Attorney representing buyer question

Possible conflict to be both broker and closing atty?

If all you want is the 3% and you're ny bar admitted. Get RE license (from Dept. of State website---fill-out a form and wait a week for your #) and join REBNY. Then you ARE a broker that can't be refused 3%. You might be able to pull-off without REBNY but would have to have a co-operative broker on other side.

Attorney tells me that all he has to do is disclose that he is both broker and attorney and there will not be a problem. Attorney happens to be a close relative, so, there is not much concern as to conflict of interest...my curiosity is if brokers will get pissed that I show up at an open house with no broker in tow and they have to share commission, (which will come back to me, they don't know this). Would a broker try to squash the deal when they find out ? just wondering here

How would you feel?
Ideally they'd like 6%, but often have to settle for 3% (when there are indeed 2 brokers). In this case 3% is still better than 0%.

I think your deal would go through to closing where you might hear "Turns out we can't give your broker/atty. a check for 3% b/c he doesn't have a RE License # or isn't a REBNY member, sorry its corp. policy."
After dealing with all upto that point would you be ready to walk unless you get the 3%? The last thing you want to do is close and then sue over the 3%.

Attorney cannot act as both legal counsel and real estate broker to the same party in a transaction. Severe conflict of interest (I believe it is incurable, even with waiver) and a violation of attorney ethics. Fact that attorney is "close relative" is irrelevant. Attorney could (and should) get disciplined for doing this.

Also, qwerty is right, and your attorney-relative is wrong about entitlement to commission. Goes to show what your free-riding attorney-relative, who apparently has no ethics and knows nothing about NYC real estate market, can get you mixed up with. Good luck.

Pigs get fed, hogs get slaughtered.

Use your atty-relative as your broker, list him on open house sign-in sheets (make sure he first has a RE License #) and ideally is also a REBNY member. Use someone else as your RE atty. You still get to do what you're planning to do regarding the 3% and the only cost is $1-2K for an unrelated RE atty. Don't screw it up by getting greedy and having your atty-relative attempt do it all.

Here's a radical suggestion: be honest. Offer the seller the choice of two bids: $X with a buyer's broker (your relative) or, say, .97 x $X with no buyer's broker.

In any case, qwerty's right: having the same person as attorney and broker on a transaction is asking for trouble, even if he/she has the necessary licenses for both roles.

I feel like I've answered this question before on these boards: according to the Department of State, your buyers' broker is the person you choose to represent you, so you can put in an offer through anyone you want.

That said, the reps of the big firms are trained to grab both halves of that commission, so they will argue with you if you didn't sign in your agent at first contact. You have the high ground, but you'll probably have to fight about it.

This is for older condos and co-ops. If you are looking at new construction, you absolutely MUST sign your agent in at first contact, because you're probably signing a waiver that if you don't, the marketing firm gets full commission.

Also, I am talking only about Manhattan only; my sense is that outer-borough brokers are less congenial.

Also also, you absolutely should not be using the same person as agent and attorney. If your family member is your buyer's broker, then they are getting paid through commision, but go ahead and spend the money to hire an attorney anyway.

ali r.
{downtown broker}

To continue the animal metaphor (and with all due respect to West81st--who's very sharp), being forthright/accomodating when dealing with brokers is like being a lamb before lions. These people do not F-around when it comes to $. If you were to offer the broker the choice described, they'd likely reply: "Well then, obviously your "agent" is a straw-agent b/c he's willing to be written out of the deal for the lower offer, therefore I'm entitled to the full 6%. Now, what's your offer for the unit?" Keep it simple (and don't get greedy).

Yeah, it was a moment of insanity. Honesty in a real estate transaction... what was I thinking?

FWIW, if the broker reacted that way, I'd offer the lower figure, with no agent on my side, and leave it up to him/her to convince the seller to take it. God knows the motivation will be strong - assuming I'm the highest unrepped bidder - since .06 x .97 > .03 x 1.00, by a substantial margin.

Front_porch: because you're probably signing a waiver that if you don't

What does this mean? Why do people misunderstand basic fundamentals of contract?
If you didn't agree to something, then there is no contract.

Same applies for all the people bitching about the condo they were delivered when they bought pre-construction completion ... if the contract you sign didn't say it, you can't say that you were owed it. Pretty simple. Brokers don't even have to lie if the buyers and sellers aren't even paying attention.

Just a general question on this signing in business. I haven't attended an open house in a long time, but when I did many years ago I never signed in. If I were asked to sign in, I would say no. Do brokers become confrontational now? What can they do?

Verain, as far as new condo developments, there are a bunch of papers that buyers sign when they are in the sales office. Those are not formal apartment contracts, but one is generally a waiver that if you are walking onto a construction site and you die, your estate promises not to sue the developer, and one is generally a piece of paper that states that if you don't write down your agent's name at the time, the marketing firm isn't going to pay your buyer's agent.

I point this out only because I talk to a lot of people who wander into a new condo sales office, and then want to hire me as a buyer's agent, and then seem surprised when I tell them it's too late.

West 81st's strategy is a reasonable one from the buyer perspective, but that listing broker should be an agent of the seller, and 100% should beat 97% from the point of the seller. The broker is violating their fiduciary duty to argue otherwise, and the seller has a perfect right to gut the broker for malpractice.

And Goldie, we agents have you sign in, obviously, because we want client capture, but it's also a marketing tool for us. If I've sold a 2-BR in SoHo and I've gotten 50 names from it, and then I list a 2-BR in Little Italy, the 50 people on my list are the first 50 people I'm going to call, because it's possible they might be interested.

That's why many people sign in with their agents' cell numbers. But no, you don't have to. It's a free country.

ali r.
{downtown broker}

Interesting that qwerty says "pigs get fed, hogs get slaughtered" and also recommends people not get greedy.

Yet he wants to charge his tenant for the mold that grew on the shower because of shoddy work, bad ventilation, and unclean water.
http://www.streeteasy.com/nyc/talk/discussion/4619-secty-depsit-charge-tenant-for-re-caulking-tub-bc-mold-

In NY even if buyer didn't sign broker's name at the open house, he by law still can get buyer's broker representation at any time after, as soon as his offer was submitted through the buyer's broker - buyer's broker would get paid.

In NY an attorney doesn't have to pass an exam to get broker's lisence, just file paperwork with The Department of State in order to get one. Only after getting RE Broker license he can act as a broker and get paid.

Ali,
you souldn't deny your representation to buyers at the new construction, because they went to the marketing firm's office without you. Even if marketing firm wouldn't pay (which I am sure they would think twise before doing so), commisions can be structured different ways. Everything is negotiable.

elena
(broker)

As a follow-up to this thread I have recently attended a few open houses on new construction buildings. Each time I signed the waiver of liability for the construction site, as Ali mentioned. And each time I refused to sign the marketing/representation document. The brokers are trained with a range of excuses on why it's not a problem for you to sign, but in the end I tell them I have no desire that they ever contact me and have had bad experience on this front regardless of what the broker is telling me now. They will bring in their supervisor, etc. and re-do the same conversation and in the end I just firmly ask if they want to show me the building or not. So far, in about 6 open houses, they have all shown me the building and have never received my information.

If I made an offer through a buyer's broker (although I can't imagine why I would), there would never be an issue, but I'm a big believer in West81's math, if the broker is getting 6% of a 97% offer, it's much better than getting 3% of a 100% offer. Although the economics of new building broker compensation may not exactly work that way, I want that broker incentivized to get the deal done and a buyer's broker isn't helping on that front.

what querty said.