buyer's broker-any benefits of having one, and who pays the commission?
Started by msne1234
over 18 years ago
Posts: 3
Member since: May 2007
Discussion about
We are first time buyers, so maybe this is a stupid question. We've been searching for an apt without one so far (using this site, and several others). Basically, if something is posted online, I'm pretty sure we got that covered, including getting comparables, etc. We don't feel like to absolutely NEED one, since we don't mind doing our own research. However, I'm wondering if we are missing... [more]
We are first time buyers, so maybe this is a stupid question.
We've been searching for an apt without one so far (using this site, and several others). Basically, if something is posted online, I'm pretty sure we got that covered, including getting comparables, etc.
We don't feel like to absolutely NEED one, since we don't mind doing our own research. However, I'm wondering if we are missing anything, like, if something particularly good comes on the market, it might end up getting snatched before the listing becomes available to the general public. We are also seeing a lof of buyers WITH brokers at open houses, even for new developments (obviously, it's not difficult to find those listings, so WHY would anyone use a broker and pay them to bring them over there?)
We haven't used a broker so far thinking that we'd have to pay him/her. But now I'm not so sure. What's the story? Does the seller always pay the broker? (i.e., 6% total (or whatever it is), 3% to seller's broker and 3% to buyers broker?) Or, if the buyers are not using one, does the seller's broker get the full 6%? Can we get an add'l discount for not using one?
If a broker is free to buyers (and is this really true?), is there a reason NOT to use one? I have noticed that some listings state "no brokers", "will not co-broke", etc. So, if we end up working with a broker, are these listings off limits to us? Or can we just go there on our own in those cases (or is there still an obligation to a broker that we'll have)?
Thanks so much!
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Response by anonymous
over 18 years ago
Posts: 47
Member since: Apr 2007
Some people think that not having a broker gives you more room to negotiate because it's one fewer person who needs to be paid at the end, but the seller does pay both the selling and buying brokers; that 6% commission is usually split. The advantage to using one is they can often be a major help, not only with finding apartments, but with providing insider knowledge about different buildings and neighborhoods, negotiating a price, handling paperwork (prequalification, board or condo package, etc.), and putting out any fires along the way. That would be a GOOD broker. They can be especially helpful if you are new to buying real estate, particularly in NYC.
I don't know what the deal is with "no broker" listings.
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Response by anonymous
over 18 years ago
Posts: 29
Member since: Mar 2007
I have to say that having just gone through the process of buying a coop in Manhattan (closing soon), my buyer's broker was invaluable. This was my first time buying in NY -- I own elsewhere, where I did an FSBO as seller. I will say that I did not like the FSBO experience and would (as a seller) prefer to pay a broker to handle the negotiations. Our broker was cool, calm, collected, and definitely on the ball. Great communication, very candid about places but without at the same time influencing our own decisions. She was older with a lot of experience and so could be warm and low key -- a guide patiently answering a million questions. When it comes to assembling a board package (and even some condos now require similar things) she made it so much easier. Plus she knew how to "talk" to other brokers and we got a very clear picture of where we stood in a multiple offer situation, which we ended up succeeding in.
At one level, of course you as buyer help pay for the broker, since no matter how the commission is officially charged, since who's paying the money? Not the seller! So the price figures in that 6%, and the only money changing hand is from your pocket to the seller's. But a good buyer's broker definitely earns it. And we never ran into any "no co-broke" situations; in fact if you ask around I think you'll find that something like 85-90% of deals in NY are co-broke deals -- it's utterly commonplace. I would highly recommend that you use one, but I would also not be afraid to interview a few and use someone you really like, moving on quickly (without wasting anyone's time) if you don't feel a fit. You can learn so much more about the process and thus make better decisions by having someone on your side.
In additon to a very good real estate attorney, of course...
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Response by anonymous
over 18 years ago
Posts: 1905
Member since: Apr 2007
No such thing as a stupid question; you know that! I think it makes all the sense in the world to have an experienced professional on your team with such a large purchase. Many people will say otherwise & that's fine but myself, I want a pro on my team. PERIOD.
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Response by anonymous
over 18 years ago
Posts: 1183
Member since: Feb 2007
The issue here is that you have to shop as thoughtfully and assiduously for the right broker as you have been doing for apartments. You must research them, check references, review their track record, and see how the chemistry is between you and the broker. You must be assured that in addition to trying to close the deal and get their commission, your broker is also truly looking out for your best interests, that they're as transparant and honest as possible, and that they can work well with others in terms of moving the process to completion.
I do agree though, that the most important part of the equation is your real estate attorney. Lock in your attorney first.
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Response by anonymous
over 18 years ago
Posts: 98
Member since: Apr 2007
I had a broker when I was looking at an apartment. I saw a listing for a place that looked great. When I asked my broker if she could set up an appointment to see the place she called me a few days later and said the seller would not accept a cobroker. I told her no problem I would set the meeting up myself. My broker then told me I couldn't because of the 30 day agreement I signed and that I would end up having to pay her if we decided to buy that apartment.
Needless to say that totally pissed me off and I will not be using a broker for my next apartment search. It really gave me an unpleasent view of the real estate business. So yes there are places you might miss out on if you don;t have one, and places you might miss out on if you DO have one.
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Response by anonymous
over 18 years ago
Posts: 631
Member since: Sep 2006
I'm a first time buyer and used a broker, found it very helpful, esp in NYC with all of the potential pitfalls. The key is to find a GOOD broker...some may not do much except send you a list of open houses, if that. And some may sabotage your better interests by pushing for you to take a place if you really don't want to, just so they can get the commission.
Another messy pitfall is dealing with listing brokers. If it's a hot property some may not be as willing to submit your bid as they would have to split the commission (of course they're supposed to submit ALL bids to the seller but unfortunately this is not always done and it's difficult to prove).
There was a post on here recently about a buyer who got into a pickle by seeing a place first without a broker, then enlisted one, which enraged the seller's broker. You may want to read it just to get an idea of some pitfalls/games brokers play.
But a good buyer's broker is invaluable. Good luck!
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Response by anonymous
over 18 years ago
Posts: 104
Member since: Jan 2007
We found the buyer's broker completely useless. All they did was tell us about listings we saw on the internet. The days of us not having a database of listings are over thanks to the internet. Moreover, in many case the sellers has a lower/different commission for a direct deal (w/o a buyer's broker). We bid without a buyer's broker and got a deal over a higher bid from a completing buyer's broker. The seller got more money in his pocket with our deal even though we were under the highest bid.
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Response by anonymous
over 18 years ago
Posts: 4
Member since: Feb 2007
I recently bid on an apartment using a buyers broker and have to say, I think it hurt me in the end. I was bidding against a woman who wasn't using a broker and I think the seller's broker played favorites (which they are not supposed to do, but have found out it happens all the time.) My broker didn't fight for me, didn't provide me with any information and gave me very poor advice. I would not suggest using a broker- I have a hard time trusting them.
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Response by anonymous
over 18 years ago
Posts: 277
Member since: Jan 2007
agree that a buyers broker is a waste . . . I think we were in a less negotiable position with a new dev we just bought because of it; never used on ein the past and the only reason we used -- and made clear upfront -- was if they brought us listings we hadn't already seen, which she appeared to have until we found out they were outdated!
Some people think that not having a broker gives you more room to negotiate because it's one fewer person who needs to be paid at the end, but the seller does pay both the selling and buying brokers; that 6% commission is usually split. The advantage to using one is they can often be a major help, not only with finding apartments, but with providing insider knowledge about different buildings and neighborhoods, negotiating a price, handling paperwork (prequalification, board or condo package, etc.), and putting out any fires along the way. That would be a GOOD broker. They can be especially helpful if you are new to buying real estate, particularly in NYC.
I don't know what the deal is with "no broker" listings.
I have to say that having just gone through the process of buying a coop in Manhattan (closing soon), my buyer's broker was invaluable. This was my first time buying in NY -- I own elsewhere, where I did an FSBO as seller. I will say that I did not like the FSBO experience and would (as a seller) prefer to pay a broker to handle the negotiations. Our broker was cool, calm, collected, and definitely on the ball. Great communication, very candid about places but without at the same time influencing our own decisions. She was older with a lot of experience and so could be warm and low key -- a guide patiently answering a million questions. When it comes to assembling a board package (and even some condos now require similar things) she made it so much easier. Plus she knew how to "talk" to other brokers and we got a very clear picture of where we stood in a multiple offer situation, which we ended up succeeding in.
At one level, of course you as buyer help pay for the broker, since no matter how the commission is officially charged, since who's paying the money? Not the seller! So the price figures in that 6%, and the only money changing hand is from your pocket to the seller's. But a good buyer's broker definitely earns it. And we never ran into any "no co-broke" situations; in fact if you ask around I think you'll find that something like 85-90% of deals in NY are co-broke deals -- it's utterly commonplace. I would highly recommend that you use one, but I would also not be afraid to interview a few and use someone you really like, moving on quickly (without wasting anyone's time) if you don't feel a fit. You can learn so much more about the process and thus make better decisions by having someone on your side.
In additon to a very good real estate attorney, of course...
No such thing as a stupid question; you know that! I think it makes all the sense in the world to have an experienced professional on your team with such a large purchase. Many people will say otherwise & that's fine but myself, I want a pro on my team. PERIOD.
The issue here is that you have to shop as thoughtfully and assiduously for the right broker as you have been doing for apartments. You must research them, check references, review their track record, and see how the chemistry is between you and the broker. You must be assured that in addition to trying to close the deal and get their commission, your broker is also truly looking out for your best interests, that they're as transparant and honest as possible, and that they can work well with others in terms of moving the process to completion.
I do agree though, that the most important part of the equation is your real estate attorney. Lock in your attorney first.
I had a broker when I was looking at an apartment. I saw a listing for a place that looked great. When I asked my broker if she could set up an appointment to see the place she called me a few days later and said the seller would not accept a cobroker. I told her no problem I would set the meeting up myself. My broker then told me I couldn't because of the 30 day agreement I signed and that I would end up having to pay her if we decided to buy that apartment.
Needless to say that totally pissed me off and I will not be using a broker for my next apartment search. It really gave me an unpleasent view of the real estate business. So yes there are places you might miss out on if you don;t have one, and places you might miss out on if you DO have one.
I'm a first time buyer and used a broker, found it very helpful, esp in NYC with all of the potential pitfalls. The key is to find a GOOD broker...some may not do much except send you a list of open houses, if that. And some may sabotage your better interests by pushing for you to take a place if you really don't want to, just so they can get the commission.
Another messy pitfall is dealing with listing brokers. If it's a hot property some may not be as willing to submit your bid as they would have to split the commission (of course they're supposed to submit ALL bids to the seller but unfortunately this is not always done and it's difficult to prove).
There was a post on here recently about a buyer who got into a pickle by seeing a place first without a broker, then enlisted one, which enraged the seller's broker. You may want to read it just to get an idea of some pitfalls/games brokers play.
But a good buyer's broker is invaluable. Good luck!
We found the buyer's broker completely useless. All they did was tell us about listings we saw on the internet. The days of us not having a database of listings are over thanks to the internet. Moreover, in many case the sellers has a lower/different commission for a direct deal (w/o a buyer's broker). We bid without a buyer's broker and got a deal over a higher bid from a completing buyer's broker. The seller got more money in his pocket with our deal even though we were under the highest bid.
I recently bid on an apartment using a buyers broker and have to say, I think it hurt me in the end. I was bidding against a woman who wasn't using a broker and I think the seller's broker played favorites (which they are not supposed to do, but have found out it happens all the time.) My broker didn't fight for me, didn't provide me with any information and gave me very poor advice. I would not suggest using a broker- I have a hard time trusting them.
agree that a buyers broker is a waste . . . I think we were in a less negotiable position with a new dev we just bought because of it; never used on ein the past and the only reason we used -- and made clear upfront -- was if they brought us listings we hadn't already seen, which she appeared to have until we found out they were outdated!
won't do it again