does buying direct from sponsor w/out a broker entitle buyer to 3% lower price?

No is "entitled" to sh-t. Life is a series of negotiations.

Wrong kyle. Aboutready negotiated an arms-lenght market rate lease with her landlord. But she is entitled to treble monetary damages from a lawsuit that has nothing to do with her.

She is also entitled to break her toilet seat and get a new one.

Is the question really whether the seller's agreement with the seller's agent allow the seller to only pay 3% to seller's agent in the event there is no buyer's agent? In other words, if you paid asking and said nothing...and had no broker...what would the seller's agent get?

It seems to me that I'm saving the sponsor $$ by not having a broker involved. am i wrong?

If there are no brokers involved whatsoever, I guess that you can try to defend that argument.

Try your best - in dealing w/ brokers, they seem unimpressed with the "no buyer broker" shtick - why should sponsors be any different? Greed is a tough habit to break.

The listing agreement between the broker and the seller is signed before you ever show up as a buyer. Some listing agreements are "stepped,' and allow for a lower commission if there's no buyer's broker. Some aren't, and if you show up without a buyer's broker, the listing broker takes the entire commission.

Since you don't know what you're going to be dealing with, I would recommend using a buyer's broker if you want one.

ali r.
DG Neary Realty

Its a new development. Im dealing direct with the developer

In this market I don't see any reason not to aggressively make the point -- the truth is that either the developer or the selling agent (depending on their agreement) is going to get 3% more than if you had showed up with your own agent. Why shouldn't you extract that premium?...

As a young lawyer , in my brief career that lasted three years, the first year lawyers had to do real estae closings for individuals who were otherwise business clients of the firm (ie it wasn't the main business), and a more senior lawyer told me, "the first rule is, screw the broker whenever you can", if some dispute arises about who is to pay for something.I don't get into broker bashing, but I thought tha was funny.

any other thoughts?

Why is anyone "entitled" to any discounts? The developer is just as entitled to save on the broker fee as any of your presumed entitlements.

I guess theres different ways to look at it. fair enough

Marco.... If you are smart enough to think it, then yes you deserve it. If like stakan you negotiate against yourself all the time..... Then as always your opponent will win, which is exactly the opposite of a fair market system.

So in closing if you r smart, but then see the other side, then see your side post seeing this side then counter the other side argument but then negotiate against yourself, then you are a communist.

evry battle is won before its even fought

marco- the sponsor will negotiate on the same level.. they need to keep the prices in the building consistent.. and if people close on one floor for x price per foot, and then the next floor for a significant difference, then it wont appraise properly, etc.. sponsors would lose the brokers trust, etc... the prices are set regardless..

also, diff sponsors are negotiating diff amounts- sometimes it takes a knowledgeable broker to know where each sponsor stands. most sponsor's expect buyers to be brought in by brokers anyway though.

I figure if I start at zero per sq ft they'll have to counter right?

marco, did you find a shoe box or something a bit grander?

jlnyc, i'm not sure you're correct. in some new developments the discounts that are being given seem very inconsistent.

w67thstreet
about 3 hours ago
ignore this person
report abuse
So in closing if you r smart, but then see the other side, then see your side post seeing this side then counter the other side argument but then negotiate against yourself, then you are a communist.

w67thstreet, I like the way you think. I know you've felt left out, so I'll be watching you:

http://www.youtube.com/watch?v=R6JLHZ3eJZs&feature=fvw

about ready- i agree discounts have been inconsistent in new developments.. but sponsors and brokers repping those sponsors rely heavily on brokers bringing in customers- i have been told if a broker who works for a smaller brokerage (let's say core group) brings in a buyer to a development being marketed by core, their total commission is less.. rather than a DE broker bringing in a buyer to a DE development, and them taking less.. and it is not like a developer will accept a lower price on their building bc it is being brought in by a core broker vs de broker... it would mess things up withint he broker community, and disrupt sales.. buyers will always talk regardless.

jlnyc50
you mean, "buyers will always talk irregardless"

maybe i'm just confused, but marco is talking about using no broker? i understand the in-house broker issues, etc., but i thought that in many of the developments that system has been fraying, with developers needing to pay something close to regular market brokerage rates.

but marco, that is something to consider. in most cases brokers don't receive 3% (or 6%) for new developments. i don't know where it is at just now, i'd heard that the amounts had been increasing, but it's still unlikely that it would be 3%.

jlnyc, i just didn't think that the comment regarding prices being set was so accurate currently. in some developments some people are paying close to top prices, and others aren't. it always fascinates me that some would be willing to do so (and i'm not talking about initial closings, i'm talking about later purchases).

yeah AR..I may have found somethin. now I really wish my screen name wasnt real becuase they may see me stategizing. lol

like I was saying..if the sponsore would have to pay a commisson to a broker at the very least in the scenario of No broker that should allow for more price negotiation. at least in theory

We had a similar situation - new development, we didn't use a buyers broker. Problem is as soon as you declare yourself with a bid, they know whether you have a broker or not. So they will do whatever negotiation they want, and tell you they have 'factored this into the negotiation'. Unless you have a really good comp - same line, one floor up, who used a broker - I think you will have a hard time separating out the usual discount versus your extra 3%. Frankly the best answer is to get a friendly broker to represent you and pass the money back to you. I assume there are issues with that, so it probably doesn't really work, but that seems to me to be the only way to get the 3% definitively. Otherwise, I think you can say what you want, and you may get a bit of latitude, but it gets lost in the noise.

this may be a dumb question this late in thread, but Marco, and you dealing directly with the sponsor/developer him/her self, or an agent representing said sponsor/developer?

a sales agent I guess. I just wnet inot the sales office on the property of the development

marco, I am confused: you are said that you were dealing "directly with the developer" and then that you went to the sales office. I thought that you could not negotiate directly with the sponsor, unless you were a broker. I also remember that you posted a few days ago that this market is "toast". I am curious: why did you change idea in such a brief period of time, are they offering you a 50% discount or so?

Marco, I am in contract in a sponsor sale and I used a broker and each one of them had to take a cut to get the deal done. It actually doesn't matter whether there is a seller's broker only or whether there are two brokers involved. This is your market. Everything is negotiable. I am quite sure that most sponsors with most apartments are willing to listen if your offer is real.

johnyhoops I agree...

Highend00..thank you for apying to attention my posts. its quite flattering. then you should have also noticed my recent posts that its become quite clear that world regulators will keep changing any rules to make problems go away..ie the Basel Comittee..therefore i now see a limited downside risk. if i buy something today and it goes down 30%..Ill cry for modification like everyone else..sad but true..when in rome do as the romans.

There is a way of getting your 3%: when you make an offer, make it conditional upon seeing the brokerage agreement and the seller agreing to your price AND the broker agreeing to cut the commission in half. The worst that can hapen is they will say 'No'. The broker will try to charm and snivel but as long as you hold firm (and your offer is realistic within the prevailing market conditions), you will be fine.

I would certainly ask for it. I was going to do so for an offer I was putting in without broker.

Use it to negotiate, but in reality, there are so many costs involved, they will never give you the bottom price anyway...their profit margin being the biggest 'cost'. I agree with ukrguy, but only after you have negotiated all the way otherwise, then pull out the 3%

I don't know if this applies since it was an "insider" deal on a co-op but I didn't get any discounts for not using a broker.

a little different. why would anyone use a broker when buying a co-op as an insider?