Real Estate Commissions in NYC

Commission is the part of a real estate transaction people are most reluctant to bring up, and it is the part most worth discussing openly. Sellers worry that asking will seem adversarial. Buyers are often unsure whether it affects them at all. Agents, for their part, sometimes answer the question in a way that closes the conversation rather than opening it.

This guide takes the opposite approach. It is not a recommendation about what you should pay — we could not responsibly make one, because there is no standard rate and every arrangement is negotiated individually. It is an explanation of how the fee is generally structured in Manhattan and Brooklyn, what it typically covers, what has changed in recent years, and the specific questions worth asking whoever you are considering hiring.

Ask these questions of us, and ask them of every other agent you meet. A good agent should be entirely comfortable answering them.

This is the most important thing to understand, and it is frequently misstated.

Real estate commissions are not fixed, not standardized, and not set by any industry body. Each brokerage sets its own fees independently, and every arrangement is negotiated between a client and the agent they hire. Rates vary with property type, price point, the scope of what is included, and the specifics of the individual agreement.

You will see figures quoted online as though they were customary. Treat those as descriptions of what some transactions have looked like, not as a rule you are bound by or a benchmark an agent is obliged to meet. When an agent quotes you a number, they are telling you their pricing — which is exactly what you want to know, and exactly what you are entitled to discuss.

In most residential sales in Manhattan and Brooklyn, the seller and the listing brokerage agree on a fee in the listing agreement, expressed as a percentage of the eventual sale price and paid at closing out of proceeds. Nothing is owed if the property does not sell.

Where a buyer is represented by a different brokerage — which is the case in a large share of New York City transactions — that agent's compensation is handled as a separate matter, negotiated and documented rather than assumed. How that works in your specific deal is a question to raise early, and we cover it further below.

Some arrangements depart from a straight percentage entirely. Flat fees, tiered structures, and reduced-service models all exist. They serve different situations, and none is inherently better — what matters is that the scope matches the fee and that both are written down.

This varies more between agents than the percentage does, and it is where the comparison actually gets interesting. Two agents quoting the same number may be offering substantially different things.

Industry practice around buyer-broker compensation has shifted meaningfully in recent years, following litigation and regulatory attention nationally and changes to local listing systems in New York City.

The broad direction of travel is toward explicitness. Compensation arrangements that were once customary and largely invisible to clients are now negotiated openly and documented in writing. Buyers are asked to sign representation agreements setting out how their agent is paid before touring homes. Offers of compensation are handled differently than they were, and are not advertised the way they once were.

For you, the practical effect is that more of this is now a conversation rather than an assumption — which is an improvement, provided you actually have the conversation. The specifics continue to evolve, and they differ between systems and brokerages, so rather than relying on a summary written at one point in time, ask the agent in front of you how it works in your transaction today and ask your attorney to review what you sign.

Your listing agreement sets the fee, the term, and the scope. It is a contract, and it deserves the same attention you would give any other contract involving a seven-figure asset.

The most productive conversation is usually not "can you go lower" but "what am I getting, and what would change if the number changed." That reframing tends to produce a more honest answer, and it surfaces the things that actually differ between agents.

Buyers historically gave commission little thought, on the assumption that the seller handled it. That assumption is no longer safe, and buyer representation agreements have made the arrangement explicit.

None of this is cause for alarm — having your agent's compensation written down is better for you than having it be ambient. But it does mean reading the agreement and asking questions before you sign, rather than treating it as paperwork on the way to seeing an apartment.

People hesitate to raise this, and they should not. Discussing how someone is paid is an ordinary part of hiring them for significant professional work, and every competent agent has had the conversation many times.

Pay attention to how it is received. An agent who explains their fee calmly, tells you what it covers, and is comfortable being compared is showing you something useful about how they will represent you. So is an agent who becomes defensive, deflects, or drops their fee the moment it is questioned — that last one in particular, since holding a position under pressure is a large part of what you are hiring them to do.

You are also entitled to take time. Nobody should be signing a listing agreement or a representation agreement in the same conversation where they first hear the terms.

The fee is easy to compare. What it buys is harder, which is why the fee gets most of the attention. A few things worth weighing alongside it:

We wrote this as an explanation rather than a pitch, because commission is a conversation people are entitled to have without being sold to in the middle of it.

What we would encourage is simply this: ask. Ask us, ask the other agents you meet, and compare what you hear on scope rather than on a single percentage. Read what you sign, and have your attorney read it too. Whatever you decide, you should understand the arrangement completely before you are in it.

If you want to talk it through — whether or not you end up working with Andreea Miller and Steven Markowicz — we are happy to walk you through how ours works and how to evaluate anyone else's.