Since When Are Buyers Entitled to Commission on Long Island, New York?

July 31st, 2008 category: Real Estate News

With my entrance into the NY market offering a vastly different perspective from “whence I came” (out of state), it has been confounding to me, particularly after reading this featured post: http://activerain.com/blogsview/549893/Educating-consumers-on-how to understand how it is that NY consumers seem so confused over the commission concept, and who gets what.

In my real estate history, there was the sellers agent, and the buyers agent. Something like 95% of sold homes were co-ops, with the commission being split and designated. They’re called “co-brokes” here.

In Long Island, however, I’ve come to understand the there is a large contingent of the real estate community that views the commission this way: an agreement between the seller and the listing agent.

The result of this thought process is problematic to the consumer for the following reason: buyers are becoming aware in New York that there is commission “built in the price” for a buyer’s agent on mls listed properties. Sellers don’t care who gets the money in a “split” situation, as long as the house is competently closed.

If listing appointments were handled with this assumption (a split fee) by the listing Realtors (more importantly, by their Long Island brokers), it would loosen up the atmosphere. I am certain that this is not the comprehension here, because there are still signs that go up regularly, not put into the mls for a week-or month- after the sign is up. If a seller understood that the objective is a sale, from whomever may bring a buyer, they would surely eschew a “pocket” listing.

To hang on to an outdated notion that permits exclusivity and limited exposure for sellers who receive NO BENEFIT from this practice seems dicey in a market of properties sitting. It’s unethical in a good market- pick your poison.

If a Long Island agent who is involved in this type of listing effort would explain the benefit, perhaps it would clarify this issue for other agents that are part of the MLSLI, in addition to buyers who believe that the agreed to commission in the form of the advertised mls rate is “theirs”- to the extent that it pays for their representation (and is funded by them, as it’s in the price of the house as an expense to sell).

Until then, I’m sticking with the philosophy that commission offered in the MLS to the buyers “side” is money well spent by BOTH seller and buyer as it offers a “fair” transaction. Whether it’s good for the li$ting broker, from where I stand, is irrelevant.

To see industry comments on this post, Click Here.

This entry was posted on Thursday, July 31st, 2008 at 1:06 pm and is filed under Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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