Ideally, what should a good broker do?

listing broker or buyers broker?

Sorry, let's tackle BUYER'S BROKER first.

You can tell from my other postings that I think this should be a matter of negotiation between agent and client -- just as if you asked "what does an accountant do?" I would say "my accountant prepares my taxes, but he could help me with financial planning."

But in general, a good broker -- from the buyer's or renter's side -- finds you the right place to live at the best price. That means:

being a market expert in terms of inventory (which is the hardest thing, to continually see properties and what they close at so you have at any given time the finest sense of pricing);

sending you listings if you want them (some people like to computer-shop themselves);

telling you about inventory that isn't technically listed ('pocket listings' -- as our business gets more and more computerized, I predict agents will have more "unlisted" inventory so they can offer their clients something special);

warning you off buildings that are inappropriate (maybe you need to be kept from falling in love with an apartment in a building with bad financials before you see it);

seeing inventory with you to teach you how to compare listings;

looking at architecture and finding ways to rearrange living space that would suit you;

helping you pick a place;

negotiating price with the seller/landlord;

aking sure your real estate attorney is on top of the deal;

making sure you get a contract that is acceptable to you;

helping you read financials and prepare a co-op board package;

preparing you for the board interview;

continuing minor negotiations post-contract alongside the attorneys;

making sure your financing is in place and that you can afford it (a lot of people skipped this step in the past ten years);

holding your hand so you don't melt down during all this (my boss calls this "relocation therapy")

making sure that the attorneys schedule the closing and that it goes off okay (this is where you get keys),

and checking in post-closing to make sure you're settled in. This can involve everything from pointing you to movers or contractors to introducing you to a neighbor so you have a friend in the building.

Keith Burkhardt's business model includes rebates, so I bet he would say a good broker would help you recoup some of the commission portion of the transaction. Not sure how that works legally, but I think he has a system.

Whew! I'll just plug my book here: http://tinyurl.com/2ag28z and then let someone else tackle the sell-side.

ali r.
{downtown broker}

Sorry this makes absolutely no sense: 'pocket listings' -- as our business gets more and more computerized, I predict agents will have more "unlisted" inventory so they can offer their clients something special

What seller would ever allow a broker to NOT market their listing as aggressively as possible? I would never allow a listing broker to hide my property under some rock so he has "something special" to show his other clients. As a seller, I would find this unacceptable and unethical.

However, it does make me feel better about my past FSBO decisions.

Ali, some of what you've outlined is, in my experience at least, more of a 'perfect world' scenario and not what actually happens. For example, it's rare (again, only speaking from my own experience) for a broker to offer any input with regards to the contract once the attorneys take over.

Also, I've never had a buy-side broker 'warn' me off a building with bad financials. In fact, I've had the opposite happen, resulting in a deal that fell apart once my attorney completed his due diligence and discovered red flags that any broker worth his or her salt would have known about had he or she bothered to become familiar with the building.

I agree that if a broker can present unlisted inventory, or alert you to an amazing place before it hits the market, that service can be worth its weight in gold.

But honestly, so far my experience with buy-side brokers is not dissimilar to that of trying to purchase a wedding dress--they tell whatever they think will make the sale ("It looks gaawwwgeous on you honey! This style is awwl the rage!"--even though you resemble a giant marshmallow cream-puff and you asked for a straight sheath).

Perhaps I just haven't found the 'right' broker--one who is knowledgeable, diligent and 'on my side' (ie, not just looking to make a sale at any cost). Perhaps they do exist. I'm still looking...

scoots - It's not all like that, really. I have a buyer client who had been in the market for a while. I knew exactly what he was looking for. And I was able to approach another broker - one who works for a much bigger firm - to ask if she had anything coming on the market that fit his needs. Indeed she did, but the building wasn't being marketed yet (the offering plan hadn't been approved yet - and chances are the ink wasn't dry on the listing agreement). In fact, it would have been unethical for the listing agent to be actively marketing the building without all the paperwork in place.

Bottom line, my buyer got the best unit in the building. That's the part that matters to me more than anything.

Tina
(Brooklyn broker)

Talk to me about what is involved in getting an offering plan approved and about how long that would take? Essentially, how long does the ink take to dry? Last time I spoke to a broker about listing an apartment, it seemed like a very quick process ... essentially as soon as professional photos could be taken and posted online.

"Ideally, what should a good broker do?"

Jump off a cliff?

Remind you every day that now is a good time to buy, that RE only goes up, and that if you don't buy today you will be priced out FOREVER.

Another thought re: brokers and negotiating--how is a buyer supposed to know in advance that the broker representing him is a good negotiator?

I worked with a buy-side broker last year who was simply unable to stand up to the seller's agent, even after I spoon-fed her specific instructions on what to say. She simply couldn't do it, allowing herself to become intimidated by the opposing agent. The whole thing was beyond tedious; I would have far preferred to do the negotiating myself (I'm certain the outcome would have been much different if I had.)

Going forward, I'm very wary about entrusting a broker I've met briefly once or twice at an open house handle something as important as negotiating a sale for me.

I have not found brokers to be good negotiators either but honestly – that I get. They are paid to get deals done, not to save anyone else money. Brokers on both sides have incentive to get the seller to come down and the buyer to come up. That is it. It doesn’t matter what the value, financials, market, whatever is – they get paid when the deal closes. To expect anyone to act outside of his or her own self-interest in business is silly.

That said – I get how a sellers broker offers value to a seller who doesn’t want to FSBO for whatever reason. I am not quite sure I see where a buyers broker really offers value.

scoots - you need to do a transaction on your own, and then a transaction with a very good buyer's broker. if you see no difference between the two, then you are in fact, very skilled at the art of purchasing a property in Manhattan, something that by in large most people are very clueless about.

In such a case, you will naturally see less value in a buyer's broker because you are fluent with a purchase.

If you are completely comfortable that a buyer's broker is of no added value to you because you are in essence, more skilled then the buyer's broker, then the only thing you have left is to weigh whether it makes sense to invest your time in the purchase vs. having someone facilitate it for you.

Of course, you would have to trust the buyer broker too. Some buyer brokers are a complete waste of time. Others will save you a lot of time and money.

"I have not found brokers to be good negotiators either but honestly – that I get...they get paid when the deal closes. To expect anyone to act outside of his or her own self-interest in business is silly."

This is true, most of the time, but not all. There are definitely brokers out there that will steer clients away from properties where they would make more money and into properties where they would make less. The fact is that a buyer's broker is not allowed to steer anything, technically. But those that have strong opinions are usually the best out there.

are you asking as a potential client or a person who wants to be a broker?

You raise a fair point - I have never done a transaction with a good broker! I have done a number on my own and a number with crappy brokers. My smoothest one had no broker involved on either side.

I would agree that very few people are very skilled at Manhattan purchases - but I would include in that group most brokers.

I think its interesting that Tandare asks a legit question and no one can really answer it. We’ve had one ethically questionable one and one potentially legitimate example (but I think it’s a real reach.)

How about on the selling side – anyone want to chime in on what a good listing broker should do? This one I find more interesting anyway as I said above – I get how a listing broker can add value.

"I worked with a buy-side broker last year who was simply unable to stand up to the seller's agent, even after I spoon-fed her specific instructions on what to say. She simply couldn't do it, allowing herself to become intimidated by the opposing agent."

Hey, this is how I get most of my institutional business: at this point there are an enormous amount of very inexperienced buyer's side brokers who just can not stand up to a deluge of facts that guys like me throw at them whenever they raise any point and they just cannot cope with the barrage and fold like a cheap tent.

I'll give the real answer, which no one is going to want to believe:

A good buyer's broker is one who can listen to what the buyer claims they want, "read" their reactions to a number of apartments which they take them to, and get them to look at a number of units WHICH THEY DON'T WANT TO LOOK AT, BUT ARE THE ONE'S WHICH ARE ACTUALLY REPRESENTATIVE OF WHAT SUITS THEIR NEEDS/WANTS AT THE PRICE LEVEL THEY CAN ACTUALLY SPEND. Face it, if not that, what can't most buyers do without a broker? yes,
1) negotiate well - but most are not capable of doing that and it's not like it's an easily acquired skill, and how would a buyer know that this was going to, or even did happen in past tense.
2) contract negotiations - again, most are not capable of doing so and as pointed out by someone else earlier, most attorneys won't allow them into the process at all.
3) etc,etc.

Hooray 30yrs! I think you've nailed it. It's absolutely true that a good buyer's broker will bully you into seeing something you think you don't want. When I started as an agent I tried - out of respect for my clients - to do what my clients wanted me to do. It was only after my buyers lost out on deals in which I should have been more aggressive that I realized that I was doing them a disservice by being deferential.
Tina
(Brooklyn broker)