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/

Sold! Another Successful Transaction

353 East 72nd Street, 5B

This south facing one bedroom with wall to wall windows throughout is filled with sunlight and has beautiful tree top views. In this case, the unit was only on the market for 36 days! In today’s complex real estate market, it is imperative to work with an expert who understands the unique process of selling in your specific building and neighborhood. See the link below for more details about this sunny residence.

See Property Here!

Low Income Co-Ops and Property Taxes

~via Wall Street Journal: http://goo.gl/qL4smV ~ Josh Berbanel

The New York City Council is proposing to eliminate property taxes for the city’s 1,271 limited-income co-ops in exchange for tighter rules, an effort designed to preserve an unusual affordable-housing resource in the city.

Many of the co-ops were created in the 1980s and 1990s to boost home ownership among the poor. People living in city-owned buildings were able to buy apartments for $250 each.

The new proposal is designed to address two issues that have emerged in recent years: Some distressed buildings aren’t paying their property taxes and water bills; and some successful buildings, though designated as limited-income co-ops, have sold apartments for high prices. Some have gone for more than $1 million.

A 14-member City Council task force on affordable housing, including Speaker Melissa Mark-Viverito, proposed the changes in a letter this month to Vicki Been, head of the city’s Housing Preservation and Development Department.

The cost of the City Council proposal isn’t yet clear. The city’s Independent Budget Office is studying the issue. In the fiscal year ending in June 2014, the city billed a group of about 1,000 limited-income co-ops $21.1 million in property taxes, but collected only $14.1 million, according to data from the budget office.

The new abatement proposals don’t address tax arrears.

“The members of this task force are concerned about alarming developments that may risk the longevity of the program and the preservation of these affordable units,” the letter noted.The limited-income apartment buildings, which are known as Housing Development Fund Corp., or HDFC, co-ops, were created over decades under state law. Many have operated with limited or no city oversight. Most received partial property-tax abatements when they were set up, but the tax bills automatically increased year by year.

The proposed rules would offer full tax abatements only to co-ops that sign tougher agreements on how the buildings are operated. Strict limits would be set on both the income of buyers and the price at which units could be sold. The rules would also require co-ops to hire outside managers.

“The current situation both imposes more taxes than we think are necessary and leaves the public with far too-weak guarantees of long-term affordability,” said Councilman Mark Levine of Manhattan, co-chairman of the task force with Jumaane D. Williamsof Brooklyn. “It is crying out for reform.”

In a statement, the city’s housing-preservation department said it has been working with housing-advocacy groups to create more oversight of the buildings, “the vast majority of which are currently unregulated.” But it didn’t specifically endorse a full tax abatement.

The city agrees with the view that “we need both carrots and sticks to ensure the long-term financial viability of this critical housing stock,” the statement noted.

The HDFC co-ops, especially in expensive Manhattan neighborhoods, have long been known in the brokerage community as a source of inexpensive housing for young people with limited or no income, but with financial help from parents.

A review by The Wall Street Journal of sales at 540 limited-income co-ops in Manhattan since 2005 found 220 sales for more than $500,000 each, including 20 sales for more than $1 million. The priciest was the $2.025 million sale of a three-bedroom apartment last year at the Grinnell, a century-old Renaissance Revival building at Riverside Drive and West 157th Street.

The limited-income building has no regulatory agreement with the city, as some others do, city officials say. It uses a different interpretation of state law than the city does in determining income limits for buyers. Several board members didn’t respond to a request for comment.

Councilman Antonio Reynoso, said that as housing prices rose in Williamsburg, in his district, limited-income co-op owners began selling co-ops at high prices there too, in violation of city and state rules.

“They might have gotten the apartment for $250 and are selling it for $250,000,” he said. “We are trying to build a policy so the entire building is invested in maintaining affordability.”

Andy Reicher, executive director of the Urban Homesteading Assistance Board, which works with low-income co-ops, said the cost of a full tax abatement for the preservation of a co-op apartment would be a fraction of the cost to create an affordable unit under the 421-a tax-abatement program for developers.

It is unclear whether the tax abatements would go far enough to help many very troubled HDFC’s, nearly a third of which have at least some property-tax arrears. At 501 W. 143rd St., a large group of shareholders struggled for years to oust a managing agent and a three-member board that had run up more than $3.2 million in tax arrears, water bills and other city charges, and had failed to provide annual financial statements.

In July, the new group got control of the building and has been fending off a city foreclosure because of the tax bills owed. They are trying to persuade the city and elected officials to give them a second chance.

Ronaldo Kiel, the new board president, said more rules may not always be the answer. He said the city already had authority under his building’s bylaws to conduct an audit in response to complaints but hadn’t intervened. An audit could have “prevented all this,” he said.