How Commissions Work for New Developments in NYC
There are generally more rules around how commissions are paid to buyer’s agents for new development purchases in NYC, and sponsors are generally more strict in terms of requiring buyer’s agents to register and/or attend showings with their clients. This may present issues for buyers wishing to save their buyer agent time by attending viewings by themselves.
One positive development is that the Real Estate Board of New York (REBNY) released the standardized REBNY Universal New Development Cobrokerage Agreement in October of 2019, which will smooth the process for brokers representing clients on new construction purchases. Previously, brokerages needed to sign a custom co-brokerage agreement with each new development project which resulted in unnecessary legal review and potential negotiation time.
Buyer’s Agents Must Attend Showings With Their Clients
New development listing agents are much more strict about buyer’s agents being present for any showings vs regular re-sale listing agents. Whereas in a regular re-sale listing, the listing agent might be alright with the buyer’s agent not attending the showing if the buyer’s agent has a valid excuse or if the buyer’s agent has a good relationship with the listing agent, for a new development the listing agent will be much more likely to enforce the buyer agent’s attendance.
As a result, in order to not seriously jeopardize your chances of receiving a commission rebate, you’ll need to work with a traditional buyer’s agent through Hauseit who will be able to schedule and accompany you on showings.
This means many “one man shops” offering a commission rebate where the sole proprietor refuses to or simply doesn’t have time to go to any showings won’t work for a new development purchase in NYC.
New development listing agents can contractually enforce attendance
There are multiple sections of the now standard REBNY Universal New Development Brokerage Agreement which give legal backing to a listing agent’s demands that the buyer’s agent attends showings and/or officially registers his or her client.
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Disclosure: Hauseit and its affiliates do not provide tax, legal, financial 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, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).