What is the job of a buyer's broker?

Finding a mortgage broker and attorney is the easy part. Tons of people on these boards and friends of yours will be able to recommend brokers and attorneys. Finding an apartment that you love and want is tough. Yes the buyers broker will help you figure out the best price but you have to find the apartment first. You are already looking at streeteasy to see what's available. You see something you like, have him make the appointment, go see the apartment. The more you see the more you know exactly what you want and how the price compares to all the others you've seen.

Re your example, if the studio already has a contract and backup offers, the seller won't showing the apartment. You can't get in if they don't want to show the apt. Perhaps the broker thought you wanted to see what one looks like so he sent you another listing.

If you don't like the broker, fire him. Get another. All brokers have mortgage brokers and attorneys who want business and will be more than happy to help you.

1) Fire the broker if they aren't adding value.

2) If you want to do most of the leg work yourself and only use a broker to strategize, consider using Keith Burkhardt: he'll rebate half of the buyer broker fee back to you. He'll give you honest feedback on value.

3) Using a broker-referred mortgage broker and attorney is a bad idea: too much potential conflict of interest. E.g., the broker is getting kickbacks from the mortgage broker who won't get you the beat deal, the attorney is incentivized to not say anything that would nix the deal (no more referrals), etc.

Thanks. I don't expect to find an apartment I love. My budget is for alcove studios (jr. 1 bdrm). However, if a real 1 bedroom is listed at 500,000 and its value is really 400,000 that would make it a possibility.

I'm not getting any sense of value vs. asking price from the broker. I don't want to get to the negotiating stage and realize the broker isn't interested in getting me the best price.

Another example: 2 apartments in the same building. One has light and views, higher floor. Other is low floor, faces brick wall. Both need kitchen and bathroom. Listed at same price. Not a word from the broker about this. I know from reading the forums that the lower floor/brick wall apt should be cheaper and renov of kitchen and bath should reduce price.

My wife have tried to buy an apartment in NYC for the past 4 years. We have attempted to "go it alone" without a broker - using Street Easy and other sites, going to open houses, doing the research the best we can. We found that despite having an excellent attorney, we still needed someone to work on our behalf. Reasons?
1) Seller brokers do not allow for any "discount" when there is no broker to split the commission with. This has been repeated and universal. It is foolish, short sighted, and greedy. At the end of the day, the buyer reaps no financial advantage when going it alone. 2) A buyer broker helps in ways an attorney cannot - helping with the purchase price, obtaining basic real estate background of the property (different than the attorney's due diligence), and they are the communication conduit with the seller's broker. This is critical. Brokers know the lingo, the traps, the B.S. 3) There are excellent opportunities to have a broker, make your own decisions, and still get a financial advantage - use a commission refund broker. I have used Keith Burkhardt and he is an exemplary resource. He helps you fix a price for the property (will also tell you to stay away if necessary), he facilitates the bidding process, he helps with a general physical assessment of the property, works with all the application issues, and assists at closing. He then refunds at least 50% of the commission.

brokers can't read minds. it may be that the broker is showing you properties over your price range because he/she thinks that a compelling case can be made for a low offer on the unit. there are always trade offs, condition vs. floor vs. light vs. price, etc. often a buyer will think that something is critical, but then see a unit that doesn't fit the bill exactly and realize that the combination of trade offs works quite well. usually i don't discuss the price of any given unit with my broker until i'm ready to consider making an offer, I don't expect him to do all of the comp work and analysis on every unit i see, unless i'm really interested (and actually, I'm going to do my own comp work anyway). if you tell a broker that at the end of the day you're willing to pay X, they'll likely show you units above that price. if you don't want to see such units, make it clear that you want to look at properties that are currently listed for no more than X.

but if you are willing to do the leg work, and are fairly knowledgeable, a broker might be frustrating. here it sounds like there is a failure to communicate. but if the broker isn't adding value for you, and a brief conversation doesn't fix it, move on. i second the recommendation for Keith Burkhardt, it sounds like it would be an ideal match given your tendencies to do your own research. i personally do not like doing my own negotiating, so i always use a broker. if i didn't have such a long-standing relationship with my broker, I'd use Keith.

Not sure why everyone is recommending this one guy? Curious.

But definitely you just need to find someone you like and is useful. You are clearly not happy, but a good broker can help out especially if your first time. I found the biggest value added was not necessarily in finding places, but allt eh crap that comes after - and there is a lot of crap.

Suggest you indicate what area you are looking in and people can inundate you with suggestions of specific brokers.

Thanks. Prefer UWS or UES.

Keith has a very unusual business model that works extremely well for those who are willing, or who feel compelled to, do a lot of work themselves. And he's just a lovely person. A fair number of people have reported on SE their positive experiences working with him, and he's been in the NY business for quite some time.

My broker is Ed Hardesty, with Elliman. We've completed four transactions (the first one in 2000, the last one this year), and he's patiently assisted me two other times when I decided against buying.

Good brokers, like doctors, specialize in pattern recognition -- "have I seen this market or transaction before? If so, what is likely to happen?"

Clients tend to get dissatisfied with their buyer's brokers when they 1) don't like the reading of the pattern (e.g., the broker says, "you had planned to spend X%, but based on my experience with clients like you, you won't be happy unless you spend X+10%," and the client disagrees)

or 2) the reading of the pattern isn't specialized enough (buyer's broker doesn't accurately predict what other side is going to do, and then has to scramble to counter-move ... that's one example)

I sometimes end up cleaning up after deals in jeopardy (situation #2) but it sounds like your situation vis-a-vis your broker is that you're in situation #1. You can try switching, but it may not help.

As far as a real estate attorney, the great majority of them are not very thoughtful. If I were a first-time buyer, I would get recommendations from friends, and be willing to pay more for someone who came with great recommendations.

ali r.
DG Neary Realty

"Not sure why everyone is recommending this one guy? Curious."

Because he does a great job and puts cash into your pocket. I used him on a purchase that closed just over a month ago and would recommend him to any NYC buyer who knows what they're looking for in an apartment.

Throughout the entire process, it was clear that he was the only person who cared about the deal as much as me, which is just the kind of person you want on your side.

For a real estate attorney I can recommend (highly) Bonnie Covey, the first real estate attorney that I've worked with who I CAN recommend. Not cheap, but very thorough and a pleasure to work with.

I have no idea whether or not your broker is right for you. It sounds like he/she is sending you out to figure out what you want. What you want may not be in your budget, which may be why he/she is sending you to things out of your budget. In terms of price discussions, it is pointless to have any until you express solid interest in a unit.

The first thing my broker asked was how many units had I seen. She wanted to make sure I knew what I wanted. She then sent me a list of units in my price range to show me that none of them met my criteria and convinced me to moved my max up or compromise on my must-haves. She then sent me to only 3 units over 3 mos because they were the only ones that met my criteria. All were listed over my max budget. I bid on 2 of those units and ended up paying 5% over the max budget I gave her, which was 10% less than ask. I had 100% trust in my broker. It sounds like you don't feel comfortable. You should probably switch.

thartonb, when you see listings on StreetEasy, are you sending them to your buyer's broker to arrange a showing? I just want to make sure the facts are straight after reading this line:

"I'm finding apartments on streeteasy as soon as they're listed and the broker isn't getting me in to see them."

If you are indeed sending a note to your broker saying "please arrange a showing" when a listing hits the market and your broker isn't doing that, then something is horribly wrong and all this stuff about patterns and budgets is utter handwaving.

thartonb if you're doing all this research on your own already I would also recommend you use KeithB. We also had a similar experience to you in that we had a broker who was taking a long time to get back to us. At that point I called KeithB just to check out his services and we ended up buying an condo with him. You should check out his blog if you want to know more about him. To be honest all the stuff on his blog sounds like a marketing ploy at first, but once you get get into it with them you discover he's very legit and we were very happy with the service they provided. Good luck.

flarf: Yes, that has happened. Broker will say they haven't heard back about it then will say it's in contract. Well, I knew the listing would go fast... good price, good condition, good building. I wonder how the buyer got in to see it.

Also, sent one I wanted to see and broker said it's been on the market over a year. Then sends me more expensive listings that I can see on streeteasy have been on the market over a year (starts with one broker, delists, 2 weeks later with another broker, etc.)

REMom: I don't expect exact pricing suggestions until I find one I want. But it would be nice to have some guidance. Some indication he thinks the asking price is way out of line. The way things are going it seems like they want me to spend the most money so they can get the biggest commission.

A buyer's broker's interest is in getting you to close on a place ASAP so they can make a quick commission and move on. Getting you to spend more money (outside of raising the chances a specific apt gets to accepted offer) is not worth the marginal gain in commission relative to the risk you don't find a place you want.

More likely, this broker has other clients spending more money and does not consider you a priority. That is the only thing that explains why he would not contact listing agents of apartments you send to him.

Separately, don't just wait for a perfect apt to bid. It pays to bid on multiple at the same time - having alternatives gives you leverage and the nerve to hold your ground. Plus, you can make mistakes for free with some practice bids.

"The way things are going it seems like they want me to spend the most money so they can get the biggest commission."

Not quite. Their preference is to have you spend more to simply get to a transaction more quickly. If market rate for an apt is $400K but you're willing to buy it for $420K, that makes for a quick deal. It's 5% more money to them (no big deal), but less than half the work/time.

"Not sure why everyone is recommending this one guy? Curious."

The reason everyone is recommending this one guy is:

1) If you are doing all the legwork, he will rebate 50% or more of the buyer's commission back to you.

2) He is a very ethical guy who is truly interested in getting you into the right place at the right price. If he feels negative about a place/price you like, he will tell you as much even though it means more work / less commission for him.

I have never worked with him, I just know him through SE. But many, many people here have. I have yet to hear a single negative or even lukewarm comment about him. Based on this, and the comments he makes here, it seems like he is truly interested in acting as a fiduciary for you.

You hear from a lot of brokers on this site, you get a sense of who will act as a fiduciary vs. not. About half of them have little ethics and will be "whatever". The other half of them will rationalize away their ethics: "Well, as a broker per REBNY, we don't have a fiduciary responsibility since we are brokers, blah-blah, ...." Very few will have the attitude of "I don't know how to act any other way", which is the sense I get from Keith's comments here and feedback from literally dozens of posters here that have actually worked with him.

The most important role of a buyer's broker is to make the ridiculous commission sturcture a little more reasonable through buyer's broker rebate

We are sellers new to the market getting multiple bids, and the winner will likely be a direct buyer because the contract with our broker provides for 3% commission fee with a direct buyer and 6% in co-broke deal. The result is that we can offer the apartment for much lower to someone without a broker. I doubt we are alone in structuring our contract that way. And even if it's not the norm, you will find that in a direct sale, the seller's broker will be a lot more "flexible" with his commission, to make a deal happen (more room to discount when you are working with 6% commission). The funny part to us is that most buyers come to our open houses alone, having found the place on their own on streeteasy. They think their broker is not costing them anything and will only look out for their interest. Sadly, the only interest the brokers often look out for are their own -- do whatever to get the deal done. And the having broker may cost the buyers the apartment they want. Think carefully before you get a buyer's broker.

Ok: KB. Now I know. Never came across that here before. Nice deal.

I am a licensed real estate salesperson - and I completely agree with the comments listed here. If your broker is not doing their job, get a new agent. It's not worth the headache... and there are lots of agents who would be only too happy to do the legwork.

As for recommendations on lenders and lawyers.... they should have provided at least 2-3 options for each so that you could choose the person you are comfortable working with. And those relationships are exclusive of whether you continue working with the broker. If you would like to contact me - regardless of whether you engage my services as your agent - I would be more than happy to share the names of some financial and legal folks.

And, you are more than welcome to contact me with questions: Donna Hollins | dhollins@kwnyc.com

I don't see any value in buyers broker. At the end of the day, the buyer takes responsibility. This is just a scam for another broker to get in on a game that otherwise could not since he didn't sign the seller. The spiel given to the buyer is that they are getting a free service, but of what value?

I have gone through three purchases in NYC. In one case I didn't use a broker and the other two I did. While in each case I didn't pay a commission where I found value was filling out the 2 inch thick co op/condo packages with all the bank statements, reference letters, tax statements etc. in each case when I used a broker all I had to do was enter the info hand it over to the broker and called it a day. They were the ones who neatly typed all info made millions of copies that each board required collated everything and answered any questions I had about the package. For that I didn't have to pay a commission. The one time I didn't use a buyers broker, I was the one checking all my work, putting everything in order, buying the tabs running to staples to have the five or six copies made, etc. maybe you guys don't think it's a big deal, but it made my life so much easier once I found my apt. The brokers got their commission from the seller whether I used a buyers broker or not. So why not make my life easier.

Thanks for all the kind words.

Keith Burkhardt

We are sellers new to the market getting multiple bids, and the winner will likely be a direct buyer because the contract with our broker provides for 3% commission fee with a direct buyer and 6% in co-broke deal. The result is that we can offer the apartment for much lower to someone without a broker. I doubt we are alone in structuring our contract that way. And even if it's not the norm, you will find that in a direct sale, the seller's broker will be a lot more "flexible" with his commission, to make a deal happen (more room to discount when you are working with 6% commission). The funny part to us is that most buyers come to our open houses alone, having found the place on their own on streeteasy. They think their broker is not costing them anything and will only look out for their interest. Sadly, the only interest the brokers often look out for are their own -- do whatever to get the deal done. And the having broker may cost the buyers the apartment they want. Think carefully before you get a buyer's broker.

Wow, who is offering half price for no buyer's broker?

We negotiated that contract, and I won't out the broker. But all the major firms were offering 6% in co-broke and 5% for direct sales; one offered 6%/4%. I am convinced that most or at least many sellers have that contract and some have what we have. Any seller not insisting on it is an idiot. Forget the savings you get in a direct sale, and think about aligning your incentives (seller broker otherwise pushing for a direct sale so he/she can keep 6%).

From a buyer perspective, think what 1, 2 or 3% is of a price of an apartment you want to buy and whether a buyer's broker is worth that money. They certainly are useful with paperwork, etc.. I question whether they look out for your interest rather than pushing a deal through. And it seems like in the age of streeteasy, they don't serve the main function of finding apartments anymore.

OK, I don't think I have a choice but to fire him. Couple questions: I found an apt on SE and saw it. I later took him with me to see it, his idea. Useless, no input. If I decide to put an offer on it do they get commission? How much time has to pass?

Next: If I have a buyer's broker who is getting full commission, can I expect general guidance and answers to general questions regarding plus/minus of apartments seen together, plus/minus of apt listings sent to me?

If your buyer's broker signed the open house's sheet as your broker, which I bet he did the minute he walked in, the answer is yes. If you find a way to wiggle out, it won't be without a major dispute.

I have a buyers broker who sent me to a listing I had already saved weeks before in my street easy. An apartment I like. However, something is very wrong with my broker. I have figured out that they are a bad negotiator, never answer my questions and misinterpret everything that i ask them.

About this apartment I like, I was told things by my broker about the listing that came across as strange and when it prompted questions, my broker told me the answers were confidential on behalf of the seller.

Out of frustration, I called the listing broker and found that this information was readily available to me. I also found out that the listing broker's attitude was more disposed to negotiation than my own broker suggested. The listing broker offered to send me the application immediately after the call but I declined; figured that I had already sort of gone around my broker's back and wanted to make a bid and not mess things up. However, my broker did not get the form to me for several more days. A week later, I am still in no position for a bid, and the last communication with my broker was so insulting that I dont want to speak with them anymore, at least for a while.

My broker told me a lot of vague points to consider such as there might only be a few banks that loan against this building I like but when I asked twice which banks they were, I was ignored.

I dont really trust this person, I do not think they have my interests at heart and i do not want to work with them but I still want to make a bid on the apartment. Without a signed agreement, is there an obligation to the buyer broker?

I'm sorry to say that you are looking to buy a less expensive unit, which won't always get you the most attention. if you must insist upon rejecting our advice for Keith, which is silly, my advice may be counterintuitive, but i often find that the best service now is coming from the real stars who have teams. i've seen some of the top brokers in the city at open houses for very modest units. they understand the concept of volume, and they have the support to help you out.

interview keith, than get back to us. and make sure the next time you tell a broker exactly what you're looking for. but really, don't expect such an analysis unless you like the apartment, or have a specific question about something. something cursory, maybe, like not a great deal, but it takes a lot for a broker to weigh all of your pros and cons vs. the apartment and the comps for every one you see. some brokers think that if you don't pick one of the first three that you see that something is wrong.

With all due respect, as a buyer without a broker, have never seen the slightest flexibility on the part of a seller and / or their broker when it comes to a "discount". The first and only place where a refund was forthcoming, was with Keith B. Also received valuable assistance.

Not sure you'd always see that you're getting a discount. In our case, we are probably going to accept a lower bid from a direct buyer. He won't think we are giving him a discount (he came in around ask; others came in at or slightly above ask), but he will get the apartment because he did not have a broker, allowing us to clear more money. Buyers' brokers did make it easier for us to sell their clients, telling them half-truths about our apartment and building.

That's why I am skeptical of the value added. I think what happens with most buyers brokers, as with most salesmen, is that once they see you express interest in an apartment over others, they zero in on it, trashing the other ones you saw and putting the one you like on a pedestal. And there you are thinking the broker is looking out for your interest. It's especially dangerous now, with thin inventory -- there just may not be an apartment out there for you, but that's not acceptable for your broker who wouldn't get paid without a deal.

Thartonb,

It sounds like the broker you have chosen may also be overextending themselves and is not able to provide you with services (guidance and advice) that you need. In terms of value, your broker should be able to provide you with a comparative market analysis based on the apartment you like. I do this for all of my buyers. It's much like the same CMA provided to sellers when they put their apartment on the market. This way, based on the apartment you like, you can see the most recent sales in the building, the competition currently on the market to compare list price and what has recently gone to contract. Based on these figures, you should then be able to assess the market value of the property and be able to bid accordingly. These comps can also be used by your broker in the negotiating process. (I believe you always have to back up an offer -- well, especially if you're making one a bit below an asking price). Expectations with your broker should be laid out from the get-go. If you're going with co-ops, that is where your broker should also be adding a great deal of value. The submission, organization and presentation of your board packet will be extremely important in the process. All in all, keep the communication lines open with your broker of choice and let them know if you are having issues with the way they are handling the process. If you're not satisfied, move on.

As per a broker who merely gives you comparable listings for a cut of the commission - I don't think that's the job of a true buyer's broker........especially in a first-time buying situation with a co-op. A commission should be earned by guiding someone through an entire process, assessing their financials for co-op boards, aiding in determining the value of an apartment, negotiating during the bidding process, keeping the entire 'team' of attorney and mortgage broker or lender moving on pace together, organizing the buyer's board packets, managing road blocks, overseeing the final walk-thru, and aiding to coordinate closing. Good luck!

Brad Malow
BuyingNYC
www.BuyingNYC.com

what's a "board packet"?

Ya caught me. Board package. I interchange packet and package sometimes. Apologies.

And if you're unfamiliar with board packages - check out details here:

Guide to Buying a Co-op in NYC
http://www.buyingnyc.com/1/post/2012/07/guide-to-buying-a-co-op-in-nyc.html

>I interchange packet and package sometimes.

How about pocket and Phuket?

Parquet and Parkay?