How Not to be an Obnoxious Buyer

What exactly is your point?

Are you upset that like other professions that consult for free that sometimes your time is wasted?

Do you really feel that every person who takes up an hour of your time should put in an offer on an apartment so that you earn 3% and therefore have not wasted your time?

Hopefully the buyers broker goes away as information becomes more available and people get more ocmfortable without the crutch.

You posting this just says I do not want to deal with anyone who is not going to make me money.

And considering the last buyers broker i dealt with did not even want to look at apartments with me until i wanted to go back a second time, what use are you all? Almost as bad as the sellers broker who can not even answer basic questions about the building the apartment is in.

Why not go back and post the list of do and don'ts from the buyer's prospective about the broker, it definitely rings a lot truer then this list.

At least we know one broker *not* to use when the time comes. I'd rather use someone who doesn't treat (potential) clients as obnoxious or annoying.

More valuable content on Brick Underground.

I'm a little confused. Is Michael DeRosa contributing to the piece on "How not to be an obnoxious buyer" or "how not to be a real estate agent"??? Seems like the latter to me.

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"How not to be an obnoxious buyer

BrickUnderground's post yesterday on "how not to be a real estate agent" prompted Michael DeRosa of Halstead Property to lobby for a sequel on How Not to Be an Obnoxious Buyer. We asked him for some tips, and he obliged:

* Don't waste the broker's time seeing the listing four times if you're not really interested in buying it.
* Don't lie about your qualifications - if you're serious about buying, we'll eventually find out.
* Don't make ridiculously low offers. If you're fishing for the bottom, you missed it.
* Don't tell me the market is much worse than we both know it is.
* Don't use up my time only to disappear without an explanation. "

The source is a member of a well-respected Halstead team. I doubt he was anywhere near as obnoxious in his conversation (or e-mail exchange) with BU as the published text makes him look. Anyway, with regard to the substance of those bullet points:

"•Don't waste the broker's time seeing the listing four times if you're not really interested in buying it."
This self-evident point applies to so few buyers that it hardly seems worth mentioning. People don't waste their own time just for the malicious pleasure of wasting a broker's. Maybe a problem emerges during the buyer's off-site diligence, or the buyer notices something during that fourth viewing that eluded her previously, or she brings her spouse/partner/child/parent/friend/colleague/accountant/therapist/trainer/yoga instructor/whatever, who points out some alleged deficiency.

"•Don't lie about your qualifications - if you're serious about buying, we'll eventually find out."
This is reasonable adivce, and a time-saver for everyone involved - especially in the current environment. Fudging your finances during a casual conversation at an open house is one thing; when you get to the point of submitting an actual offer, it's a good idea to have your REBNY financial form in order, whether you are working with a broker or not.

"•Don't make ridiculously low offers. If you're fishing for the bottom, you missed it."
I think this one depends on the definition of "ridiculously". If an offer is somewhat consistent with recent comparable sales and on-market comps, maybe the problem is the asking price, not the offer.

"•Don't tell me the market is much worse than we both know it is."
Until an apartment sells, nobody "knows" where the market is. The assumption that we "both know" is just silly. Again, a buyer's view should be somewhat grounded in reality, but everyone has a right to stake out a negotiating position.

"•Don't use up my time only to disappear without an explanation."
Sure - simple courtesy suggests a quick, "Thanks for your time; we're not interested" e-mail. Feedback on the listing is helpful too, but I wouldn't call it an obligation.

West81st I think you pretty much hit it on the head.

I will say with regard to the market that no one does know. As it goes to show with the apartment i looked at and did not put in an offer over the summer. My broker tells me that they already had an offer close to ask. I said seems pretty impossible based on the comp within the same building. He goes on to tell me inventory is tight in the range i am looking and that is why they already had an offer. My wife and I decided that if that was the case then not worth it. Moral of the story is that either there was no offer, or whomever made it realized after they were lied to also about the value. 4 months later hit ACRIS at 7% off the ask, when i was told it was about 1-2%.

Either way they did me a favor as i wound up on my own going to a new development in Harlem, buying within my price range for a bigger apartment and had no broker working on my behalf which made me much more relaxed as i was no relying on someone else for information.

w81, all good points.

The reason I think it's more like a "how not to be a real estate agent" piece is because the agent missed the point that:
1. Someone seeing a place four times is obviously VERY interested.

2. re: qualifications, did he try educate the potential buyer and offer alternative, more affordable listings. Also, if he makes a good impression, they would come back him when they become qualified buyers...

3. re: low offers, did he try to educate the buyer about the "current market" with recent comps or offer advise on how to negotiate more effectively.

4. re: disappearing without an explanation, did he follow-up to get feedback on the listing?

Where is the SERVICE, SERVICE, SERVICE???

can we start an identical list......

1/ If you are a broker, stop lying about square feet, when we turn up we'll know - buyers have eyes.

2/ If you are going to make 3% on the sale pay for a decent photographer and stop using your instamatic for broker shots.

3/ No floorplan means you're wasting my time.

4/ Call a spade a spade - palatial should be used sparingly describing anything in New York.

I think the trouble arises because most buyers don't *intend* to lie to real estate agents, but they often lie to themselves, and to real estate agents by extension.

An experienced salesperson learns to sort out "good leads" from buyers who are eternal shoppers, but there's often no way to convey that to the latter set of buyers without getting excoriated.

And I disagree strongly with W81st that no one knows where the market is -- that's part of an agent's job. No matter how computerized the world gets, a real expert can still add value by knowing the past and present market, which includes experiencing the relevant spaces in their three-dimensional glory.

Certainly, in a slow, illiquid market, there are going to be small discrepancies, but someone making "ridiculously" low offers is coming in 20% under market clearance prices, not the 5% discrepancy that MikeV saw on his trade -- which also included a lag time.

ali r.
DG Neary Realty

We don't disagree, Ali. We're just using different definitions of the word "know". I'll leave it at that, rather than fall victim to one of the classic blunders - the most famous of which is "never get involved in a land war in Asia"; but only slightly less well-known is this: "Never go against a 'Cliffie from Adams House when epistemology is on the line"!

One of the reasons we didn't use a buyer's agent is because I feared we were one of those buyers. We had been looking off and on for a couple of years, wanted to buy but were by no means committed to the idea, had no timeline in mind, and had a difficult combination of requirements. If I were a real estate agent, I wouldn't want to work with me!

In the end, we found our "needle in the haystack," but if this apartment hadn't come along, our search would still be going on a year later. (I still get the Streeteasy updates and haven't seen anything that's interested me and I can afford since then.)

Ali the problem is 5% depending on what level you are talking about is a decent amount of money, in my case it was around $70,000. No matter what you want to say, to me that is not small. There was not enough lag time that a GOOD broker would not have pointed to the sponsor sale in the building on the same floor that had closed a few months prior to the resale coming ont he market. It was obvious that it was overpriced as the sellers broker clearly stated that the sellers were trying to recoup their whole purchase price from 3 years prior. So why is it that my broker did not point all this out, that i had to point it out?

So my point is still valid while there are brokers out there, you included, who make it a point to understand what they are advising to their clients, that just does not seem to be how the majority of brokers act.

They then make you feel as if you are costing them time and money, when they are actually supposed to be working for you and on your behalf, and ultimately looking out for your financial interests, not theirs.

brokers are like opinion

meh.. opinions..

Continuing with deanc's broker list:

5/ Please learn what a true "duplex" is: one full floor directly above another full floor. An apartment with a sleeping loft is not a duplex. An apartment with a sunken living room is not a duplex.

6/ While we're on the subject of lofts, please learn what a true "loft" is. 9-foot ceilings do not a loft make.

7/ Learn the neighborhoods in which you are selling. Schemerhorn Street does not exist in Brooklyn Heights. Fourth Avenue is not Park Slope. If an address is south of Houston Street, it's in SoHo. East 78th Street between Lexington and Third is not "steps away" from Central Park (using that logic, ANYTHING is "steps away" from EVERYTHING).

8/ Three exterior shots of the building is wasting my time. A shot of the lobby is wasting my time. I want to see the APARTMENT, which is where I would be living ... I don't give a rat's ass about the lobby ... unless, of course, you've already posted a dozen or so pictures of the apartment itself.

9/ While we're on the subject of pictures, if you don't show me a picture of the kitchen or the bathroom I know you're hiding something. Next!

10/ Enough with the elitism. I know it's New York City. I know prices are completely outrageous. But do not presume to imply that anything under $500K is a "starter" apartment, or that it's somehow "low budget." Half a million ... hell, even a QUARTER of a million dollars is still a fuckload of money to the vast majority of people, even in New York City, which has a median household income of under $60K (which by the way is what most of you REs make, so your elitism just makes you look all the more silly).

>10/ Enough with the elitism. I know it's New York City. I know prices are completely outrageous. But do not presume to imply that anything under $500K is a "starter" apartment, or that it's somehow "low budget." Half a million ... hell, even a QUARTER of a million dollars is still a fuckload of money to the vast majority of people, even in New York City, which has a median household income of under $60K (which by the way is what most of you REs make, so your elitism just makes you look all the more silly).

That's all nice and good. What is your solution? All sellers should lower their prices for you?

I'm not complaining about the prices. I'm saying that brokers should tone down the elitism and acknowledge that a $400K home is fucking EXPENSIVE.

and I think the esteemed and respected but obviously very angry coop board member should was his mouth out with soap

Sorry, but RE agents deserve a "fucking".

>I'm not complaining about the prices. I'm saying that brokers should tone down the elitism and acknowledge that a $400K home is fucking EXPENSIVE.

Seriously, you need therapy? You want someone to empathize with you. Oh NYCMatt, you are such a great guy, hey let's go look at this $400K apartment, I know you worked hard for the money, but you'll love it. It's a shoe box in Inwood, but that's Manhattan, right, you'll get the respect you deserve!

NYCMatt:
Maybe ease up on the stone-throwing.
Schermerhorn Street (with two r's) runs from Clinton Street (in Brooklyn Heights) to Downtown Brooklyn. 27 Schermerhorn is in Brooklyn Heights. Streeteasy calls 96 Schermerhorn Downtown Brooklyn. The NYTimes calls it Boerum Hill. In many cases, we agents don't choose the designation - the listing service does.
Tina
(Brooklyn agent)

tina, I know you've been back for awhile, I'm glad. always appreciated your posts.

I'm in sales and there are always clients who ask a million questions, come back to look at the product over and over again and then don't purchase...That's just part of the game..that client might end up back in six months buying the apartment or product you're selling..No client is obnoxious.

Personally, I don't see any reason to use a buyer's agent in Manhattan, because of all the data available in StreetEasy. When we were looking for our place, we did all our research. We learned everything about the neighborhoods, and always were fully armed with comps, including registered sales. We had everything we needed to be good negotiators, and even used the fact that we had no agent seeking a fee to get the price down even further.

One seller's agent we talked to gave us the hard sell, trying to convince us to go with him as a buyer's agent if we did not buy in his building. I explained everything, and said we'd be willing to consider it, if he could explain the value that he would provide over our $10 per month insider account. He simply said, "well, you should just have one. It helps." Clearly not a guy I want helping me negotiate.

I'm sure there are many competent buyer agents. But they certainly aren't incentivised to get their clients the best deal. Sure, if we're talking about a difference of even $25,000, my agent isn't going to care about losing a mere $750. However! Their time is also money, so to speak, and they are therefore incentivised to push me to take an offer when there's any risk at all of a deal falling apart, even if I could conceivably save more money.

Too bad no place else I've lived had the same level of transparency of real estate data as NYC does!

Buyers' agents suck.

Their goal, obviously, is to maximize their commission. So there is no incentive on their part to find you the cheapest price on anything.

I went through three agents during my home search, and ultimately found my apartment on my own. Every single agent was steering me towards apartments that were three times more than what I wanted to spend, simply because "in your income range, THIS is what you should be looking at."

I don't need an agent telling me what I *should* be looking at, thank you very much.

Another major sticking point was the kitchen. Every agent I worked with insisted that in my price range, there simply weren't any apartments on the market that didn't have the dreadful "open kitchen".

As soon as I started looking on my own, I proved them wrong.

Seller's agent. Buyer's agent. They're both working for the same side ... the SELLER.

the only thing I would use a broker for is negotiating, but in every instance I have attempted to use a broker, I have found myself not trusting them, and for good reason. brokers, whether real estate or mortgage or anything, are dumber than you and you don't need them

ouch.

the last thing id use a broker for is to negotiate--

brokers in general arent the sharpest tools in the drawer (im being nice), by definition their agendas conflict with those of the buyer, there is plenty of good advice and info on negotiating which can be accessed in about 10 minutes on this very site, among others; and it aint rocket science to begin with.

had Matt ever gotten to the stage where he was negotiating a deal as filtered by a broker, you'd see some not-nice commentary.

I would say to their defense that buyer's brokers can be useful, almost invariably only if you know how to make use of them.

The category in general is as close to a disgraceful, self-entitled, spoiled, uncultivated bunch as they come.

Please insist, before contract that they get as little as possible.

And do not ever trust a thing they say, EVER.

I'll just cut and paste this from another thread:

Wbottom it's clear you won't be using a buyers-broker, but I disagree that they don't offer a buyer anything positive. My model rebates 1.5-2% of the buy-side commission back to the buyer at closing. Our ability to be creative has also offset the cost of "flip-taxes" or a mansion tax. That along with being a valuable member of your team, including a CPA,attorney and lender. Our model guarantees you added value along with honest, transparent, knowledgeable (Ive been a broker in NYC for 20 years) representation, a true collaboration that rewards those buyers I call "Real estate quants" that participate in all aspects the transaction.

Keith Burkhardt
http://www.theburkhardtgroup.com/services-and-fees-c14358.html

>by definition their agendas conflict with those of the buyer,

This is a very narrow minded point of view.
I'm moving, I want to buy a house or an apartment. I don't know the inventory, I call a broker to help me find an apartment. If I didn't want to move, I wouldn't call a broker. If I do work with a broker and ultimately the broker can't help me find something, then the broker doesn't get paid, so if my objecive was to find a new place to live - which is why I hired a broker to represent me in the first place - the broker is exactly aligned with me finding a place.

Now, your narrow minded view comes as the broker has little incentive after finding the place to encourage you to walk away because of a failure to meet minds on price. However, the majority of people who are attempting to buy are not seeking to not buy. Furthermore, the marginal 3% that the buyers' broker and firm together stand to make on the incremental dollar that a buyer may bid, is hardly a strong argument.

>by definition their agendas conflict with those of the buyer,

The argument would be similar to saying that Schwab's agenda conflicts with mine as a brokerage customer. Schwab doesn't care what I pay or if I make money, they only want me to buy or sell a stock.

Well sure, and that's quite well known. But I want to buy a stock. If I can't work with Schwab (or another broker), how am I going to buy the stock? Schwab is exactly aligned with my objective to buy (or sell) a stock.

Keith:

1) Rebating 2% of the buy-side commission means that you refund .06% of the purchase price. You meant to say that you give back 2/3 of the commission. Even so, for my condo, there is no buy-side commission paid at all, so you are still costing me money.
2) Many teams of all kinds have people who don't pull their weight. Being part of a team is not concrete value. I'm never going to hire someone just to have a bigger team, for instance.
3) Your experience and creativity is of marginal value to anyone who does their research and/or can post to this board.

While some people could sure use the help negotiating, the incentives are not there for the buyer's broker to get the best deal. I know plenty of brokers, and I know they typically focus on getting a deal done, even if they have to stretch ethics a bit. I can't tell you how many times I've had a seller's broker tell me how much a seller was really willing to take, and at what point the offer would be insulting. I also have to believe that many/most buyer's brokers are similarly motivated just to get a deal done, and will tell buyers they should take a deal on the table before they should.

Therefore, having you advise on negotiation isn't even going to add value. Frankly, offering solutions to offset taxes is generally just moving money around, and part of the negotiation process, or else something where one should be using an accountant instead.

But if you manage to convince me that there's value that is worth the cost of your service when everything nets out, then you'll be the first person I call the next time I buy.

I agree completely.

If you're not serious, sincere or honest you're a tourist.
It's OK to be a tourist but, don't interfere with the business at hand. When I was out in the OH world it was b/c I was in the market to buy. The obnoxious tourists (not buyers) are the issue. Only the desperate deal with the obnoxious. Smart brokers (yes there are some) can spot the tourists in a minute.
A broker once told me, true or not, that true buyers show up like schleps. The money is at hand, as is the check book. The tourists dress up, touch the food and drink, as stupid questions and attempt to monopolize the brokers time. They often focus on details that any true buyer should be smart enough to ignore. (ex. oh, I hate what they have done to the place)

@midtown: Correct I meant 1/2 to 2/3 of the buy-side commission.
You are a perfect example of one of my typical clients, a broker is certainly not going to convince you to overpay. But after we get done working together to negotiate the lowest and acceptable price you are willing to pay you can expect a check back at closing from me, let's say 2% of the closing price, so $30,000 on a $1.5M apartment.

If you can convince the sell-side to reduce their commission by 2% and credit it to you after your best and final negotiation, perhaps, but I say unlikely. My service model adds certainty to the process after we negotiate the best price. I have just presented an offer for a buyer who tried that to no avail, he did not want to use a buyer broker, but the sell-side would not give up that 2%, so he called me.

I have no intention of trying to convince anyone to work with me. That's what I offer, if it works for you great, if not no biggie. I'm on your side and many assumptions about brokers don't fit me, I want you to get the lowest price possible, I won't compromise my values over one commission. I'm in it for the long haul, I want your referral, I want you to be satisfied with the work I do.

Either way to each his/her own...

keith, your model is quite different and may well prevail. time will tell.

Keith: I definitely got my 3% at the end, but I can see how bringing you in at the last minute if I can't get it would save me some money! So that's something where I definitely could see using you next time, so I'll definitely keep that in mind. As far as it goes, I do like your model, and if we were anywhere where I didn't have access to the same amount of data without a RE license, you're definitely the kind of guy I'd use.

Well it works for me, why wouldn't it right? I have no delusions of taking over the market, but I think it offers buyers who want some assistance, (but also would like some compensation) for the work they do. Many of the people I am working with or have worked with express a lot of animosity about having to deal with, dealt with the listing broker directly. After going it alone they have welcomed my input and ability to represent their side of the deal during the negotiations, not to mention the rebate :)

Go Steelers.

Good work MidTown! OK I have to get off this thing, no appointments today, first free Sunday in a while!

Having a buyer's broker can be very effective for negotiating. Before you start, you have to recognize their role. THinking of them as your 'friend' is the surest way to use them most ineffectively.
Their role is diplomat to your country in dealing with diplomat to seller's country. And that the seller is paying their commission ultimately, you treat your diplomat like a mini spy for the other side. You give your 'perceived' strategy, your 'perceived' highest offer and feigning you are together in one closed loop.
Always have competition, have 2 apartments you are interested in. Or have an upcoming rental lease renewal you 'may' commit to for another year.
Don't focus on the 1%, 2% your gonna kinda sorta get back from the broker. You focus on comps on what the apartment is worth with backup facts and data. That will get you more than your 2% off, without doing it by counting other people's money. (And this is not meant to knock KEithB)

ANd in the end, pay no mind to any lists on how to behave in manhattan real estate transactions. This is a wishlist for dinosaur brokers who are still stuck in last decade's mentality of Manhattan real estate. Many whom I have encountered. They have forgotten the art of negotiation and/or lost patience with the skill, finding themselves maybe better suited as a concierge or casino host.
Certainly not EVERY broker is this bad but there appears to be a majority rule in this regard.

maybe im not understanding, but why not just deal directly with the sellers broker? then one has complete control of info provided the other side. So whatever approach to negotiating one determines best, it is executued exactly that way. And buyer has unfiltered info from the seller's broker.

i dont see any benefit from having a (frquently hare-brained) broker filtering the process, and slowing it, often, with poor response time to emails, call etc.

when i negotiate anything, i craft pretty much each and every word to effect advantage--dont want some broiker tweaking my language, cuz they know better

Someone posted this on Brickunderground and I think he/she hits the nail on the head:

"Let's see... brokers have been screwing people for years, telling them the market will only go up, saying "its an investment", lying about sf, lying about other offers, basically just lying about everything."

Seriously- who gave brokers the right to give investment advice? Where is the SEC rules on this?

And in terms of "asking too many questions" that the brokers said I would add this to the above lists:
- Dont ask me if I want to see other listings or what my price range is. I have access to streeteasy so I know whats on the market and if I wanted or needed your help or wanted you to show me another listing(s) I'll ask for it.

- In regards to, "Don't make ridiculously low offers. If you're fishing for the bottom, you missed it." I can offer whatever I want - this is a free country. And we've all seen apts going for 50% or more off of original asking price- when Brooke Astor's apt went on the market for $46M if someone had offered $18M for it it would have been considered a low ball offer that they would never take- now its said to be in contract for around that price "the high teens" is what I read.

As for lowball pricing - I have had agents scoff at a bid only to see approximately that number in a new, reduced asking price. There is no "price" for real estate - just what the market dictates and what the seller can tolerate at any given time.

I think there is a vast gulf between an experienced, knowledgeable buyer who needs very little guidance and the type of buyer who genuinely needs assistance in purchasing a home. Just as there are vast differences among the types and qualities of agents out there. Usually it's the buyers who actually need the help of a broker who behave like the so-called "obnoxious buyer" listed in the original post. Our job, as agents, is to answer questions, help assess and evaluate financial readiness, prepare and present offers (even lowball ones), discuss the state of the market, and show and show and show again.

If we do our jobs right, our obnoxious clients become educated, savvy buyers, who may not need us anymore. We're like Nanny McPhee.

Tina
(Brooklyn agent)

And yet you can't so simple math. 12*10, 20*15, 20* 6, now add those together. Fktards.

Why Brooklyn? Same job description more money in manhattan? It's like choosing jack in the box when you could work for mcd.

>when i negotiate anything, i craft pretty much each and every word to effect advantage--dont want some broiker tweaking my language, cuz they know better

You learned that at the Harvard negotiating course?