For Sale By Owner Fees in NYC
What are For Sale By Owner fees in NYC? Understanding closing costs in NYC will be critical to home owners before they begin their home sale process.
For Sale By Owner fees in NYC are dramatically reduced versus a traditional sale. This is because you will avoid paying the standard 6% commission to sell your home with a traditional broker. Since most people have a mortgage, 6% of the sale price translates to almost a third of most people’s total home equity.
Assuming 80% loan-to-value on your mortgage, your home equity is 20% of the sale price. Therefore, 6% of the sale price in broker commissions alone is almost one third of your total home equity!
So what are For Sale By Owner Fees for marketing your property?
This depends on whether you are pursuing a traditional do it yourself approach or whether you are smart enough to consider a flat fee MLS listing to supplement your buyer exposure.
For Sale By Owner fees — traditional approach
Just because you’re forgoing any broker assistance whatsoever does not mean your marketing will be free. You will still have to pay to advertise on popular internet search websites, hire a professional photographer and pay for a new floor plan.
As of this writing, it costs $599 to list For Sale By Owner on StreetEasy for 4 weeks. The cost jumps to $799 if you want your listing to be “featured” on StreetEasy during the 4 weeks. The New York Times charges $130 for a 14 day online advertisement. The cost jumps to $280 for 28 days plus a small blurb in their Sunday print edition.
As you can see, each real estate search portal will have their own requirements and costs and you will have to individually list on all of them if you want complete exposure to all potential unrepresented buyers.
Under the traditional approach, there will unfortunately not be a way for you to engage buyer’s agents and the 90% of buyers who are represented by agents. Your marketing will be limited to the 10% of buyers who do not end up working with a buyer’s agent. Traditional For Sale By Owner listings are therefore considered “off-market” listings.
For Sale By Owner fees — agent assisted approach
Just because you are getting access to the RLS through a flat fee broker does not mean you are giving up control of your home sale process. Not only will you receive all inquiries from brokers and buyers, you will receive the same level of attention from represented buyers as you would have if you paid 6% to a traditional broker.
We advise home sellers to sign up for a flat fee RLS listing which not only will give them the full cooperation of buyers’ agents but will also be cheaper than listing individually on websites like StreetEasy. For example, Hauseit’s List Your Home Online product only costs $399 for 3 months of advertisement which includes StreetEasy, Zillow, Trulia, Brownstoner and more!
Be careful of MLS listing packages from websites that claim to cover the entire, continental U.S. and promise to list you in your local MLS wherever you might be. These websites are extremely expensive, costing up to $1,000 per listing package and completely irrelevant for the unique NYC market. How can they list you in your local MLS when NYC does not have a primary MLS to begin with?
Only Hauseit affiliate brokers will list you in RLS (REBNY Listing Service), which is the equivalent to the NYC Multiple Listing Service. REBNY is the dominant broker trade association in the NYC area with over 16,000 current members.
Since you are choosing to engage all buyers whether they are represented or not, you will need to offer a commission to buyers’ agents. You are only obligated to pay this commission if you choose to sell to a represented buyer. You can choose to sell to an unrepresented buyer or do nothing at all and never owe commission.
What are standard fees for buyers’ agents?
While there is technically no standard real estate buyer agent fee, from our affiliate brokers’ experience they often range from 2 to 3% of the sale price. Our affiliates have mentioned that 3% is the most common buyer agent fee as it is 50% of the “standard” 6% commission the seller pays. However, seeing 2.5% commission on offer to buyers’ agents is not uncommon and our affiliates never receive complaints with listing 2.5% in RLS.
It is unfortunate but once you offer 2% commission in RLS, our affiliates have received a lot of push-back from buyers’ agents. Agents have been brazen enough to write emails saying “I can’t work for 2%” or “our firm policy prohibits working for anything less than 2.5% in that price range.”
Can you negotiate the buyer’s agent commission?
Not after it’s been listed in RLS and a buyer’s agent has already inquired on your listing. However, you are free to change the commission offered in RLS at any time which will affect new future showings.
With that said, just because you can’t negotiate a commission already listed in RLS, that doesn’t prevent you from negotiating on the price. You could always counter with a higher price to a represented buyer to make up for the commission which you will be paying!
What are For Sale By Owner fees for closing?
For Sale By Owner fees at closing will be the same as everyone else except for the reduction in broker commission paid. That means even though you’ve cut down on closing costs dramatically, you will still need to pay New York City and State transfer taxes, co-op flip taxes if any as well as your real estate attorney fees and miscellaneous other closing costs.
However, considering that attorney fees usually consist of a one-time flat fee of a couple thousands of dollars, most of these other costs will be minuscule compared to the 6% broker commission which you’ve just saved!
For a complete breakdown of real estate closing costs in New York City, please consult our comprehensive closing costs guide!
Don’t have time for this?
Consider our traditional, full-service Agent Managed Listing service for only 1% commission. You’ll be paired with a top-rated, REBNY Member Firm who will provide you with all the convenience and benefits of a traditional listing with a completely non-traditional commission rate.
Disclosure: Hauseit and its affiliates do not provide tax, legal 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 or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
