienced buyer’s agent will guide you to areas that match your lifestyle, preferences, and budget.
Emotional Support: Buying in NYC can be stressful, especially with high stakes and competitive offers. A buyer’s agent provides both expert advice and reassurance throughout the process.
Common Myths About Buyer’s Agents and Commissions
Let’s dispell some common myths surrounding buyer’s agents and realtor commissions in NYC.
Myth #1: Using a Buyer’s Agent Costs More
Some buyers worry that working with an agent will increase their costs, but in NYC, the seller typically covers the commission. In most cases, you can get the benefits of a buyer’s agent expert guidance at no extra cost.Myth #2: Going Directly to the Listing Agent Will Get You a Better Deal
Some people think they can get better deals by forgoing a buyer’s agent; they think they either will save themselves the cost of their own agent, or that they’re saving the seller money on agent commission. Neither of these assumptions is generally true.
Buyers don’t typically pay for their own agents, so there’s no savings there.
Additionally, the total commission paid by the seller may not change at all based on the number of agents involved. Listing agents have clauses in their contracts with the seller stipulating how much they will receive if someone tries to buy the apartment on their own. These contracts will have been signed long before a buyer even makes an offer. The seller likely won’t be saving much - if any - money, even if someone comes direct. A direct buyer is likely just making both the seller and the listing agent more money. The seller can secure a deal on better terms since there’s no expert fighting for the buyer’s interests, and the listing agent will take home a higher commission.Myth #3: It’s Easy to Navigate NYC Real Estate Without an Agent
With online listings and open houses, some buyers feel confident going it alone. While the choice is always up to you, working alone will mean you risk missing critical details or making costly mistakes. A buyer’s agent brings years of local industry and market knowledge, access to inside information, and can protect you from common pitfalls.
Scenarios Where Buyers Might Pay a Fee
While it’s rare, there are a few situations where a buyer might be responsible for a fee:
Stingy Sellers: Some sellers may chose not to offer buyer’s agent commission. However, your buyer’s agent will still need to be paid for all the services they’ve provided you. They will do their best as your advocate to get the money from the seller. However, if a seller truly will not budge and you want the apartment, you may have to pay the difference between what the seller is offering and the compensation specified in your buyer’s agent agreement.
PRO TIP: You can always chose not to move forward with a deal if the seller will not cover your agent’s full compensation.
Competitive Markets: Occasionally, in fiercely competitive markets or for specific off-market listings, buyers might agree to pay a portion of the commission. This arrangement is unusual but can sometimes be a negotiating tactic to help a buyer’s offer stand out.
The Bottom Line: Realtor Commission NYC
To recap, buyers in NYC generally do not pay realtor fees. The seller’s commission typically fully covers both agents, so working with a buyer’s agent comes at no direct cost to you. By partnering with an experienced agent, buyers gain access to industry insights, negotiation skills, and guidance through NYC’s intricate real estate market.
Having the Right Support
A buyer’s agent not only represents your interests but also adds value through market knowledge, negotiation skills, and guidance through every step of the process. Best of all, in most cases, the cost of this representation is covered by the seller.
Whether you're a first-time buyer or a seasoned real estate investor, partnering with a buyer’s agent can make the entire experience smoother and more successful. If you're considering a home purchase in NYC, don't hesitate to consult a trusted real estate professional to get started on the right foot.
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If you’re on your journey to buying a home in New York, I’d love to help guide you through the process. My name is Kristen Shaker, and I’m a licensed Real Estate Salesperson in New York City. Whether you’re just starting your search or ready to make a move, you can contact me to get started here. Let’s make your NYC real estate dreams a reality! And don’t forget to download my FREE Ultimate Buyer’s Guide — it’s packed with valuable insights and tips to help you make the best decision for your future.
