Who pays for broker fees in New York City when buying an apartment?
In New York City, broker fees will always be paid by the seller.
The way it generally works is as follows:
- The seller lists their apartment with their broker, who represents their interests and has a fiduciary duty to them.
- The seller will offer their broker a commission. For instance, let's say the commission that is being offered to the seller's broker is 6%.
- If a buyer is unrepresented and comes without a broker and decides to purchase this specific property, the seller's broker is entitled to the entire 6% commission.
- If a buyer is represented by a broker and decides to buy the property, the seller's broker needs to split the 6% commission with the buyer's broker. This effectively means that both brokers receive 3% each.
For a potential buyer, there is absolutely no cost to working with a broker that represents them.
It's important to note that broker fees for New York City rental apartments are completely different than fees associated with buying or selling. When someone is seeking to rent an apartment in New York City, there are generally two types of apartments: no-fee rentals and fee rentals.
In a fee rental, the renter has to pay a fee to the broker, which is generally 1 month to 12% of the annual rent. These are all negotiated with the broker. In a no-fee rental, the landlord covers the fee, and the tenant will not have to pay any fees associated with renting the property.
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More Information for Buyers in New York City
- Are you interested in learning more about the benefits of working with a buyer's broker who will represent you through the lifecycle of your transaction? Learn more about the value of a NYC Buyer's Broker.
- Receive a comprehensive understanding of closing costs associated with buying an apartment in New York City.