I thought buyers didn’t pay for their broker?
You’re right – it’s very unlikely you will pay your broker in the traditional sense. However, a buyer’s broker is not helping you out of the goodness of his or her heart. When you “don’t pay” the broker, the seller is. A seller typically pays a commission of 5-6% which is split between the listing broker and the buyer’s broker. Doing the simple math there means your broker will pocket a 2.5-3% commission upon closing. With Yoreevo as your broker, we take that 2.5-3% and rebate (literally write you a check!) for 1.5-2% of the purchase price. It’s really as simple as that.
Is there a difference in service versus a “traditional” broker?
Nope, it’s exactly the same (but we’re shooting for better!)
I’m still not following – why are the large brokers still charging 3%?
Simply put, they’ve always made 3% commissions and there’s no reason to change. Yoreevo is brand new. We’re not built on 3% so we don’t need 3%. With information much more available, brokers are not providing the value they once did and we’ve adjusted pricing accordingly.
1% pricing has also shaped the way we run our business. You won’t find us working out of fancy offices, zipping around the city with a private driver or buying new suits every week to look important. With significantly lower expenses, we can rebate most of our commission to you and remain profitable.
If other brokers need 3%, why is Yoreevo happy with 1%?
Because it’s a reasonable fee! Real estate commissions don’t change much depending on where you are in the country – they’re generally 5-6% coast to coast. What does change in NYC is the purchase price. In 2016, the average Manhattan home sold for $2,000,000 versus the entire US at $276,000. We probably don’t need to tell you that means a lot more commission dollars are paid for a NYC apartment – more than 7x as much to be exact. Does a NYC apartment require 7x as much work? Absolutely not. Yoreevo recognizes this and puts the excess fee back in your pocket.
What would cause the rebate to be less than 2%
Commissions vary from listing to listing. Especially at higher price points, commissions may move down a bit but in the vast majority of cases, you can expect a rebate of at least 1.5%. If you are serious about a particular listing, give us a call and we can tell you exactly what the rebate would be.
Why do I need Yoreevo? Can’t I go directly to the listing agent and pay 0%?
In theory, yes; in reality, no. While every listing agreement is unique, it is very unlikely the listing broker will reduce the commission 50% if there is no buyer’s broker. Both James and Leon tried this when purchasing apartments (prior to being licensed) and were unsuccessful. With Yoreevo, we make it simple – no haggling, no ambiguity, full service representation and up to 2% back in your pocket at closing.
Does it matter when I contact Yoreevo?
Definitely before you sign any contract(s) but generally, the earlier in the process the better. We can pick up a search that’s already in progress but by starting early, we can help you find apartments that fit your needs and schedule showings if necessary. If you’re more independent and have already started looking at open houses, as long as you have not signed a contract with another broker, we can still represent you. If you’re visiting open houses and are asked to fill out a sign in sheet, put Yoreevo as your broker to play it safe. However, the sign in sheet is not a contract and we can still represent you on that apartment even if you did not put us down as your broker.
Is a commission rebate legal?
Yes. Not only is it 100% legal, the New York Attorney General, Eric Schneiderman, encourages it. We bet you haven’t had a broker mention this to you before.
Is a commission rebate taxable?
While we’re not tax accountants and we can’t make any promises for your individual situation, almost definitely not. The IRS issued a private letter ruling stating a commission rebate is not income. Instead, it is treated as a reduction of the purchase price. For example, if you bought an $1,000,000 apartment and received a $20,000 rebate (2%) from Yoreevo, the IRS would say you paid $980,000 ($1,000,000 – $20,000) for the apartment. Please see a tax accountant to analyze your individual situation.
What about for sale by owner listings and new construction?
Since For Sale By Owner listings and new construction don’t have listing brokers, they behave differently than the rest of the market. We’ll include both when looking for properties that fit your needs but if you are searching on your own, it is important that you talk to us before you reach out to anyone. Listings are more varied in this part of the market so please contact us and we can go through the specifics of any individual apartment you are considering.
Can Yoreevo sell my apartment?
Absolutely. We can’t provide explicit pricing online but can promise to save you a lot. Just fill out the Contact Us form or call us and we can talk about your listing specifically.