I'm a buyer- why do I need a broker?

If you don't use a broker, the listing agent will get the entire commission. If you use a broker, they will conduct the business of the transaction for you and collect half the commission. Your money doesn't go "to someone else who doesn't really do much" - the seller's money is paying the commission. They walk away from the table with less money that you paid for the unit. (Your purchase price - broker commission = net to seller)

Why go thru the agony of a real estate transaction as a buyer all alone? Let an experienced agent assist in your purchase. It costs you nothing.

look at burkhardt -- he will reimburse you 2 of the 3 percent if you do all the legwork. just more money in your pocket! good idea (i think)

from a prior post....

Yes. Although I doubt you are for real, more likely just promoting "sharpbuyers", we do the same. For someone that does "all" the leg work I rebate 67% of the commission at closing.
http://theburkhardtgroup.com/services-and-fees-c14358.html

The buyers I am working with seem quite happy.

http://www.streeteasy.com/nyc/talk/discussion/11382-buying-without-a-broker-what-are-the-risks
http://www.streeteasy.com/nyc/talk/discussion/13476-buying-without-a-broker
http://www.streeteasy.com/nyc/talk/discussion/13001-to-broker-or-not-to-broker

"Why go thru the agony of a real estate transaction as a buyer all alone? Let an experienced agent assist in your purchase. It costs you nothing."

I found when I was looking that buyers brokers are annoying. They will always nudge you to offer more. They will always nudge you to transact. Having them in your ear is a negative. Further, you will get better treatment from the sellers broker if they know they'll not be splitting the commission with anyone.

right -- but if you have foiund what you want -- get 2% back in lieu of not getting it back...

http://www.streeteasy.com/nyc/talk/discussion/10989-should-a-buyer-use-a-broker-
http://www.streeteasy.com/nyc/talk/discussion/2770-buying-without-a-broker

If you think doing a board package isn't rocket science, check out this thread:

http://www.streeteasy.com/nyc/talk/discussion/14131-board-rejection

the poster seems not to have done a very good job on his application, and was rejected, and now everyone's wondering if it was "discrimination."

ali r.
Ask the Agent at CBS Moneywatch: bit.ly//12afCB

This has been discussed to death: http://www.streeteasy.com/nyc/talk/discussion/13001-to-broker-or-not-to-broker

For the record, I see zero evidence that Ali or anyone else would have gotten GG approved. To suggest otherwise is a huge leap. Her assumption that the board found the buyers' finances somehow suspect or potentially illegal is offensive, at best.

The sellers broker has very powerful incentive to help the buyer put together a board package.

30yrs...can you reach across your desk and smack front_porch for me. Thanxs.

R u delirious? THE BOARD is crazy, the application could've been written in unicorn blood on 24 karat gold leaf... crazy is crazy....

Boards are nothing more than the lowest of the lows who got their asskicked in HS that get their jollies from people kissing their azzes for $0..... now /w the downturn... they are only going to reach deep down in their little hearts and pull out all their childhood hurt and take it out on every "buyer"/"seller"... LMAO... I remember reading about some of the crazy co-ops in the 80's ... nothing to see, the plot doesn't change in the 09' version...

At the end of the day on most transactions you really don't need a broker, perhaps just some consultation if the board package process has you spooked. But certainly there are many people who do want help throughout the process. On my way to the airport, I'll leave it at that.

By the way, KeithB was "theburkhardtgroup". Now that we are an actual group and growing I don't want my personal opinions so tied up with the company.

uwsbuyer229: please don't use a broker. Don't call one, don't email one, don't write one, don't take any phone calls from any of them. And certainly don't ask any of them to go look for listings for you.

30yrs shares my opinion on so much, that I have come to view myself as wise beyond my years [following real estate].

Wow 30yrs I thought you were a broker...no?

Searching for a property in Manhattan is a lot like the game of bridge, If you have a good hand you don't need a partner. Subsitute the word hand with the word brain and that's all there is. The only reason you might need a broker is because you have more money that time and if that's the case a few hours of research might yeild a good one. If your hell bent on using a broker I will e-mail you a few names of truly reputible brokers that have life time positive reputations in Manhattan. As, we all say in concert together, If you do your own homework, study hard, you pass the test. If youre asleep at the wheel and you need someone to do this for you it's like copying the answers of the test of the kid that never does too well when it comes to testing. Why take chances with such important life considerations.

falco, i doubt anyone would think that i can't search for property. and find them. but i don't like telling the other broker personally that i wish to lowball. and lowball i do. and successfully. i've managed deals that would make you weep with pride for me, but with the help of a broker. and i didn't pay a cent more, because the other side had a broker.

it depends on temperment. i don't need a broker to find my home, indeed how can a broker really know where you'll compromise, unless no compromise is necessary? but i want my broker to get the deal done with as little irritation to me as possible, and to deal with any coop board or submission.

If you can get a broker to spring for all the Cab rides and get him/her to do your leg work? WHY NOT? Not having one won't lower your price. At least your transaction cost goes down.

MAYBE......

I'd say 30yrs can spot the PITA querulous not-worth-the-trouble buyer in the first ten words. Hence the post.

If I was a broker (I'd need better teeth and people skills, for starters) that'd be the position to be in.

only if i can get serviced in the cab rides : )

a broker's interest is NOT aligned with buyer's interest.
Broker's interest is to close the deal asap.
Buyer's interest is to (a) get good deal, and (b) wait for a year if no good deal is available.

on the margin, the buyer's broker will always nudge client to offer a little more, and buy now (or, ofcourse, be priced out for ever, etc)

riversider, they do definitely increase prices generally. but do they do so on an apartment-specific basis considering that they almost all are handled by brokers? no. if you are looking at an apartment listed by the broker, the cost is fairly baked in. not absolutely, but probably still enough that trying to avoid it is like wearing a face mask for all of flu season, a bit wise but very dumb as well.

in the future i might reconsider. but not in this market, not yet.

Since when does the broker get a vote?

Unless the broker is Suzanne?

http://www.youtube.com/watch?v=Ubsd-tWYmZw

actually, if a broker wants repeat customers the interest is definitely aligned with a client, any client. and all really good brokers rely on repeat customers and referrals.

riversider, they do definitely increase prices generally. but do they do so on an apartment-specific basis considering that they almost all are handled by brokers? no.

A.R. please explain. Only way I see this happening is if seller's broker acts to their interest and against the client and fights the process thinking his commission will be shared......

"It costs you nothing."

This is the big lie. If it was true you'd see many more FSBOs but you don't. One of the reasons is the myths perpetuated by the RE industry

Agents are useful to out-of-towners who don't know neighborhoods, people that lack the time to search sites like this (or they don't exist like in parts off the OBs) and the kind of people that ask sales people "Does this look good on me?" You don't sound like one of these people.

"actually, if a broker wants repeat customers the interest is definitely aligned with a client, any client. and all really good brokers rely on repeat customers and referrals."

Come on AR. Their only incentive is to close the bid ask spread. And they are annoying. Sites like this have rendered them useless for buyers.

riversider, it's a market. if 90% of the apartments have a conventional seller's broker relationship, than 90% of the apartments have that price baked in.

i can look to find the 10%, but given that the odds are probably 80% or greater that i'll find my purchase from the 90% stock, it seems the returns for avoiding a broker are fairly limited, especially if you are using a broker the way i am.

using keith, however, if he is your cup of tea (and i don't know keith, no slurs intended, he seems both extremely ethical and forward thinking) could get you a portion of your money back.

i would never not look for FSBOs. but i wouldn't rely upon them.

AR,
Tell me again how you would utilize a broker in order to do just what you say. You find the property and how do you use the broker to gain the low ball? No challenge here...show me how to work it the same way. I want to achieve a 'low-ball' of sorts and my constant thought is to utilize the seller's broker. Keep in mind this is conjecture, I have very few transactions under my belt and hardly any bragging rites. This is pontification. My thoughts are always simple, too many cooks spoil the broth. Haggeling over price, which is usually what it comes down to. Why operate through 2 persons when you can go through one? They become your broker too, do all the paperwork, deal with the board and, collect the full commision. What am I missing?
As to visiting OHs with a broker. There is not a free cab ride in this city thats worth having someone talking in me ear while I'm trying to feel out a property. Nothing but, distraction. Prehaps after you've made your decision there is some advantage.
Enlighten me Yoda, I mean AR.

rhino, my point is that you can use them or not as a buyer, but until the sellers quit using them the price won't be affected. the price might be affected by competition, lack of supply, but that will again be the price to the seller, not the buyer.

the model won't be changed until the sellers change it. they're paying the fees directly, it is showing up in the buyers' prices indirectly. but until it changes, if you wish to use an ethical broker, no reason not to.

UWSbuyer, I'm also a buyer and I have chosen not to use a buyer's broker. Here was our reasoning:

1) When buying our first apt we did not have a buyers broker & we feel our broker swayed the owner to take our bid over others (that we think were stronger- found out after the fact) because he was going to get the full commission. As the buyer, we didn't want to lose out on an apartment for the selfishness of a broker, especially in desperate times.

2) We were screwed SO hard by a broker on a rental last year that we still haven't recovered & don't trust anyone. This guy lied, cheated and gave us horrible advice (told us to do something completely illegal so he could line his pockets).

Our thinking was right because now we're now dealing with another rogue (seller's) broker & we may very well lose the apartment we have an agreed on offer for because he's getting greedy.

"it is showing up in the buyers' prices indirectly"

Yeah but no more or no less whether you use a buyer broker or not. The question is whether they are of positive or negative value. Further, if I dust off this economic book, who pays what share has something to do with the shape of their preference curves, their marginal utility or something else.

oh falco, did you just call me yoda? really?

i didn't have any problems with printer, ph41, but that kind of makes me sad.

rhino, obviously. i have a broker i like and trust. i've done multiple transactions with this person. i've spent untold hours. it could be very different if someone doesn't offer anything worthwhile.

but my not using a broker will have little to no impact on prices going forward. until the seller model changes. that is my point. so use a broker if you wish. but obviously try to get references.

riversider, it's a market. if 90% of the apartments have a conventional seller's broker relationship, than 90% of the apartments have that price baked in.

A.R.
Not following you.. How does a buyer hiring a broker increase the price? Unless the seller's broker fights a discount I don't see it...

no riversider, the seller hiring a broker has already increased the price. you then have the option of hiring your own broker, but with today's model not doing so won't lower prices.

maybe i haven't been clear, that's why the discord. the price is baked into the system due to the seller's model. you can then choose to have a broker or not, but right now it won't affect pricing. you will either find some utility from having a broker or not, but the monetary cost is essentially, as of now, free, but not necessarily emotionally.

of course if fewer people used brokers when buying that might, or might not, change the model. i'd think that other more significant economic changes would be necessary to change it, although a percentage point or two might happen naturally.

Sellers broker raises price because they raise the cost of the transaction. Economics dictates that seller and buyer will share that cost. How much each bears depends on their relative bargaining strength and the shape of their curves.

riversider, yes, but THAT'S the seller's broker. the buyer doesn't have jack shit control over whether the seller hires a broker.

for now use a broker to buy if you find one you like and can deal with and want to go that route. it won't add to your cost. in 90% of cases.

A.R. I think this the condo thing is a little like dating. If you accept a few blemishes and spend the time looking you can do pretty well. In the past few months I've seen people strike deals on beautiful apartments in high end buildings if they just gave up one thing( In the situations I am familiar with it was view).

Kind of like that sweet girl who is a great cook who happens to weigh be carrying ten extra pounds..

To further your thoughts eric_cartman: a buyer's broker will also tell you to not disclose the fact that you have a cat and encourage you to close the deal with board of the no-pets building. Of course I chickened out at the end and had to hire an attorney to get back my 10% deposit which the owner wouldn't release.

eric_cartman

a broker's interest is NOT aligned with buyer's interest.
Broker's interest is to close the deal asap.
Buyer's interest is to (a) get good deal, and (b) wait for a year if no good deal is available.

on the margin, the buyer's broker will always nudge client to offer a little more, and buy now (or, ofcourse, be priced out for ever, etc)

yes rhino, you're right. but the seller decides whether or not to hire a broker. and that generally determines the total brokerage cost added to the transaction.

and falco i don't go to open houses with my broker. i don't want to. i'm sure you've heard the amazing things that can come out of brokers mouths when nobody else is around.

but in 2000, when i wanted to buy with a mortgage contingency, 10% down, at 20% below recent market comps because i felt the market demanded it, my broker who is extremely well respected listened to my pitch, forwarded it and got the deal done. maybe i could have done it also, but really, this was superb. it was initially listed at over $1,100,000, i saw it at $875K, and got it for $800k. but BY FAR the most impressive thing he was able to do was get the mortgage contingency. i won't ever, ever, ever buy without one.

Right AR, and they generally choose to get one. Back to the point tho, is that its ultimately an issue of whether you find the distraction of using a buyers broker outweighed by the positives. I always find them a net negative when I looked.

Unfortunately a broker tells the seller that he can realize a higher price than the seller acting independently. I'm not sure this is true. My unsupported opinion(gut feel) is this contributes to seller resistance in meeting the market and lengthens the time on market.

Of course there are some sellers who just don't have the time and view the cost as a necessary evil. The effect I believe exists probably occurs more in low to mid range..

rhino, that's definitely your perogative. i'm not a broker promoter, generally, in the slightest. and riversider's point is also well taken. i always kind of hated my broker on the sell side, because it seemed as though i was priced fairly low. but i sold very quickly, and he always made it up for me on the buy side negotiations.

Yeah I don't know if pricing is all its cracked up to be. This is a pretty well discovered market. The purist in me says if there was someone willing to pay more, they would have been there. Nothing has ever stopped a bidding war, when even the brokers were unaware of how quickly demand was accelerating.

Seperate topic, but it would be interesting to see research that compares comps
re FSBO
BANK REO
BROKER OFFERED
SPONSOR OFFERED

NYC has so many properties in close proximity, it would be interesting to see how the disparity or similarity of closing prices....

riversider,that would be interesting, but the info would have to be analyzed to hell to be important differentially.

neighbor selling. divorce. the latter hugely affects the non-broker world. as of course insider sales do for sponsor units, although it doesn't seem as though many tenants are buying their apartments.

A.R. given a large enough sample divorces etc would get factored out....

ceterus parabus...

riversider, there isn't that large a sample generally in NYC. think about it. less than a thousand sales most months. far less.

I wish I could find it, but I did see one "study" which showed Seller's netting less on FSBO than thru brokers on average.

I have to disagree somewhat with the idea that adding a seller's broker "bakes in" a price increase. If you have 2 apartments, one FSBO and one through a broker, which one is worth more? Obviously neither. You are assuming that the price will be higher because the seller has to pay the broker, but market is still market so the price should remain the same with or without a broker. Now, you will say "yes, but the seller could sell for 6% less and get the same money, so the buyer can get the property lower when it's by owner". Well, in my personal experience, that's just not the case: the people who aren't using brokers are doing so because THEY want the extra 6%. In fact, in my experience historically, that it's harder to get a low price off of FSBO sellers because they tend to be greedier and more unreasonable (again this is on average, don't say "well I bought a unit.....". Sure, you found the one who was reasonable, but that doesn't mean the other 90% were, it just means you ended up with the one who was willing to sell to you at your price).

To put it another way: brokers "buying" listings: a practice by which a broker overprices a unit in order to get the exclusive by telling the seller they can get more than other brokers told them. Well, how does that work without the greed of the sellers? So while the brokers played a part, it takes 2 to tango and the owners are the one's who make the final decision on pricing, not the brokers.

i generally think your economic theories are quite good.

the market will be the market until less than 90% of the sellers decide to hire a broker. in an effort to lower prices. not profit.

AR,
the yoda comment was 'only' sage like...a sexier taller yoda with tan smooth skin of a female variety. howse that, any better? And if you please...I really am interested in you answering my questions. I totally value your thoughts.

Well it's nice to have a buffering point for both the buyer and the seller. Kind of like diplomats or ambassadors working out a peace treaty. Commissions are usually split between the two and though one could argue there is less of that pie to "take off" in negotiating a price, I think it's negligable.

And for an example of what a buyer's broker can do for you, here is a sample of what 30yrs posted as a potential followup letter to a coop board that rejected the buyer of another thread.

"We are saddened by not being allowed to purchase unit X. We looked at apartments in over 50 buildings in this neighborhood, and this was the building we chose as to where we wanted to make our home. The hallways were clean, the staff was friendly, even the people we passed in the lobby and elevator seemed nice and happy. We're not sure we are going to be able to find another building we like as much because other Coops don't seem to take as good care of their buildings as you do this one.

Perhaps we did not properly explain what our situation was, either financially or otherwise. We have not purchased a Coop before, so we are not experienced in going through the process. But we still would very much like to live in this building. If there are any particular concerns regar4ding us or this purchase, we would be willing to do what we can to cure whatever the issues are. If the Board would like us to put some maintenance in escrow, we have no problem doing that. All we need to know is what the Boards concerns are and we will be happy to address them and do whatever we need to do to fit in with the shareholders in this fine building. As we've said, we really like it and really would love to live there"

Bravo 30yrs, you got game.

This is an excellent letter. That said, it reminds me why the coop structure has always made me a little queasy. Maybe I am a condo guy at heart....at a reasonable cap rate of course.

We just bought and closed on a co-op apartment. Earlier in the process, we had worked with a broker. He was a nice enough guy and was somewhat helpful and a hard worker, but we did feel that he was pushing us towards buying and not overly concerned with whether or not we were getting a good deal. We didn't like the pressure we were getting from him and decided to go it alone.

We ended up finding something for sale by owner. Another buyer with a broker bid higher than we did, but we offered 50% down and no broker fee, so we got the apt. after a big of haggling. I would definitely have a broker if I was selling, but my experience is that a broker was not necessary or particularly helpful on the buy side. As for the board approval process, this building was fairly straight forward. We were good financial buyers - although price was low compared to recent building comp. Maybe if the building had been on Park Avenue we might have needed the broker to help us out.

I have nothing against brokers though...some people need a broker to find the listings and schedule apartment viewings. But make no mistake - the buyer's broker wants you to sign a contract and close as soon as possible so he gets his money. You are looking for the right apartment at the right price. So, I'm not sure that your interests are totally aligned. Good Luck!

"Boards are nothing more than the lowest of the lows who got their asskicked in HS that get their jollies from people kissing their azzes for $0..... now /w the downturn... they are only going to reach deep down in their little hearts and pull out all their childhood hurt and take it out on every "buyer"/"seller""

And black people all eat fried chicken.

And Asians are all math nerds.

And all womeen are bad drivers.

And ... oh wait ... this was the stereotype thread, was it not?

Nycmatt you are indeed right for your job as a re broker. What kind of azzes are u picking up w/ your profession, the girl car salesman?

Tell me who spends hours and hours doing shit for free? Oh I know a unicorn riding re broker who's in this market for the next 3 years.

You can tell you're underlying unaccomplished blame it on everyone else w/o all the facts mentality from the Midwest going to townhall meetings w/ an ak47 using code words for foreigners, intellectuals, and females. Here's one for you, bet I can lay devil's advocate and at least make you symphathize w/ osama bin laden.

'Now, you will say "yes, but the seller could sell for 6% less and get the same money, so the buyer can get the property lower when it's by owner". Well, in my personal experience, that's just not the case: the people who aren't using brokers are doing so because THEY want the extra 6%.'

30-spot on. This is why so many FSBOs fail.

Part of the problem is that sales prices include the commission. That would seriously hurt brokers.

It makes logical sense. Why would the seller give you the 6% they are trying to save. Yes, and they are also self selected for greed and self-confidence. However, it would depend on the strength of the market. I still say the absense of a commission will net to the buyer some proportion of the commission. The data that says no may simply be bull market data.

Hey UWS, I just ended my apartment search (closing early Sept) and spent the 1st half without a broker and the 2nd half with.

At first I didn't mind searching for apartments and contacting brokers directly, SE certainly makes it easy enough. I also went to a bunch of open houses and met a ton of brokers that way, all of whom tried to get me to sign on as a client. Ultimately one or two stood out as very knowledgeable...knew details about buildings/boards/apartments that I didn't know (which eliminated a good number of units from my search). Once I started working consistently with a broker I was seeing a higher caliber of buildings and apartments and avoiding the ones that looked misleading in the pictures.

I really liked working with the broker but didn't see their value until the closing. She knew enough about the building, apartment, and previous tenant that she helped us formulate a bid...probably 10% lower than we would've done without her. During the negotiation the seller caved more than she did, saving us a bit more.

Considering her fee comes the seller, my advice is find an agent you like who is competent and let them help. I was also searching the UWS so if you need a rec let me know.

Kubiedoo- would love your recommendation. After reading all the comments I've realized it doesn't hurt me to have a broker and if one can help and is knowledgable, I'll do it.

I guess I'm just frustrated with my current situation, current broker isn't adding any value and is pushing me to make a decision b/c according to this broker, the market is going to skyrocket after labor day.

UWS - here's who we used. Highly recommended:

http://www.brownharrisstevens.com/agent.aspx?id=LXL

One last comment from me on this one...if your broker is pushing you one way or the other then they're not a good broker (IMHO). The broker represents you and should have your best interests at heart...they're almost all optimists when it comes to the market but if you can get one who's honest with you then they can be very valuable.

"One last comment from me on this one...if your broker is pushing you one way or the other then they're not a good broker (IMHO). The broker represents you and should have your best interests at heart...they're almost all optimists when it comes to the market but if you can get one who's honest with you then they can be very valuable."

To some extent I am 180 degree from you on this: a good buyer's broker pushes them to see listings which they have "crossed of" by looking at online listings, but the broker has a read on what's really important and "pushes' them to look at a ;listing they wouldn't have given their own choice. Only after looking at it does the buyer realize that they thought they wanted one thing, but now that they have seen this alternative, they totally changed their mind on what they are willing to buy.

30 years, I am so with you on that (consumer disclosure, I work at the same office as 30_years, and I couldn't sit near him if I didn't agree with him on most things).

I currently have an accepted offer with relo buyer clients who had strict Streeteasy computer parameters, bounced listings back and forth to me on the computer, flew out here and saw "their" listings with me, and then were guided by me to a listing that "violated" their computer parameters but stole their hearts.

A good buyer's agent listens to what their clients want, which may not be what they SAY they want.

ali r.
{downtown broker}

It's also they don't KNOW what's possible. Like people who want prewar alcove studios. Hen's teeth.

Or want prewar but don't know why, it's just they heard "it's better".

Or want a brownstone floorthru in the Village and don't know that most of the Village Brownstones were cut up into half floors and they will have a much easier time of finding a floortheru in Chelsea, because a higher percentage of the cut-up brownstones were done full floor there. But if the just look on the computer and keep their search to the Village, they will never be aware of what they COULD have gotten if someone guided them to exactly the apartment they always wanted, but it was just outside their geographical parameters.

That's another thing which is different now than a few decades ago: as a broker, you knew in your head listings because searching thru piles of paper was such a chore. But computer searches are very unforgiving: if you enter you're looking from 1,500,000 to 2,000,000 and some dumb seller/broker prices at 2,050,000, you'll miss it. Ther have been several deals that I've done where I priced things lower than I wanted to in order to squeeze into "parameter land". It's not nearly as bad with the much higher prices these days, but I'll give you an example for the early/mid 90's: I had a unit I "knew" was worth $205K - $210K. But where do I price it? $209K is an absolute idiot price, but $219K isn't that much better. the reason is you don't want to be at the bottom of any "price range" that people search, because you'll always end up being the worst apartment of the bunch and a hard sale. So on that one I bit the bullet and priced it at $199K firm (and got it) because carrying the unit for a year to get an extra $5K to $10K didn't make sense economically.