Buying without a broker?

You work with an agent you like and trust, and only one you like and trust. I've said before in these threads that there are distinct negotiating advantages to using surrogates. Completely alright to go it alone, but it isn't necessarily easier or better or worse--just different.

I think on existing properties, that a broker is VERY value added, especially someone like Noah Rosenblatt(Urban Digs).

However, for a new developement, I'm not sure I see the value. In fact, I think you certainly help your situation without the broker, as you can negotiate in Seller's Concession place of a saved brokers fee for the developer.

You can find your own comps at nyc.gov as well as various other public records resources.

gluck75, curious why you make the distinction from new development. I haven't really looked at ANY new dev, so pretty much clueless here. What exactly makes the broker so valuable for existing contruction? And SBL, agreed the comps are there, and I feel pretty good about pricing, but shouldn't a broker be able to do more than just that for you?

One strategy would be to hire the hottest broker you can possibly find. At least then if he/she is useless, the beer after the open house will be far more interesting.

BJW...Thought is this...and tell me if I am missing something here...

For an existing unit, if there is no "Buyers Broker", then the selling broker keeps all of the Comp. I believe for new Construction, the developers broker gets a set rate, whether or not the buyer comes with a broker. Therefore, in New Dev, there is extra juice to negotiate with.

Can somebody tell me if I am wrong here.It's quite possible. I am wrong a lot.

Any one have a clue as to how a buyer's broker might be helpful outside of providing information about the building and compiling comps for you (both of which I can probably do on my own)?

It is also more likely that a buyer dealing with a seller's broker WITHOUT a buyer's broker will be in a better position to negotiate (no splitting the cut on the seller's broker side, thus more incentive to work with you or work with the client to work with you).

In some cases, I think brokers know of new listings before they hit streeteasy, but in general, I find that they go up pretty quickly. And in the current market, rarely will something be snatched up so fast (unless priced low of course). So yeah, so far, not convinced I need to go the broker route. Would love to hear if there are any thoughts to the contrary though...

I have only worked with 2 buyers brokers in the 3 months or so and have found them quite useless... if and when I am marginally interested in a unit, they become super pushy about me putting in a bid. I have NEVER been notified of a unit that I had not already looked at via Streeteasy or via my own due diligence. The ones that I have worked with do NOT seem to be in the "know" or have an inside into the listings that I do not have access to. Please, if anyone does know how a buyer's broker is helpful for someone who has lived and worked in Manhattan for 15 years, knows neighborhoods, buildings, etc, please provide insight. Otherwise, I think they may be a slight disadvantage during the negotiation process.

SBL, my experiences have been similar. Many brokers, those that I've met at open houses or through listings I've called, have sent me listings. I've NEVER been shown a listing I haven't already found, and instead I wind explaining what's wrong about the listing to the broker.

Hi-- does anyone have any idea why a buyer's broker would be pushing condos even when they are not within my specs? Is it b/c they can get the commission easier b/c there is less hassle buying into a condo than a coop, or am I being too suspicious??

sbl, it may be that your broker is more familiar with condos.

I agree that buyers brokers are somewhat overrated, but they do call around and make appointments for you and schedule the day(s) for you. I think it takes a bit more coordination then you think, but possibly still not "worth the commission". However, I'm sure they spin their wheels a LOT with "fake" buyers that waste their time... so in essence, as a serious buyer maybe you're paying for the wasted time of the broker in closing a deal.

As for new construction, I wouldn't have really known about the project my broker referred me to (and then I eventually bought)... it wasn't even on my radar and quite frankly I got in before it was more advertised (2-3 week waiting list for appointments). To be fair, the downside was that I got a "cheaper" price, but I tied up my money for longer.

SBL, how far outside your specs are we talking here? I've had the same thing happen, but with co-ops, strangely enough, and I repeatedly told the broker that these listings were clearly outside what I could reasonably afford. There may be some truth to incentive to push towards a condo, but I think there's generally some misconception out there that being approved to purchase a condo is a breeze compared to passing a co-op board's test. Some boards are clearly tougher than others, but condos aren't a cinch either.

as i commented on that other tired thread, I did not use a broker and found that it was to my advantage when i was able to negotiate -- knowing that the sponsor didn't have to pay a commission. this got me 3% off asking and transfer taxes paid by sponsor.

I made it very clear what my minimum square footage was, as well as my price point. I was sent listings that were about HALF the minimum square footage BUT AT my price point, as the buyer's broker only sent CONDOS and I made it clear I was open to BOTH CONDOS AND COOPS but my priority was price and square footage in certain parts of the city. In addition, the buyers broker, being quite lazy, sent me LINKS ONLY via email, with no information next to the links. It was actually quite unprofessional-- imagine an email with about 15 links, and no information next to the links as to the price, the location, or the specs. If only b/c I don't want to deal with brokers I am going to bide my time...

Buying without a broker is much like stock trades without a broker. If you know the market and you know what your doing, then by all means, go it alone. If you're a great negotiator and have extensive knowledge of the market, then go it alone. If this does not apply to you, then for god sakes, you'd be insane to step into the NYC real estate game w/o a broker. VERY BAD THINGS CAN AND DO HAPPEN out there. Get a skilled broker who has done a lot of deals that you click with. It does not cost you anything. Knowledge is king in the market.

ff

Buying without a broker is not at all like buying stocks. Stocks are far more complex because they rely on many more factors. Anyone can work without a broker as long as they have the desire and the time. With so much information now available , brokers often can provide very little value-added. I have worked with a few buyers brokers and they were unable to provide me with anything beyond what I could find on Streeteasy. It seems to me that it is the brokers that would like us to believe that there is risk in going without a broker because they fear that if more people knew how easy it was they would have no more business.

I bought an existing condo without a broker, and I'm glad. The unit was exactly what I was looking for--a large alcove studio with a nice view. There was competition when I bid the asking price. By not having a broker representing me, the selling broker got higher compensation, and she preferred selling to me. The next time a comparable unit sold in my building, the price was over twice what I paid. If I had had a broker representing me at the time, I'm not certain I would have gotten the place.

I agree with PMG and EAO.
The thing that amazes me whrn I go in without a borker is how many "sellers brokers" will jump the loyalty ship just to move the unit. I'd say, on average, after two viewings or once they realise I am serious and have the capital they will give me all I need to know to lowball a bid. Then they go and coerce the seller. It's unreal.

I am so ANGRY with seller's brokers now!!

I have a friend who is telling me to STAY AWAY from using a Seller's broker, and although I didn't listen at first, I now heartily AGREE. My friend said the negotiations are MUCH easier without a seller's broker b/c the buyers broker is much more willing to negotiate with those without a seller's broker.

I put in a bid on an apartment about a month ago. My broker came back to me claiming that the unit was "about to go into contract" and that "if I offered $1k above the price" then "they would prefer to sell to me" about 2 weeks ago. My broker gave me no advice other than "based on my experience, this is a very good price". Suffice it to say, I walked away. I suspect my broker, although technically my "advocate", was in collusion with the seller's broker. I just found the same listing on a Craigslist (!!) and they are offering the exact same unit for the $1k below the price that they were willing to "give" it to me for. I contacted the buyers broker who said that "yes, why it is still available, are you interested?". I said no way. I can wait and find something else.

I recently used a different buyer's broker. This person started going ON AND ON during a showing about how UNDERPRICED the unit was, loudly protesting that the unit should easily be priced MUCH HIGHER. How's that for negotiating tactics? I will not be using these oh-so-experienced "great negotiators... [with] extensive knowledge of the market" because I think that it behooves me to "go it alone" and risk the "VERY BAD THINGS" that "CAN AND DO HAPPEN" (I cannot possibly see what "bad things" dgray is referring to, as I would think an good attorney would be much more critical during the deal process!!

I presume dgray is a broker.

Woops, please change "seller" and "buyer" in my first paragraph!! I meant to say:

I have a friend who is telling me to STAY AWAY from using a buyer's broker, and although I didn't listen at first, I now heartily AGREE. My friend said the negotiations are MUCH easier without a buyer's broker b/c the seller's broker is much more willing to negotiate with those without giving a part of his/her commission to the buyer's broker.

I also meant to say "I am so ANGRY at buyer's brokers now!!"

Oh, one other thing-- the price that they were willing to "give it to me at" that was "$1k above another offer" was actually about $20k below their listing price (I had submitted a bid for 40k below their listing price). The games brokers play. Funny.

75% of brokers Ive encountered have been a waste of time. You dont need to be educated to be a broker or have good ethics. Many are liars and list sold apartments and phony listings as a bait and switch tactic. Then they try to get you to overpay for an apartment that is half the size you want. There might be some good ones out there, but I have not met any yet. If you are not a tourist, and know exactly what you want and are willing to spend, buyers brokers are useless.

SBL, try FSBO. No brokers, little hassle. Mine was a breeze, still friends with the sellers today. If you can't find an FSBO you like, try to find sellers that are in the process of putting their place on the market and work with them to buy it before they engage a broker. As long as you are comfortable that their price is in line, you can usually agree to a price that splits the broker fee between you. Even if you agree to a 5% seller, 1% buyer commission split, you will still come out ahead, in $ and in aggravation (and the seller will be very happy). You will almost always do better when two rational people are negotiating directly with one another. Your story is a perfect example of how brokers screw up deals and unfortunately, this is the rule rather than the exception.

When I was selling my apartment FSBO, I was inundated with brokers telling me that 1) I could not get the exposure they could get and 2) many buyers do not want to deal directly with an owner. After trying for about 2 months, I was approached by a broker who told me that he could get me 3% above my current asking ( would pay his commission ) and sell it in 30 days. He went so far as to offer me a 30 day contract, which I agreed to since I had little to lose. Well during that time period all he received was one lowball offer on the apartment. He encouraged me to "work" with the offer despite the fact that it would put me significantly below my objectives since now I had to lose an additional 6% below the low offer. Well, when the contract ended, I continued on my own and sold the apartment at the number I wanted in 1 week!! The couple I sold it to is so lovely and the whole interaction has been very positive. I have a great lawyer who is on top of the details and will NEVER try to sell through a broker again.

I am now in the process of trying to find a new apartment. I decided to enlist a buyer's broker that happens to be my cousin's wife. She told me at the onset that what I was looking for was very difficult and proceeded to send me "data dumps" that were exactly what I have seen on Streeteasy only without floorplans or pictures! When I told her that I didn't think this was going to work out, she asked me if I wouldn't mind putting her name in on the deal when I find the apartment we want to buy. She said the 3% is going to be spent anyway, might as well give it to someone you like. Is it me, or are brokers supposed to work for this money???

Needless to say, I have had very negative experiences on both ends. All of this has made me more confident and knowledgeable of the process. If I had to do it all over again, I NEVER would have bothered with any brokers on either transaction. In the end, I have saved substantial $, sold my apartment to a wonderful couple and look forward to increased negotiation power now that my new apartment will not have to be co-brokered!

EAO, your cousin's wife, I mean, what can you say? I hope you didn't oblige. It's nice to hear you've done fine without a broker. Based on most of the feedback here, I'm going to continue searching on my own in Manhattan, though I've got a broker looking out for me in Brooklyn (really tough to cover if you don't live there already, I think). She's very good and an honest person at least, more than I can say for the majority I've encountered. But I'm really convinced the system at least partially encourages that behavior. It does make quality people stand out even more though.

I wish there were brokers whom I could pay by the hour (or by retainer) to do due diligence on a property. I could find a place and negotiate for myself, but I would pay someone to have access to databases, etc. This due diligence broker could act just like my attorney. Why should I pay 30k to a buyer's broker (and I am paying it indirectly on the purchase price even if it is routed through the seller) who does little and just 5k or so to an attorney. They are doing similar work. And just like an attorney, the broker would get paid whether or not the deal actually goes through.

Anyone know of broker's willing to work this way?

smartmoney123: I don't understand your plan to save money. If the seller has listed with an agent with an agreement to pay 6% commission on a sale (maybe the agent agreed to 5% if the property is sold without co-brokering) then how does it save you money to pay someone by the hour to do your due diligence instead of simply using a buyer's broker? It isn't like the seller saves 3% if you don't have a broker. The seller still has to pay a 5 or 6% commission to his/her agent. It is the seller's agent who gets a bigger pay off if you don't have an agent--you don't get the money.

I think the point smartmoney is making is that a "buyer's broker" is an unknown quantity in that her expierence with them has been less then fulfilling from a business point of view. She doesn't trust that they are working for her, so funneling any of the commission to them is pointless...especially if they are giving her faulty information in the hopes of just getting a deal done. The idea of paying someone for actual work done on her behalf...that she can trust.... is worth every penny.

Smart Money--not clear on what kind of due diligence you are trying to acquire as an a la carte service? There is a good deal of info you can access on your own that was unavailable until relatively recently. Frankly I see the benefit of a (very good) buyers broker specifically in the negotiations. I realize this is contrary to most people's opinions on here, and also in the interest of full disclosure i am a broker, but that is without a doubt the prime area where my value lies. Of course having a nincompoop as a buyers broker is worse than having none at all. I do feel that the people who see no possibility for value during negotiations are often the very people who would benefit from a (very good) broker working on their behalf. Someone like kylewest (for example) is probably one of the best suited on this board to do it himself and benefit from having chosen that route. (from the limited amount i know of you all of course). And even he states that he can see the value brought by having a good intermediary in the negotiating dance.

I understand that there could be value in a good broker, but why are they so hard to find???

nyg, appreciate the view. What's your take on exactly how a buyer's broker can influence negotiations? What can he/she do differently than a potential buyer going it alone?

I think alot of people don't take proper care in selecting the right one. You are essentially hiring this person to fill a very important job in your "company" and it is pivotal to treat the hiring process as just that. When you are looking to find a broker always make clear that you see this as a long term relationship and plan to be totally loyal. Let them take you out to lunch and basically interview them. You can find out not just their knowledge of the market and their experience, but the nimbleness of their minds and the way in which they present themselves and with what care they choose their words. Listen to them. Are they smart? Are they making a great impression on you? All these semi intangibles are far more important than an impressive file of papers they bring along after having pushed the print button at their office. Lastly, feel free to ask for references. Granted, noone will give you the contact info for people who hate them but getting some good referrals saying things about them you deem important is good. Also plan to go into this relationship as something of a partnership. You have the final word, you are the boss, but you want a relationship whereyou feel comfortable listening to their advice and input. Oh and of course there are alot of idiot brokers out there, some ethical and many not. Comes with the territory--trust me I need to deal with them all the time. But there are alot of good ones out there, I promise.

bjw2103--negotiating is an art, and good negotiators know how to present you,the situation, what words to choose, when to call, when not to. Great negotiators listen and hear nuances in the oppositions conversations that can help you. They choose their words with the utmost care--something that can be very hard for an emotionally tied in buyer to do. Also in this business it is helpful to be able to create a relationship with the "opposition". Sometimes things the other broker says or things they say in passing about the owner will inform how I present things. This is all sounding very vague and hard to quantify I realize. And again there are buyers who are skilled at this art who can do perfectly well on their own even if they sacrifice the intermediary.And this skill matters in some deals more than others.

nyg, that is very helpful. It's certainly something to consider. I had bid full asking on a Nolita 2BR that recently went to contract, but my inexperience in negotiating probably hurt me a bit. It went for over, but still. Thanks for being upfront about your being a broker as well - that alone lends some credibility to your posts.

bjw--hey don't get me wrong. Even a very skilled negotiator can lose deals, particularly when someone else is willing to pay more. Since you are going it alone, though, and since you are aware that you are not a skilled negotiator, I would advise that you buy a book about the art of negotiating--certain there are plenty of them out there. Aside from improving your skills, it can also make you feel more empowered in situation where one often feels out of control. Good luck.