The average New York real estate commission

‍

Whether you’re a buyer or seller, navigating the complex New York real estate market can be a daunting task. Working with a knowledgeable real estate agent can make all the difference. Not only can they save you time, headaches, and hassle, they can also potentially save you money in the long run — even when you consider Realtor fees in New York

Whether you’re a buyer or seller, it’s important to understand how real estate commission in New York works. Knowing what percentage you’re expected to pay your agent can help you make informed decisions and negotiate for a fair commission rate. 

How much is real estate commission in New York?

Whether you’re buying or selling in New York, it’s important to understand the real estate commission fees that come with a home sale. According to recent data, the average commission rate for home sellers is 4.97% in the state of New York, broken down into:¹

• Listing agent: 2.61%
• Buyer’s agent: 2.36%

While it may seem like real estate agents take a big chunk out of every home sale, it’s important to remember that these fees typically cover a wide range of services. This includes marketing and promotion, negotiating with potential buyers, and handling the often complex and time-consuming paperwork involved in the real estate transaction process. Safe to say, it’s worth the cut.

How much commission does a Realtor make in New York?

Real estate agents in New York are among the highest paid in the country, and commissions can range widely depending on the transaction. Some agents charge a flat rate, while others take a percentage of the sale price. As mentioned, Realtor fees in New York are around 5%, which can add up to a substantial sum depending on the value of the property. 

It’s important to note that commissions are often negotiable, and some agents may be willing to lower their rate in certain cases. Ultimately, the commission you pay will depend on your specific situation, the property’s value, and the agent you choose to work with.

Learn how much real estate agents make per year

4 ways New York Realtors set commission rates

New York is notorious for its high real estate prices, and with that comes high commission rates for Realtors. While some may assume that these rates are set arbitrarily, it’s a much more strategic process. Real estate agents in New York consider various factors as they set their commission rates, including:

Market competition

One of the most significant factors affecting Realtor commission rates is market competition. The more competition there is in a particular area of the real estate market, the more likely Realtors are to adjust their commission rates to remain competitive. If there are many Realtors vying for a limited number of buyers and sellers, the commission percentage may decrease. On the other hand, in areas with low competition, Realtors might charge a higher commission rate.

Property value

Realtors are more likely to charge a higher commission when the value of the property is high, rather than if it’s low. This is because selling high-value property requires more work and effort, and it takes more time to find a buyer.

Experience

Expertise and reputation in the real estate industry are also vital factors when it comes to determining commission rates. A more experienced Realtor may charge a higher commission rate because of the added value they bring to the table. With years of experience, an experienced agent will have acquired skills and knowledge that they can use to facilitate a smooth and seamless sale or purchase.

Property type

Some properties are more difficult to sell than others, and Realtors understand this issue. For instance, selling a condominium requires a different approach from selling a multi-million-dollar mansion or commercial property. They can adjust their commission rates for the various types of properties they deal with based on market competition, expenses, and time investment. 

With these factors in mind, good Realtors try to calculate a percentage that’s fair for both the seller and themselves. It’s a careful balancing act, and one that requires a deep understanding of the real estate market. In short, real estate commission rates in New York aren't just pulled out of thin air; instead, they’re thoughtfully and strategically determined.

Tips for how to save on Realtor agent fees in New York

No matter where you’re planning to buy or sell, a skilled Realtor can help you navigate the complexities of the real estate market, find the best deals, and negotiate on your behalf. But the services of a professional Realtor come at a cost, and real estate commission in New York can eat up a chunk of your budget. 

If you’re planning to buy a place in The Empire State, here are 4 ways you can save on Realtor fees:

Shop around and compare fees

One way to save on agent fees is to do a bit of research and shop around for real estate agents who offer more competitive rates. You can even look for a low-comission real estate agent. Some Realtors may be willing to negotiate their fees or offer flat rates, especially if you’re a repeat client or refer them to other buyers or sellers. Before choosing an agent, make sure you compare their fees, services, and reputation to ensure you’re getting value. 

Consider a limited-service listing

If you’re confident enough to handle some parts of the selling process on your own, you may opt for a limited-service listing. This means that you do most of the work involved in marketing, showing, and negotiating the sale of your property, but still get some professional assistance from a Realtor. A limited-service listing typically costs less than a full-service listing, but still guarantees you access to the MLS and other essential marketing tools.

Related: What is a net-listing?

Be prepared

Another way to maximize the value of a Realtor’s services is by making sure you’re 100% prepared before you start working with them. This means doing your homework, getting your finances in order, knowing what you want in a property, and being realistic about your expectations. The better prepared you are, the less time and resources your Realtor will have to spend helping you, which can translate to lower fees.

Here’s what questions to ask a realtor selling your house

Negotiate terms in your favor

Once you’ve found a Realtor you’re comfortable working with, don’t be afraid to negotiate the terms of your listing agreement. Depending on your needs and preferences, you may ask for a lower commission rate, a shorter listing period, or a different marketing strategy. 

However, keep in mind that your Realtor is also running a business and must make a profit to stay afloat. Be reasonable, considerate and maintain open communication throughout the process.

Plan in advance for real estate agent fees

Whether you’re buying or selling in New York, real estate transactions can be complicated and seem overwhelming for the average person. A great real estate agent can guide you through this fast-paced market, but remember — you get what you pay for. Put another way: plan ahead to pay real estate commission in New York and price it into your budget or home sale.

Understanding the current real estate commission in your area is critical. Working with a knowledgeable agent who can explain these fees in detail will help you feel confident in your real estate choices. If you’re considering buying or selling in the near future, do yourself a favor and find a great agent who will be your guide. They’re often worth the Realtor fees in New York.

Article Sources

1. Real Estate Witch: “Average Real Estate Commission in New York.” Accessed June 20, 2023.