The short and quick answer is that the NJ real estate commission rate is fully negotiable. What that means is that there is no set or standard rate. It is up to the property seller and their agent to come to an agreement on the best commission rate for their situation. As most people already know, the most significant closing cost for sellers is the real estate agent commission for both the buyer’s and seller’s agent. Typically, most sellers can expect to pay around 5%-7%. A few sellers sometimes try to negotiate a commission under 5%, but there are both advantages and disadvantages to each end of the commission spectrum. It is important to note that half of the commissioned amount is used as part of marketing the property to other real estate agents.
For example, if a seller has agreed to a 7% commission, 3.5% would be marketed as a commission split paid to the buyer’s real estate agent (if they brought the buyer). Inevitably, some sellers want to take advantage of every possible angle when selling their home. For example, if most properties are offering either a 2.5% split or 3% commission split to the buyer’s agent, the seller who’s offering a 3.5% split will be at an advantage. Currently, 3.5% is much higher than what other sellers have offered as a NJ commission split to buyers agents based on 2022 market data. NJ real estate commission rates in this range may entice other NJ buyers agents to sell that particular property over others that may be offering less commission.
On the other hand, some sellers are not concerned with a competitive split and simply want to try and save money. These sellers may decide to offer a commission rate that is lower than other competing NJ real estate commissions. There is nothing wrong with this approach and sometimes it works well for both sellers and buyers. However, if the commission you want to offer is too low, some NJ real estate agents may not want to take the listing. In other cases, offering too low of a commission could even work against you by causing some buyers agents to not want to show the home. This doesn’t always happen, and in some instances is not ethical. For more information on this type of scenario, refer to this post from the National Association of Realtors on negotiable commissions: NAR – Commissions Are Negotiable. Lastly, there are some discount brokerages in New Jersey who will take listings for a flat rate or highly discounted commission rate. However, in many cases they may not offer more than just listing the home in the multiple listing service (MLS). Additional marketing, photography, and negotiation with buyers are among a long list of items that may not be included.
In any case, the NJ real estate commission rate is fully negotiable. It is important to consider all of the factors before deciding on the amount of commission to offer as part of selling your NJ home. The best thing to do, is to discuss any ideas you have about the NJ real estate commission rate with your real estate agent before you list your property for sale.
If you are considering selling your NJ home, and would like to find more information about how Avallon Real Estate Group can handle the process for you, click the following link to learn more: Sell Your NJ House