First time Hampton buyer questions

1) Not sure I understand your question. To look for a place you need a broker to show you. This is at no cost to you (buyer). To buy, you absolutely need a lawyer. I believe it is even required by NY State law. But even if not required, you should never, ever make a large financial/contractual commitment without having an attorney read the documents!

2) Doesn't really make a difference when you buy. When you start looking seriously you will find your options pretty limited. A well priced house will sell pretty quickly out here no matter what time of year. Overpriced houses will sit. So when you find a place you love you should proceed.

Thanks for the response. To clarify on 1 - clearly I need a good lawyer. Question is more if you need a buyer's broker. While the fee is technically borne by the seller, in some markets (NYC for instance) there is more room in price negotiations when a seller can reduce the amount of total fee he pays. (e.g. again NYC example, if there is no buyers broker sometimes selling broker gets 4 or 5% vs. 6%).

What location are you looking for? What is your budget?

I am also in the market and am assuming that because I come without a broker, I can negotiate a better price. In all my past transactions -- with one exception-- I have found that a buyer's broker was not helpful. My lawyer was able to provide me with all pertinent information. And I always was able to negotiate a better price without a buyers broker.

There is no such thing as a "buyer's broker" in NY. All brokers work for and have a fiduciary duty to the seller. The only issue with multiple brokers is how the commission gets divided; the seller (usually) still pays the same amount. You, as a buyer, need a broker (who does not work for you!) solely to make appointments, get keys, and open the door. Most sellers will not let you in otherwise.

Uhmmm...that's not correct. Buyer's brokers exist and do have a fiduciary duty in NY.

http://www.dos.ny.gov/forms/licensing/1736-a.pdf

Such BS, sellers brokers will more than happily show you the house if you call them. If you know what you want and use Streeteasy, etc. to find listings you will end up winning on bidding wars, saving at least 2-3% on others and not having to deal with your "buyers" broker that will like every place you see and encourage you to act quickly. You are indeed correct, the only necessity in a real estate transaction is the attorney. The brokers can assist the seller, but really serve no purpose for an informed buyer. If you want something done right, do it yourself!

VSLSE65 - yes and every agent will promptly inform you they work for the seller and present you with that disclosure form. As a practical matter, there are no buyer's brokers in NY.

sonnynyc - you are right - seller's brokers will show you the house and then each one will relentlessly pursue you day and night to show you other houses. Torture.

Lkgsoh - Maybe I'm getting old and can't follow what you're saying, but there are buyer's brokers in NY (with a fiduciary duty). As far as whether anyone needs one, that's up to each buyer. Some can DIY, some can't for various reasons.

I am probably not being clear. Any reputable broker you (as buyer) work with will disclose to you that they work for the seller. You cannot find a "buyer's broker" in NY who does not have a fiduciary duty to seller. No broker at Corcoran, Sotheby's, Elliman, etc is a "Buyer's broker." They all work for the seller.

Let me rephrase - it is not illegal to be a buyer's broker. It is just not the historical/customary practice - the vast majority of all brokers represent the seller and will disclose that to the buyer when they first take them out. I am sure you can find a buyer's broker but it is not the norm and most brokers in NY don't operate that way.

I understand. That said, my family's been in RE for over 30 yrs and have worked with brokers who strictly represented us and not the seller. Occasionally, if it's their listing, they disclose that they also represent the seller (dual agency), in which case we don't sign the disclosure form.

Lkgsoh - I don't think you are correct. In all cases, the listing agent is the seller's agent. If you do not have your own broker, you are welcome to discuss the deal with the seller's agent and sign a dual agency agreement. However if you bring your own buyer's broker (or the buyer's broker brings you to the property), that person represents you and has a duty only to you. Incidentally, that buyer's broker gets their fee out of a "cobroke" split with the seller's agent. In other words, buyer's brokers DO exist.

This has nothing to do with the listing agent. Assume you as a buyer have signed no contract with your broker that is showing you houses (the "buyer's broker"). You find a house you like and you make an offer. When the buyer's broker brings your offer to the seller's broker, she has NO obligation to try and get you the lowest price. She has the obligation to get the HIGHEST price possible for the seller. So she is, in fact, working for the benefit of the seller.

I'll give an example. I am a buyer and hire a broker to show me houses. I find a house (for which my broker is not the listing agent)and I make an offer that is accepted by the seller. Before my contract is signed, another client of my broker sees the house and wants to make an offer that is higher than mine. My broker must present that offer to the seller because her obligation is get the highest price for the seller. You cannot say she has an obligation to the other buyer, because that would be at the expense of her obligation to me.

agree to disagree...

Lkgsoh - I actually did some more research on this and you are in fact right. Very interesting / unusual setup that the buyer's representative on the deal actually has primary fiduciary responsibility to seller! Guess you learn something new every day.

Lkgsoh,

"My broker must present that offer to the seller because her obligation is get the highest price for the seller."

Really? Please read up on the law.

1- "...her obligation is get the highest price for the seller"
Your broker's obligation is to the seller? This is so wrong I can't even comment.

2- "My broker must present that offer to the seller..."
Not if in your contract with "your" broker, you state they cannot represent another buyer in the same property. We always do this to avoid this issue.

We've been at this game for 30 years, commercial, mixed use, coops, condos, houses etc... If you been involved with RE for longer and have statutes or common law precedent to prove me wrong, please show me. Even this old dog can learn new tricks if proven wrong. But you wrote is simply wrong.

VSLE –

NY real estate disclosure that you sign with “your broker” (absent any separate buyer’ broker contract this is the case 99% of the time) your broker checks “Seller’s Agent” even though they work on your side of the deal. Per the form http://www.dos.ny.gov/forms/licensing/1736-a.pdf:

"A seller’s agent is an agent who is engaged by a seller to represent the seller’s interests. The seller’ agent does this by securing a buyer for the seller’s home at a price and on terms acceptable to the seller. A seller’s agent has, without limitation, the following fiduciary duties to the seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A seller’s agent does not represent the interests of the buyer. The obligations of a seller’s agent are also subject to any specific provisions set forth in an agreement between the agent and the seller. In dealings with the buyer, a seller’s agent should (a) exercise reasonable skill and care in performance of the agent’s duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.”

That is they owe a FIDUCIARY duty to the seller and only a duty of honesty and fairness to the buyer. Clearly not how they operate in practice but that is the letter of the law.

"... your broker checks “Seller’s Agent”..."

WHY would you let YOUR agent check "Seller's Agent"?

Good luck with your purchase. I'm done.

Why the hostility vslse65? I am not a real estate broker, but I am an attorney who has dealt with many, many brokers, and I can tell you that absent a written contract to the contrary (which is not customary in NY), a broker (including "your" broker) has a fiduciary obligation only to the seller (ie, to get the highest price). Walk in to any brokerage and ask for broker to show you houses and they will make you sign a document acknowledging this. I don't know why you are so angry about this! Just walk into any brokerage on main street and ask them.

I agree that it is confusing and ridiculous system. But I stand by what me and Lkgsoh are saying.

Apologies if I sounded hostile (wasn't my intent).

That said, I don't know why you are both stuck on this issue. The disclosure which I linked to (and FreebirdNYC linked to later) is an official NYS document. There is a buy side check box, once checked, that broker is your broker and owes the fiduciary duty to you, not the seller. No other contract is needed.

"Walk in to any brokerage and ask for broker to show you houses and they will make you sign a document acknowledging this."
Totally disagree. We never sign that as buyers. We make them check buy side or we don't use them as our reps. Simple.

Again I ask, "WHY would you let YOUR agent check "Seller's Agent"?
I just don't understand what the issue is here.

It's not a question of "letting" them. They all check the seller's agent box and show that document to me before they start showing. As real estate junkie who loves nothing more than to look at houses and apartments on weekends (and who had bought several over the years), I have worked with many, brokers from all the big agencies. I confess I don't remember if I actually sign (or initial) something or not but I recall having to acknowledge that I understood it. As a matter of fact I walked into an open house last weekend and the broker gave me her card, offered to show me other houses, and pointed out "as you know, I am required to tell you we all work for the sellers." May I ask what kind of properties you are buying where the agent enters into contract with you and agrees to act as your exclusive buyer's broker? Are you a developer? Are these commercial properties? We are talking private homes.

Agreed - I have been told that unless you sign a contract as an exclusive buyer's broker (buyer PAYS the fee - does not come out of the 6%) large-firm agents will not / cannot sign as "buyer's agent"

We've been involved with commercial, mixed use, and residential (not developers though) in multiple states since the 80s. I'm going to let this end here. Good luck FreebirdNYC.