"Exclusive" listing

There is a broker involved- the sellers broker- and you get no "discount" by going to them directly. If you have a buyers broker, the commission would be split between the two brokers but since you don't, the full commission goes only to the listing broker as it's a direct deal. Yes, the listing is an exclusive but if the brokers firm is a part of REBNY (most big ones are) then they have to co-broke the listing with a sellers broker. You should find yourself a good buyers broker to look out for your best interest. There is no advantage to going directly to the sellers broker as they are looking out for the sellers first. I say that as I have done direct deals and sold listings through an OH and it can get complicated when you represent both sides and something goes wrong. These days, something will do wrong.

It's doesn't sound like you're being denied access to the listing, but rather that the listing broker is just telling you to not ask for half the co-broke (probably two and a half or three percent) because you showed up without representation.

ali r.
DG Neary Realty

You cannot and will not be denied access, of course not. The brokers split the commission according to industry guidelines.

What you don't get to do is ask the seller's broker to take a smaller commission so you, the buyer, can spend less on something you want.

Why not? Well, you didn't hire that person. You can't go to Starbucks and ask the barista to make less money so you can get a cheaper mocha latte frappe.

The seller's broker works for the seller, not for you. You forget this at your expense.

If you want a broker working for YOU, you can go get one--and I too think this is a good idea. Just make sure they disclose that they are a BUYER'S broker.

Have them put it in writing just to be sure. Tell them to sign the DOS form and disclose as a buyer's broker. If they stare at you blankly get someone else.

Otherwise you end up in a situation where the broker you think is working for you, who is busy showing you properties, is actually working for the seller.

{Manhattan real estate agent.}

An 'exclusive listing' means that one person (or maybe two people or a group) represent the listing. If you want to see it you need to call them. The opposite is an open listing, in which there is no one broker. The vast majority of apartments in Manhattan are exclusives. At the end of the day, any brokerage firm you go to will have access to every other company's listings, and they have to by law (listings must be shared within 24 hours).

If I can just repeat a little of what has been said. If you are a direct buyer, this enables the seller's broker to get a full commission (typically 6%). When I have an exclusive agreement with a seller, I include that if it is a direct deal I will only get 5%. Why? Well, this is kind of a perk for the seller since they would be getting a slight discount on the commission while I would in fact be getting 2% more than I would if it was a co-broke.

However, not using a broker because you think you can use this 'extra' (which it is not) commission as a negotiating tool is an incorrect assumption. Using a buyer's broker is incredibly beneficial for you since they probably know a substantial amount of information about buildings you are planning on looking at and could let you know which buildings really do match what you are looking for. The biggest help is that if you have a question about an apartment, your (buyer's) broker is the only person you ask and they will in turn contact all the other people on your behalf. If you go see/inquire about a bunch of apartments you can expect to get calls and emails throughout the day which can be daunting. When it comes to doing a board package and obtaining important documents, your broker may already have them on hand. And lining up several apartments to see is no harder than saying, "I would like to view apartments for X hours on this day." In a nut shell, while you CAN do it all yourself, you are essentially trying to do the work of a broker when you aren't one. By no means impossible, but it can (and most likely will) get frustrating.

My suggestion: find a broker who uses StreetEasy as well. That way you can have a saved RSS feed/search and when a new listing pops up for you it will also pop up for him. That way you are both on the same page and can discuss everything in real time. All these websites (StreetEasy, Property Shark) are an amazing source of information, but knowing how to filter it properly is the challenge.

When you are talking about commissions keep this in mind, if you have found your dream apartment which you plan on being in for years and years, do you really want to be kicking yourself because you didn't get it for 1%-2% of the price? There are very few cons and a lot of pros to using a buyers broker.

Best of luck on your hunt!

(Matthew Russell - Brown Harris Stevens)

From the tone of the recent responses, I would assume they are all from people in the industry. However, my question stems from this: I was told in, in an e mail, that: "Finally, a buyer's broker has nothing to do with the purchase price. This is an exclusive with -----------, and the full commission comes to us." Hence my question. If this is true - why would MY broker have any incentive to show me such an apartment? Or, perhaps (and I shudder to think that transparency is not a concept widely accepted in the RE world),this is yet another statement from the "gray zone".

I could be wrong, but I think the email meant that, having contacted the listing agent directly, you now have a direct business relationship with that listing agent, and it's too late to introduce a buyer's broker who expects a commission split.

sjtmd - we're also buyers and have been solicited a couple of times in this way. My best guess is that the listing agent is trying to incent you to not bring in a buyer's broker. We've only seen this situation in new condos, but I wouldn't be surprised if it exists even for co-ops. I'm not sure if they're breaking any rules by doing this since I'm not a broker.

As a buyer, I'm surprised at how many (brokers I guess?) on this thread advocate for a buyer's broker as representing the buyer's interest. Maybe that's the sales pitch but in reality, the seller pays the buyer's broker and the buyer's broker's fiduciary responsibility is to the seller. Even well-meaning buyer's brokers are going to be swayed by incentives. Unless you are from out of town, you have the time and means to go to open houses and research buildings yourself. This is not difficult or even particularly time-consuming given the amount of the investment. For the health of the building, you need a mortgage banker who lends in your target area and a lawyer, not a broker.

As an example of this broker incentive issue, I have friends (sellers) who were not getting a lot of offers on their condo so they switched to a seller's broker who offered to take less than 50% of the commission in the split with the buyer's broker (and advertised as such). In the following week, they had more viewings than they had had in the prior six months and received a full price offer for their unit 3 days later. I'm sure that those agents meant well, but you can't argue with incentives.

I think you should read Kylewest's most excellent thread on negotiating before you go about talking to brokers. It's not a very good tactic to be antagonistic about their commissions from the outset. You can back them into a corner and kill the negotiating before it even gets started.

@sjtmd You may have misunderstood what the listing broker has told you. He/She is stating the entire commission comes to them if you are not represented, if you have a buyers broker, they would be entitled to half the commission at closing.

That said there are extremely rare circumstances where a broker is listing a property that is not, cannot be co-brokered because the sellers is only offering a 2-3% commission to the listing agent, no more. In this case there would not be enough to share. This is very, very rare and yes I have come across this, just once in 20 years for a listing at 99 Jane street. That said the listing did not sell and eventually came on the market as a "traditional" exclusive and was then sold.

I started a company that offers buyers like yourself a monetary advantage, as well as traditional representation for engaging the services of a "buyers" broker. I rebate a portion of my commission back to my buyers, the % depends on the level of service YOU require/request. You receive a tax free rebate at closing.

Keith (Broker)
http://nycrentrant.blogspot.com/2010_01_01_archive.html

It sounds to me that the selling broker is:

a) explaining to you that if you have no buy side broker, the commission only goes to the listing broker and has nothing to do with the ultimate purchase price

b) yes, trying to push you to work directly with them

Lets be real here, shady or not, most brokers prefer a direct deal because they will make more money at the end of the day while still servicing the listing. Why not right? You didnt do anything wrong should the buyer that purchases the place have no broker representation. Then you got some agents that mess around with the sales process to give a direct deal MORE OF A CHANCE of occurring. That is where ethics boundary is crossed, and yes, it does happen out there.

The fact is, you have every right to bring in a buyers broker and even request a CHANGE in broker representation, as long as you are not too far into the process (say submitted a bid already and started negotiations, that is too late)...just fill out a CHANGE OF BROKER form with REBNY and present to the listing broker and their sales manager, NOTHING THEY CAN DO!

http://www.urbandigs.com/change-of-broker.doc

REBNY CODE OF ETHICS CLEAR STATE: "In the event that a customer has already visited the property the exclusive agent should advise a scheduling cooperating co-broker of that fact. This resolution is not intended to encourage buyers/tenants to willfully abandon one agent for another. Co-brokers must not attempt to persuade a customer to revisit a property with them rather than with the original showing exclusive agent or showing co-broker; a reshow with a different agent should only take place under circumstances in which a buyer/tenant has reason to feel abandoned or inadequately represented by the original showing agent.

In the event that this situation does arise, the second co-broker should obtain a letter from the buyer/tenant indicating that the buyer/tenant has viewed the property with one broker but wishes to return with (name of new broker). This letter should be directed by the second co-broker to the exclusive agent and the exclusive agent's manager. The exclusive agent, as the fiduciary of the seller/landlord, should do nothing to discourage or create awkwardness for the buyer/tenant."

Now another fact! MOST, not all, but MOST listing agreements have a tiered payout structure: one scenario for co-brokered deals, and a slightly discounted payout for a direct deal. Flat 5% or 6% deals, outside of under the 1m category, are very difficult to get these days. Brokers cant discuss this for fear of price fixing anti-competitive practices. The reality is commissions are negotiated up front for the agreement, and perhaps even a bit more as the deal progresses to get it done.

I think this broker is just letting you know that the commission is not split with any other broker if you choose to work on your own, and that the false perception of a 3% better deal because you have no broker, is not the case and doesn't affect the purchase price the seller will ultimately agree to.

I think the thing we haven't addressed here is the Manhattan vs. outer boroughs question. Sounds like all of us answering are Manhattan agents, and we are telling you to use a buyer's broker because the service is paid for by half of the co-broke.

That's assuming that the listing agent WILL co-broke, which pretty much assumes that they're in Manhattan and they're a member of REBNY, the Real Estate Board of New York, which is our trade association. But the other possibility is that we're dealing with a non-REBNY broker in an outer borough, and what they're saying is don't bring a buyer's broker because we won't pay them.

The OP can clarify, but this is starting to have a brownstone Brooklyn smell to me.

ali r.

agents typically get paid 1 or 2 points less when there is no buyers broker involved.

if they don't want to play ball, go get a broker and ruin their day.

got a friend who is a lawyer? they are licensed brokers as well I believe... maybe you can work something out lol

p.s. forgot to mention, it sounds like the broker is just lying to try to get you to back off a reason for a price reduction. imagine that, a broker, lying.

To get back to the main question, "When trying to negotiate a purchase price, a seller's broker states the listing is an "exclusive", "and the full commission comes to us". If that is the case, and we did have a "buyer's broker" why would we be shown such a listing?"

The broker probably said that because you were coming direct. If another broker brought you there they would split the commission 50/50. If you work with a broker who is affiliated with REBNY that is how it will go down. Simple.

"Are potential purchasers denied access to such "exclusive" listings because there is no commission incentive?" Short answer: No. Your buyer's broker wants to show you as many things as possible so you can buy an apartment.

Getting a direct deal is great, but most of the time it is another broker that brings the buyer and the seller's broker is glad you brought them.