Brokers - Can They Be Totally Fazed Out?

In many other markets, there's an increased proliferation of FSBO options. Websites where people can post their own listings. I think the key would be someone creating a website where people could find FSBOs in one place. The market in new york is pretty transparent price-wise, so it's not clear how much value brokers add for buyers and sellers who can do a little leg-work on their own.

Of course, some brokers will always be necessary - not everyone will want or be able to go through the process themselves. But, definitely seems like there could be more FSBOs than there currently are.

fazed?

#3--chill out. they just made "ginormous" a real word.

#4, "fazed" is a real word, but the correct word/spelling in this context is "phased." Get it right.

Hmm... Interesting. I have real mixed feelings about brokers. They lie through their teeth and think they "benefit" buyers. They barely do anything for buyers. Many sellers need them b/c how else would one publicize the sale of their home? A good FSBO website is a great idea... might take a while to catch on with the right crowds looking to get big bucks for their units.

rcb220, you mean "really" mixed feelings. Adjectives are modified by adverbs, not by adjectives.

Everyone else, NYers won't shop for their own groceries, walk their own dogs, alternate-side their own cars, sign for their own deliveries, and once Japanese water-squirty toilets catch on, wipe their own asses. Do you seriously think they'll rearrange their schedules to sell their own apartments?

#7 when it comes to dollars and cents New Yorkers will do anything - so yes, I do think they would "re-arrange their schedules to sell their apts." Its money - something NY's know a lot about! Do you live in Brooklyn or Queens?

OP here: What I mean is that given the proliferation of information now available on apartments on the internet, brokers play less of a role in transactions. Thus, their commissions should be justifiably cut. Why should they get 6%? How about 3% for starters? It's not that hard to show an apartments for 2 hours on a Sunday.

Definitely I could see lower fees in the future. With inventory drying up, and buyers abounding, I can see the vultures scavenging for the scraps.

The brokers do not get 6%! The seller's broker gets 3% of the commission and the buyer's broker gets 3%, but the seller can negotiate this 6%. Sometimes it's 7%, 5% or 4% for that matter. The brokerage company gets half of the 3%, so the agent only takes 1.5% of the commission.

It may not be hard to show an apartment for 2 hours on Sunday, but what about showing 4 apartments? What about taking a client in from London around for 6 hours in a limousine that you're paying for and feeding, too? The client isn't familiar with Manhattan neighborhoods because the buyer has no idea of where they want to be? That's not working hard? A seller is going to miss a day of work to show a client who is only in NY in the middle of the week? People who have "real" money to spend would not dream of selling or buying an apartment without a broker. They're too busy making money. Marketing materials to share with buyers who live on another continent are paid for and sent by the brokerage firm. You cannot "feel" an apartment on the Internet. You cannot "see" what the building lobby "smells" like or see what's next door to the building. What does the block look like? Is there a methadone clinic on the corner?

There will always be a need for brokers for certain people, but those who are proactive & have "real" money would definitely try to do a FSBO if there was a website. Maybe Streeteasy should add a section on their webpage. I would definitely post.

#11, no one is denying that there are some transactions that involve a lot of work for a broker. But many apartments sell themselves, and fairly quickly. No reason for a seller to pay 6% for the latter type.

Indeed. For the run of the mill apartment, FSBO or a 3% broker will do. This is not rocket science. Maybe 10-20 6% brokers total for the city.

Real esatate broker commissions in the UK are closer to 2%. I have heard one NY broker tell me that in the UK you would not get the same 'service'. What services are we referring to here, exactly?

And why have commission levels not declined in percentage terms as property prices in New York have doubled? Has the work involved in selling a $1mm apartment doubled as its value has doubled to $2mm? Why is there no real competition on commission levels between the major agenices in New York. If it smells, looks, walks and talks like a cartel ....

Streeteasy should lets people post FSBO!!!

I hope they can be phased out. Many of them are shady and put up fake ads to get customers. They are one step above used car salesmen.

#11--- We're talking about the run of the mill schmuck brokers who sell garden variety NYC apartments, not the dolly fucking lenzes of the world. You know it, I know it, we all know it. Most, hell, the vast majority of brokers are hacks. You should attack them, not us, for giving you a bad name.

I sold my apartment on my own without a broker. Not too difficult at all- just posted an ad in the NYT and ran a few open houses on the weekends. All of my ads had the standard "No Brokers Please" on them and guess who shows up to the open houses anyways? That's right- lots of brokers coming to pitch me on their "services". Each time I would have to explain that I don't need a high priced doorman at 6%.

It only took a few open houses and the offers came in. Picked one and had the attorneys go to work. Only cost me $1500 to sell my apartment (not including all those taxes - but that's for another thread).

Some brokers will probably say that I didn't get top dollar for my apartment - but that's just not true, I sold close to my ask price and had multiple offers. But of course anyone who has even the most minimal math skills will tell you that you don't need to squeeze every last dollar out if you're saving 6%.

Yup. Let's get rid of the vultures!

number 11, a broker that is worried about his/her job !!

A broker sold my apt. - showed it three times to all local walk ins into her office two streets from where I live - and I paid $45,000 commission! That really isn't fair at all.

Yeah. I'm about to fire my broker too!

In addition to NY Times, you can also try http://www.zillow.com/ or http://www.forsalebyowner.com.

I just sold my apt. through a broker and got $10,000 above ask - was very happy with the experience. She did everything and is now working with the buyers in putting together a board package so there are no snags with the board. She also reviewed the financials of all the people who bid and disqualified 2 saying they would never pass muster with the board and might even have problems with financing. I am not sure I could have done this type of review. In the end I think she added a lot of value and I did not have to do anything but keep the apt. looking good.

#25 is making up a story. This is a broker talking. Jesus.

Even in LA they avoid Brokers and use only attorneys.
pretty soon streeteasy will let us all list For Sale By Owner!

And Yeah #25, THAT WAS A PRETTY-DAMN-BAD DISGUISE...

Sorry, but I can see what a street looks like between Google Maps-StreetView and Google Earth. Services like this will only get better with more frequent updates and the ability for 3rd party web sites to mash them up with listings etc. I can research a property and the other properties on the street better than most brokers can - PropertyShark somebody, even the better brokers rely solely on this - again these services will only get better and more interactive. Check out brownstoner.com, whenever a listing is posted you get feedback from several punters who have actually seen the property and can tell you why the price is low i.e. it stinks. Buy side brokers are as good as extinct, and soon sell side brokers will largely be too.

Unless a broker has some non-public insight - and (s)he will need to be able to sell her insight to justify fees - broker commissions are going to get harder to stomach except in the most complex or opaque transactions.

#25 Here - I am not a broker - really, I just sold my apt. through Elliman and really did have a great experience. Not all brokers are the same - stay with the larger firms - Elliman, Corcoran, Stribling etc.

I just sold my apartment FSBO and we had five offers after one showing. We were willing to work with buyers with brokers, but made it clear that the offers were all net - they needed to pay their brokers separately. The highest offer was from a seller using a broker and the broker couldn't close the deal (isn't that what they're for?) so we went with our next offer (no broker, still 20K above asking) and have a signed contract. FSBO isn't that hard - you list in the Times and on Craigslist, that's pretty much the bulk of the work. We sold our place for approx 1000/sf in a neighborhood that averages around 750/sf.

#30--what neighborhood?

If you have an apt. in good shape that is priced right, I agree, you can do a FSBO easily enough. But then if a co-op is involved you have to deal with a lot of issues - are the buyers fnancially qualified, what type of person will the board approve and you need someone to review and help the buyers put together their borad package. The larger brokerage firms have usually sold in most buildings so they know a lot about what will work and what won't with the boards. I was totally uninvolved with the board in my building but the broker knew they would never approve one buyer because of his lack of liquidity. In my case it was just easier to have the broker attend to all these things. She did a good job.

whoami

I have a friend who contacted a few brokers and got them to estimate what the apartment was worth. He got a range of 390k to 415k for an alcove studio in murray hill. He then decided that he would FSBO it for 3 weeks and see if he could get 415. If it didn't work, he was going to go with the favorite broker he interviewed.

He posted his open house on craigs list and in the NYT online classifieds. He had 3 offers after his first weekend. He asked for best and finals that week, and ended up selling for 425 with no commision.

Now wouldn't it have been a shame if he had paid a broker 6% of that? I plan on following his example when I sell my place.

Was your friends alcove studio in the Carlton Regency? That is where I just sold (with a broker) and that building basically sells itself. Great full service building, smack in the middle of town with reasonable maintenance. Because it is not a "hot" neighborhood the apt. prices are still reasonable. So, I would not use this as a fair example for others selling without a broker. Plus, your friend now has to deal with getting a suitable board package submitted by the buyer, which I can tell you is no walk in the Park.

The funny thing about board packages is that they tend to go through a managing agent first. The managing agent will let you know if things need to be added, and make sure you've got everything before sending it along to the board. The seller should have a good sense from the board of what their financial requirements are and presumably used those as part of picking a buyer. A little more work? certainly. Is it worth 6% (in this case, "only" $25K) to pay someone else to do it? Not for most people I know.

why hasn't a website been created exclusively for nyc fsbo's? i have to think there would be a ton of interest

Probably because there would be a huge backlash from the brokerage community.