Working with a Buyer’s Broker

New Yorkers are some of the most keen and savvy shoppers around. We are exposed to a multitude of ad stuff including billboards, flyers, the “two dweebs” standing in the middle of the sidewalk trying to sucker you into donating to their latest cause, signs, subway ads, free morning papers, etc…nearly everywhere you turn there is more ad stuff. As a result, we have developed a keen sense of what’s real and what’s not!

There’s typically a jaw dropping reaction when it is revealed to a buyer of a co-op or condo in NYC that “working with a buyer’s broker is FREE.” That’s right, when you’re ready to apartment shop in NYC it costs you nothing to team up with an experienced broker who can provide you guidance and perspective. In fact, they will very likely save you time energy and money – if you choose a good one!

What’s the catch? In New York, broker’s commissions are pre-determined prior to the listing going live and are paid for by the seller. This means the listing agent, or agent to the party selling an apartment, will split their commission (usually 50/50) with the buyer’s agent because ultimately they want to make a deal happen for their client.  This “co-brokering” strategy/philosophy is beneficial to all parties – for the seller because they are engaging with many buyers’ brokers and their client who feels more comfortable working with a trusted advisor, and lastly the buyer too because they have more options to choose from and are fully represented in the transaction.

Essentially the seller pays the commission for both the seller’s agent and the buyer’s agent. Typically the commission equals roughly 5-6% of the home’s sales price, which is split evenly between both agents (on a $1,000,000 home that would be $25,000-$30,000 apiece). In today’s market, the typical time needed to find and close on an apartment is anywhere between 4-6 months There is a fine balance between the time committed to the buyer and earning a commission at the closing table. A good buyer’s agent will strive to prove their dedication and loyalty and will ask for your loyalty in return as you proceed in your search to make sure you find the best possible fit at the right price.  

It’s important to note the difference between buying agent and listing (sales) agent. As a home buyer, you should be aware and forewarned that when attending an open house alone with no buyer’s agent representation (either present or working from the sidelines) that when you engage the listing agent you will be unrepresented. A listing broker pledges his/her fiduciary responsibility to the seller and the seller only, therefore legally may not reveal information that could be relevant to the purchase or in your best interest.

Attending open houses is an informative experience, but remember the broker greeting you at the door is not your agent or friend. They’re simply taking the appropriate actions to sell their clients property for top dollar, leaving no room to consider your interests.  As best explained:

“Let’s say, for instance, you walked up to the listing agent at an open house and gushed about how you love the home and want to buy it, but you will need to move soon because you’re expecting your second child and need to decorate the nursery pronto, or the lease on your rental is up in a couple of months. A seller’s agent can use this information against you by informing the seller that your clock is ticking, so they shouldn’t budge too much on their asking price—or at all.

Yet make this same confession to the buyer’s agent you’re working with, and it’s all fine—this professional would know to keep this information private from sellers (and their agents) so it can’t be used against you.” - Realtor.com

There are main things you want to consider when choosing a Buyer’s Agent:

What areas do they specialize in – live and work?

What is their level of experience in real estate?

Do they have testimonials and recommendations from previous buyers and sellers online?

Are they friendly, capable, knowledgeable, patient – remember you are going to work with them for months.

What is their availability to work with you?

Take the time to interview a few brokers and ask pertinent questions about how they work, their process and their team of professionals that will help get you to the closing table with comfort and ease and without compromise or fail.

Jeff Nolan specializes in both the sale and leasing of Manhattan and Brooklyn residential real estate properties (condos, coops and townhouses), having over 10+ years in transnational real estate experience with The Corcoran Group and 20+ years as a landlord/real estate investor. He is dedicated to bringing the right listings to your fingertips and ready to accommodate you on showings at any time.  Don’t take our word for it, check him out online – just Google Jeff Nolan and Corcoran. We invite you to share your search criteria with us and schedule some time to work with him today.

Sources:

[1] http://www.realtor.com/advice/buy/what-is-a-buyers-agent-used-for/