Having a broker vs. doing it on your own

if you have time to do your own searches and research, do it yourself. I even think there are websites that can help in this regard :)

I dont think you need a broker in a buyer's market, but that's just my opinion -- plus if you arrive without a broker, you can negotiate 1, 2 or 3% off the top.

what are you looking for unit-wise?

Looking for a 2br in the village. Everything we've seen so far has been pretty crappy or overpriced (>$1300 sq/ft). But we're hopeful.

Good luck - personally, I would never use a buyers broker, but you never know, they may search harder and find you something you would never have seen, and may be able to help negotiate price, if they are good. So, in the end, if you trust them and believe they are doing their job, it may be worth the money.

All things considered, I would rather do it myself.

After the experience of placing several offers and going to dozens of "by appointment only" showings, I would never want to do this on my own if I had the choice. Unless you love picking up the phone and dealing with other brokers all day long (who will pretend to be your best friend when they discover you don't have a broker), then you might as well have someone represent you. Not sure how much more negotiable apartments are when there's no buyers broker. Again, that conversation has been beaten to death on here time and again.

First off you can only negotiate down based on no buyers broker if sellers broker is willing to give up part of their commission. Last time i had a sellers broker i owed 6% and they could cobroker, but either way they go their 6%.

To me if there is no wiggle room on that end, then there is no reason not to have a buyers broker as it costs you nothing, just make sure it is someone that you actually enjoy working with. They also will then be responsible for getting you through the process once a contract is signed.

"They also will then be responsible for getting you through the process once a contract is signed."- hi, 1st time buyer here as well, could you elaborate a bit?

coop or condo application/approval process

I just bought a place (condo) without a buyer's broker and saved myself 3%. The seller's broker was willing to give up part of the commission to only make the 3% as they would have if I had a broker.

A few comments on different posts

zombyw00f: Unless, you want to take on a part-time job with searching all the sales listings websites get yourself a buyer's broker. also, your broker will have your best interest in mind as they represent you not the seller.

Omega: It is unlikely that a broker is going to give you 3% of the commission unless you are doing the buyer's broker side of the work and are a licensed agent. Are you in NYC? If this did happen the broker must have been very desperate to get rid the condo or was it a new development as they have different standards?

Mikev: You don't need a buyer's broker, but as a buyer you don't pay the commission and the buyer's broker is there only to protect your (the buyer's) interests. Going direct can work for you if the seller's broker is willing to negotiate on price due to not having to split a commission with another real estate agency.
Good luck to all you hunters!

I am in NYC. I am a lawyer so could have gotten a real estate broker's license by just paying a fee - think it was $150. No classes, etc. required if you are a NY lawyer. It is not a new development, but there was another condo in the building that I was considering. I made the seller's broker aware that (1) it is really easy for me to get the NY broker's license to actually qualify for the 3% and (2) if they won't play, I am just as happy with the other apartment. I know it's unusual to get the full 3%. Just letting people know that it is possible and they should consider it as a possible strategy.

BTW - I had a broker when I was going to buy a place a while ago. The person was beyond useless, which is part of the reason why I decided to go on my own - that and at least the possibility of saving myself the 3% (or even 2% or 1%).

you dont save the money on commission when you go direct. big agencies dont allow you to cut in half- and i find people who go direct dont always know comps and overpay anyway.

A good buyer's broker is going to help you shop, help you get through the process, help you negotiate price, and help you get into a co-op. There are many people -- generally people with highly-paid busy jobs -- who want to outsource those services. An additional factor is that you may be a first-timer, but a good broker is not, so many customers like the idea of having an experienced guide.

However, since we're on streeteasy, you're going to hear two answers:

one is people who have dealt with lousy buyer's brokers (and there are a lot of them) who think they're beyond useless,

and two is people who have dealt with great buyer's brokers (10007 is in this camp) who can't imagine doing without.

Sorry, there seem to be few in-between reactions.

ali r.
DG Neary Realty
ali [at] dgneary [dot] com

Good - You don't have to pay a buyer's broker, and they might know of some places you missed.

Bad - A lot of [seller's] brokers won't work with a buyer's broker, because they don't want to split the 6%.

broadway you are very wrong.
all sellers brokers HAVE to work with buyers brokers.
in a coop, if you have a direct offer that is idential to a co broke offer, and the co broke has stronger assets and a better chance of going to the board, you must tell your seller of both. Sellers should not hope for a direct but shoudl realize their agent is working for them and being fair and open to cobrokering.

Most seller's brokers will be willing to take a 1-2% cut if you go direct. Even if they say they won't initially, once it comes down to price negotiations, and the difference betweek the the bid and ask is 1-2%, the broker will take a hit to get the deal done (they still make more than they would've otherwise).

You also have the option of going with a discount broker like Keith Burkhardt. His company can work on 1-3% commission, depending on what level of service you need.

"all sellers brokers HAVE to work with buyers brokers"

On a few occasions (maybe 3 or 4), I've heard a broker say something like, "they won't co-broke". Or, "they won't work with a buyer's broker". This may not be 'legal' (I have no idea), but I know it happens. Probably a lot more than people would like to think, considering the seller's broker is supposed to be working for the seller, so they should be entertaining all interested parties.

One of the key misconceptions people have with buyer's brokers is that they will help you get a better deal. Buyer's brokers are motivated to get a deal done - not to get best deal for you. The seller's broker is motivated the same way, to get a deal done - not to get the best price for the seller. Knowing that using a broker on either side of the transaction increases your chance of getting a deal done quickly but not necessarily at your "optimal" price should help answer the question regarding the need for a broker.

axa thanks for the shout out! But I would like to say I am not so much a discount broker as a full service broker that has a model that allows me to rebate (tax free) a % of the buy-side commission to my clients.

I feel strongly that I am an advocate for my clients and on many occasions(this year alone) I have strongly advised clients NOT to buy. On one occasion I felt so strongly about it I declined to participate in the deal. They decided not to buy and thanked me for being clear headed. I am keenly aware that there are those who will never believe that a broker can be motivated by anything other than closing a deal. And after 21 years in this business I would agree about 80%.

A good broker who is not just a "sales person" can be immensely helpful during all the aspects of the transaction. With the rebate model I can offer you added value that is known along with a strong understanding of the market. It's not just looking at comps, anyone can do that. I think a big part of what I can offer clients is my opinion about the future saleability of the property you may be considering, absolutely important. There is a big difference between what will sell in a raging bull market and what will sell under a normal market to weak/declining market.

But I would stress that more important than even the rebate that I offer, is working with a competent broker. For details about just what I offer you can refer to my blog, it's pretty whimsical, but it gives you some important details about rebates with links to the DOJ site and the IRS.

Keith
http://theburkhardtgroup.com/agents_details.php?agent_ID=7619

I think that having a broker works well for some buyers and not as well for other buyers. The important thing is to be able to communicate well with your broker and to let your broker know how much help you want in your search. Do you want someone to find apartments to view or find out details about a particular building? Do you want someone to help you evaluate what price an apartment is worth? Do you want someone to negotiate on your behalf? I think that a broker can perform some or all of the above functions and many others depending on what you want.

A possible downside to working with a buyer's broker is, as Juiceman noted, that they want a deal done quickly and might pressure you to purchase an apartment which is wrong for you. If that happens, you may want to terminate that relationship. A definite upside is having the broker set up appointments for you, as nyc10007 noted, which can otherwise be quite a bit of effort on your part and also to find out details about a particular building that might be difficult for you to discover on your own.

Buying a(n at least) million dollar apartment....A place that I will not only be living in, but also will contain the bulk of my net worth.

Yes, I would want an expert helping me along with every step that process, even if it did cost me, which is debatable and case by case.

lobster and juiceman, yes all brokers are self-interested in a deal, but if you can manage the broker, not a problem. If you can't manage your broker, don't use them.

The other thing worth noting is that brokers can't change the market price. If you're looking in the Village, I can probably find you something you haven't seen before that's not technically on the market (though I wouldn't do this for free) but if the listings you see are trading at $1,300 psf, even non-listed inventory isn't going to trade at $1,100 psf.

So you have to ask yourself if

a) you're not finding what you want because inventory is currently thin in your submarket (which is the case for a lot of shoppers on the UWS right now)
or if

b) you're not finding what you want because you're not willing to pay the market price in your submarket.

ali r.
DG Neary Realty

A few observations from personal experience (looking without a broker for two years). 1) Yet to meet a broker that will "share" the commission. 2) Have wasted a lot of time visiting open houses that make claims (i.e. views) that are unrealistic. A broker might have helped. 3) Wasted three months and over a $1000 trying to close a deal for a coop in a building that reviews pied a terres on a "case by case" basis. Was rejected. In reality, the board had never accepted a pied a terre. They were right - they review each application and have reject every single one. A broker would have steered us away - they have no interest in getting involved in a dead end / no commission deal. In summary, as much as I hate to admit, a broker used to purchase seems to be needed to get the deal done - at least in NYC.

"lobster and juiceman, yes all brokers are self-interested in a deal, but if you can manage the broker, not a problem. If you can't manage your broker, don't use them."

I agree gcondo. My advice was in the context of the OP, a first time buyer. First time buyers often get steamrolled by brokers, especially in a market such an Manhattan. The inexperienced buyer looks to a broker as a total advocate which, all too often, is exploited. I don't feel all brokers are bad or that they can't be useful to some buyers. What I am saying is that their motivation is different than the buyer's and it is very important to understand that.

sjtmd - was the coop a FSBO? If not, the sellers broker should have known about the pied a terre issue? Why did they not inform the seller and you of this issue so as not to waste anyone's time?

fsbo