What’s the Average Real Estate Broker Commission in NYC?

The average real estate broker commission in NYC is between 5% to 6% of the sale price. Broker fees in NYC are high relative to the rest of the country. In fact, real estate commissions in NYC are some of the highest in the world. They’re more than three times what you’d pay to sell a comparable apartment or townhouse in London.

What Is the Average Manhattan Real Estate Agent Commission Rate?

Why Are NYC Real Estate Fees so High?

Are NYC Real Estate Broker Commissions Too High?

How Much Are Seller Closing Costs in NYC?

The average Manhattan real estate commission rate is between 5% to 6% of the sale price. While real estate commissions are more negotiable in other boroughs, broker fees in Manhattan remain elevated.

One possible explanation for why real estate commission are high in NYC is the fact that the vast majority of units for sale are co-ops. Selling a co-op is more difficult than selling a townhouse or a condo due to the added complexity of managing the board application process.

It’s common for listing agents to leverage their expertise in preparing board packages when attempting to justify a 6% commission rate. However, this argument does not fully make sense because it’s just as complex to handle the co-op board application process for units in Brooklyn or Queens.

Another possible explanation for high commission rates in Manhattan is the fact that most New Yorkers are extremely busy and simply don’t have time to shop for agents and/or negotiate down commission rates. Furthermore, New Yorkers are used to overpaying for just about everything when compared to what people pay in other parts of the country. For many, paying 6% is just a foregone conclusion and the cost of doing business in NYC.

There are a ton of reasons why real estate commissions are so high in NYC. For starters, there are typically two agents on each deal compared to just one who represents both buyer and seller in London. Therefore, a total commission of 6% is usually split equally between the listing agent and buyer agent (meaning each earns 3%).

Sellers typically agree to pay a fixed commission at closing even if a buyer is unrepresented. If a buyer does not have a buyer’s broker, the listing agent usually collects the entire commission. Because sellers foot the commission bill for buyer brokers, most buyers in NYC have a buyer’s agent since it’s technically free and built into the sale price.

Because most buyers have agents, sellers are therefore pressured to offer high commissions to buyer agents in order to attract buyers. This chicken or the egg causality dilemma is very successful in keeping commissions high and ensuring the continued relevance of the 50,000 + agents working in NYC.

Fortunately, there are more reduced commission options today for sellers than there was just 5 years ago. While traditional FSBO remains a popular option, its shortfalls remain. For starters, FSBO sellers cannot list their homes in RLS, the inter broker database used by buyer brokers to search for and send listings to clients.

Because over 75% of buyers have agents, a traditional FSBO seller who posts his or her home online does not have exposure to the majority of buyers. This can be solved by listing via Agent Assisted FSBO, also called a NYC Flat Fee RLS Listing Package. For a one-time flat fee, you can list your home in RLS and everywhere comprehensively online. If a buyer is unrepresented, you pay 0% commission. You’d only pay a commission if the buyer has a buyer agent, at which point you’d pay them whatever commission you decided to list in RLS.

The downside of listing via Agent Assisted FSBO is that you need to be available to manage the sale process, including handling open houses and private showings. For some busy New Yorkers, this is simply a non-starter due to work and family commitments. Many sellers have found Hauseit’s 1% Full Service Listing Fee option to strike a fair balance between savings and convenience.

Yes. There’s no question that broker commissions in NYC have reached a tipping point. Better technology and advances in listing syndication platforms have made it easier than ever for listing agents to comprehensively market properties at the click of a button.

In some cases, sellers hire listing agents in NYC and agree to pay 6% only to see their property sell in a matter of weeks. While it’s great to sell quickly, it begs the question: should anyone receive tens of thousands of dollars for a few weeks of work? Just think about it: you list a $1m apartment and agree to pay 6%. If a listing agent finds a buyer in 3 weeks, wouldn’t it have been worth it for you to try and sell on your own instead of paying someone the equivalent of $20,000 a week?

On a more serious note, many sellers in NYC agree to pay 6% simply because they’re terrified of making a mistake when selling. This fear is largely driven by the fact that listing agents most sellers interview are experts at feeding sellers with doubts and misinformation in an effort to make sellers think paying anything less than 6% (or selling on your own) will guarantee failure.

Seller closing costs in NYC are between 8% to 10% of the sale price. If we exclude the 6% commission from this estimate, other closing costs are between 2% to 4%. The largest closing costs outside of broker fees are the NYC and NYS Transfer Taxes. These are roughly 1.425% for properties below $500k and 1.825% for properties which sell for more than $500k.

If you’re selling a co-op, you may also have to pay a flip tax to your co-op building. Flip taxes can range from a few thousand dollars up to 3% or more of the sale price (or profits). Other closing costs include real estate attorney fees, co-op/condo move-out, and managing agent fees as well as bank payoff fees.