STATEN ISLAND, N.Y. (Aug. 19, 2021) – Home buyers and home sellers commonly ask, “How do real estate agents get paid?” This basic information is important to understand before beginning the home-buying process, and even more critical in today’s highly competitive market, where inventory is extremely low and homes stay on the market for a very limited time.
In fact, Staten Island homes spent a medium of 34 days on the market, as reported by the Staten Island Board of Realtors® (SIBOR).
“Real estate commissions depend on several factors, which can include – but are not limited to – market conditions, type of representation and types of services provided, among other things,” explained Sandy Krueger, CEO of SIBOR. “Currently, we’re seeing unprecedented competition among real estate agents on Staten Island, especially when it comes to service and commission options.”
To help home buyers and home sellers have a clear understanding of how real estate commissions work, SIBOR’s Realtor members – Staten Island’s real estate professionals – are providing the following information:
HOW COMMISSIONS WORK FOR SELLERS
While there are some real estate agents who will charge a flat fee or varied commission models for their selling services, most charge a percentage of the sales price of the home once the deal is done.
There is no set rate; every sale is unique. This gives consumers many different choices, including which customer-service approach, broker and commission model they prefer.
HOW COMMISSIONS WORK FOR BUYERS
Real estate agents representing the buyer are typically paid by cooperative offers of compensation from the seller’s agent as an incentive for finding a buyer.
This fosters cooperation between brokers providing the best and greatest number of options for both buyers and sellers. It also ensures greater access for first-time, low-income and many other home buyers because it saves buyers from having to pay an out-of-pocket commission to their agent at the closing, on top of their down payment and other closing costs.
THE VALUE OF A REAL ESTATE AGENT
Buying a home is the single largest and most complex transaction most people will make in their lifetime, with volumes of property, neighborhood, transaction, legal and regulatory details to navigate.
Having a local expert – a real estate professional – to manage the process is more important than ever before. In the process, consumers can count on a real estate agent to look out for their needs and provide critical advice.
The internet only does so much; real estate agents help people traverse complicated, data-heavy and voluminous information, details and decisions – which is what their commissions pay for. This includes everything from coordinating with lenders, managing attorney reviews, and advising on zoning to arranging appraisals, serving as a professional negotiator in a highly competitive market, and advising on the latest trends in the local housing market.
HOW COMMISSIONS WORK FOR REAL ESTATE AGENTS
After this involved process, let’s assume all inspections have been completed, and the appraisal comes in at or above the sales price.
With the average closing time on a Staten Island home taking 106 days from an accepted offer to the closing when title of ownership is transferred, real estate agents may spend weeks or months working on the transaction without getting a single payment, And, with all this time and effort, it is not certain the sale will go through. Those months of hard work could be rewarded with $0.
“This could be viewed as a negative. However, most Realtors view this as an incentive to make sure they are continually working in the best interest of their clients,” Krueger said. “Not being able to rely on a bi-weekly paycheck, and instead relying on results, drives them to work even harder – and ultimately, help a greater number of people achieve the American dream of homeownership.”
About the Staten Island Board of Realtors® (SIBOR)
Established in 1915, the Staten Island Board of Realtors® (SIBOR) is the largest professional association in Staten Island, N.Y.
SIBOR exists to enhance the ability and opportunity of its members to conduct their business successfully and ethically, and promote the preservation of the public’s right to own, transfer and use real property.
Comprised of more than 2,300 members, SIBOR serves real estate agents, brokers and affiliated professionals throughout the borough and surrounding areas.
SIBOR is the provider of the Staten Island Multiple Listing Service Inc. (SIMLS), which works as a clearinghouse through which more than 250 local real estate firms exchange information on properties they have listed for sale. Together, its members participate in over 5,000 real estate transactions every year.
All SIBOR Realtors belong to the New York State Association of REALTORS® (NYSAR) and the National Association of REALTORS® (NAR).
SIBOR may be reached at 718-928-3220 and viewed online at SIBORREALTORS.com. SIBOR may also be visited on Facebook at Staten Island Board of Realtors,Twitter via @SIBOR and Instagram at SIBOR REALTORS (siborrealtors).
Media Contact: Barton Horowitz