Value of buyer broker?

If you're daunted, then just get one. 85%+ of deals have 2 brokerage firms involved.

The best way to get one is to go to an open house and find an agent whose personality you like, but a home you don't like--just can't buy that one. Then have her or him help you from there.

Recommendations from friends might be OK, but I would never use a agent who is a friend of mine. You could lose a friendship that way.

If you don't think you need a broker to find a place you like but could probably use help with negotiating, board package and other issues, look up the Burkhardt Group. Keith Burkhardt, who posts here, has a unique service that provides services you need and doesn't make you pay for what you can do yourself. There is significant commission rebate in return for not "doing it all". I hope I spelled the name right but hopefully you can find them if this is something that appeals to you. If I ever buy again (I think I'm in my "for the rest of my life" home) I would definitely use Keith's services.

I was a first time buyer last year and used Keith Burkhardt. I found the apartment and his firm did the rest: comp search for initial offer; negotiated the price; did co-op board package (huge job) and walk through with me. Plus, he splits his commission with the buyer and the split depends on offer price-it's a generous split. He and his colleague Christian were great. Just search the talk boards (function is on right) and you will see just how many people were thrilled with his service. All the best to you with your search.

http://www.theburkhardtgroup.com/about.php

"Recommendations from friends might be OK, but I would never use a agent who is a friend of mine. You could lose a friendship that way."

Only if you or your friend's a POS in my opinion. All I ever use when I do anything is friends or family because I trust them.

We bought on the UWS two years ago and at first were very negative about the idea of a buyer's broker. In fact, we started with one (who shall remain nameless), and the guy turned out to not add any value and was just rushing us into making a decision. Then we met this buyer's broker during a random open house who was previewing the apartment for one of his clients, and talking to him he was so inspiring and different from any broker stereotype we had. When working with him, he actually advised us several times NOT to put out an offer when we wanted to jump. And he was right - with a 20-month old now and a second on the way we would have regretted it. And then he painted us a vision of this total estate condition apartment we saw – which, in his creative mind, had so many unique features (light, layout, etc.) if you just looked past the bad condition and envisioned a gut renovation. He was right again, we got the place (which he negotiated 10% below list), and after closing (he prepared our Board package) he got us in touch with the right architect and contractor to completely renovate the place to its prewar glory. We LOVE our apartment and could have not done it without him.

Anyway, long way of saying it all depends on who you work with – and we have seen both sides. Needless to say we loved our buyer's broker, and he is still a close friend. He has his own boutique firm, if you want to contact him his name is Paul Hyman and you can get his details on http://www.phpnyc.com

Hope this helps! Good luck!!!

My second time with a property purchase and I thought I am experienced enough not to use a broker. However I did not have a good experience with the seller broker. It's just the odds; sometimes you end up with a wonderful experience buying a property without a broker and sometimes you just needed one to shield yourself from nasty seller broker. So my conclusion is I shall always use a buyer's broker from now onwards.

Keith B: The way to go. Very knowledgeable and excellent service with rebate.

If you're buying a coop, using a buyer's broker can be very helpful. The ads for apartments don't usually show the financial requirements (percentage down, maximum mortgage, any escrow for maintenance, debt to earnings ratio). Also, I've found that seller's brokers often don't take you seriously without you're own broker. Since the seller pays the broker's fees, not you, I'd use my own broker.

300_mercer
about 9 hours ago
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Keith B: The way to go. Very knowledgeable and excellent service with rebate.

I support what Keith is doing too, it's compelling, and so it's nice of 300_mercer to write as if he used Keith when he didn't actually do so.

I used a good friend as my buyers broker, and another good friend for my attorney. I'd purchased real estate before, but not in NYC, and not a co-op. Having people who knew the market, had easy access to substantial comparable data & other brokers, and knew the ins and outs of various boards and had staff to create accurate board packages significantly reduced the stress and hassle of the search and closing. And it's not like the broker costs you anything.

I echo the praise for Keith Burkhardt: a superb and knowledgeable buyer's broker. Worked with him several years ago - and will do so again the next time we purchase in NYC.

i ve never really understood the argument stating that "it s ok to have a buyer broker because the seller pays the broker fees". Correct me if I am wrong. Take an apartment priced 1mm$. Buyer "A" has a broker. Buyer "B" has not. They both pay full offer.
With buyer "A", seller gets 940k and both brokers split 30k of commissions each.
But buyer "B" has a 30k theoretical edge over buyer "A". Seller can get 950k and his broker 50k, or 960 and 40k, all those are scenarios where both the seller and his broker make more money. I do not want to start another over-discussed controversy and I certainly understand the "I dont have time to search" argument, or "I dont know how to deal with the real estate world" argument, or the "I dont speak english argument" etc. etc. But it is a lie to say that having a buyer broker has no financial impact. Right ? I have heard brokers denying that argument so passionately that it made me doubt.

@basic,

It depends on the agreement that the owner of the apartment has with the selling broker -- sometimes they're written so that if there's no buyer's broker, the selling broker keeps the full X% commission. And sometimes they're written with a stepped commission, so that any "savings" from the buyer not having brought in a broker goes straight to the owner.

When I work as a selling broker, I've written agreements both ways, but the point is that whether or not there's extra pie for the buyer to grab is already pre-determined, and will vary from property to property.

To the other point, I don't understand why buyer's brokers would market their services by saying "I'm free." Would you go to a pre-paid accountant? When I work the buyer's side, I always tell my clients that I'm expensive, but I'm worth it.

ali r.
DG Neary Realty

I am responding to the question by "basicinformation" on whether the buyer has more negotiations power if he does not use a buyer's broker and works with the seller's broker directly. Leaving aside such important matters as agency relations, agent's duties to act in best interest of his client, and conflict of interest between a seller and a buyer, when both of them are represented by the same person, lets just look at the numbers. When a buyer does not have a broker, unlike 95% of all real estate transactions in Manhattan in 2013, the amount that goes to the seller is exactly the same, as when there are 2 broker on the deal. Why? Because the listing broker (i.e., the seller's agent) has a listing agreement with the seller that sets up their commission and all 100% of such commission goes to such listing broker, instead of being divided between the seller and the buyer's agents. Listing brokers are not going to reduce their commission just because the buyer did not want to benefit from having his/her own representation on a dea. Sometimes, with smaller firms you may be able to negotiate some sort of rebate, although it is not very common. Big firms do not allow their agents to reduce commission at all. So the buyer will be the one at disadvantage, when not represented by a broker, because he will have to rely on information, provided by the seller's agent (who has duties to the seller to get him the best price possible), will not have professional representation during negotiations, and may just end up paying a higher price just because lack of necessary information and skills.

i ve never really understood the argument stating that "it s ok to have a buyer broker because the seller pays the broker fees". Correct me if I am wrong. Take an apartment priced 1mm$. Buyer "A" has a broker. Buyer "B" has not. They both pay full offer.
With buyer "A", seller gets 940k and both brokers split 30k of commissions each.
But buyer "B" has a 30k theoretical edge over buyer "A". Seller can get 950k and his broker 50k, or 960 and 40k, all those are scenarios where both the seller and his broker make more money. I do not want to start another over-discussed controversy and I certainly understand the "I dont have time to search" argument, or "I dont know how to deal with the real estate world" argument, or the "I dont speak english argument" etc. etc. But it is a lie to say that having a buyer broker has no financial impact. Right ? I have heard brokers denying that argument so passionately that it made me doubt.

OP: Don't be a dumbass. Use a broker. You say the process is daunting. It is and it is far more daunting than you likely realize. Cannot stress how stupid it would be for you not to. The service Keith offers sounds great, but it is for people who can do a lot of the legwork themselves.

Trick for you will be in funding a good agent. So go to a bunch of open houses in area you want. When you found one who knows area you click with go with them. But just wait a few weeks to decide.

Good luck.

OP: Don't be a dumbass. Use a broker. You say the process is daunting. It is and it is far more daunting than you likely realize. Cannot stress how stupid it would be for you not to. The service Keith offers sounds great, but it is for people who can do a lot of the legwork themselves.

Trick for you will be in funding a good agent. So go to a bunch of open houses in area you want. When you found one who knows area you click with go with them. But just wait a few weeks to decide.

Good luck.

very appropriate typo.

C0C0, how was your weekend?

ok if 6% goes to the seller s broker regardless, then you better off having a buyer s broker. It is difficult to disagree with that part of the argumentation and i didnt know 6% are to be charged to the transaction regardless.

That leaves us with the following argument: if you are in the seller's broker shoes, all things being equal, you would be financially motivated to push the seller to accept the offer coming from an unrepresented buyer right ? My point is that I heard all kind of arguments and some are valid. But I tend to conclude that if you are an educated buyer it is difficult to find any reason supporting the buyer s broker argument.

If you do not have a broker, you likely just *think* you are an educated buyer.

basic, leaving aside the fact that it's unethical to push for one buyer over the other on the basis of representation (a small aside for some brokers, a larger one for others of us) it probably comes down to the board and the building.

If buyers are unrepresented because they hate brokers and the process of buying apartments, that's a legit attitude (hey, it's your money).

But if I'm in my role as listing broker, and I'm given the choice between a buyer working with a broker who's going to shepherd them through the process and a buyer who is somewhat oppositional/defiant to the process, then I might mention to the seller that the former candidate is probably going to be easier to get through a tough co-op board... which is a statement opposite to my financial interest as you see it.

ali r.

I know many just hate on us brokers :) But what Ali is saying has been my experience and the experience of many of our clients. There are very few circumstances where one has an edge going it alone. Like Ali said, if you don't want to work with a broker representing your position and want to fly solo, well then you should. But remember you are still working with a broker, the one representing the best interests of the seller.

We sort of specialize in representing buyers who wanted to originally go it alone, then quickly discovered it was more frustrating/annoying that dealing with their own rep. Just find someone whom you can form a good working relationship wit, despite the opinion of some people here, there are many highly competent and ethical people to choose from here in NYC. Put the time in and find one.

Keith Burkhardt
TBG

I cannot speak about most other brokers who represent buyers (there are indeed many good ones), but personally I represent both sides fairly equally, have several seller's listings now and working with buyers as well. I agree that some buyers want to go at it alone because they think they will negotiate better, get a better more direct deal, etc. Thats fine and they sometimes may be right about that. Some buyers are incredibly dialed in to the market and much more savvy than many brokers. What I bring to the table as a buyers broker is knowledge about neighborhoods, block by block, I have more knowledge than many buyers in terms of specific co-op buildings, and I often introduce buyers to areas they would not have considered should they not find what they want in their preferred areas. The big advantage I provide and other good buyers brokers provide, is guidance throughout the whole board package process which can be daunting, tedious beyond belief, and if done incorrectly can sabotage the purchase. Some buyers want and need this help through the process often because they are first time buyers, or are just to busy to deal with the minutia. This is just a glimpse of what buyers brokers can do. That said I completely understand that there are many brokers out there that add zero value to a deal and just looking to get a paycheck. Any good broker knows that you are building client relationships and letting the buyer go at their own pace and comfort level is the most important strategy.

For the record I certainly do not hate brokers. I am just trying to think about that whole situation. I certainly understand the need of a broker in a transaction in general. Let me read the above now :)

buyers' brokers are always negative--they strap 3% onto the deal.

when negotiation gets heated the fact that the property can be priced down 3%, yet still net the selling broker the same as usual dollars, has value.

and if you are in a bidding war, and you dont have a buyers' broker, obviously the selling broker would prefer you get the deal.

and then there's that transacting real estate is anything but rocket science--given that, why have some dope with clear conflict of interest filter negotiation.

and now with internet, etc--where is the value--use a lawyer NOT recommended by any parties to your deal, whom you trust, to clarify anything you arent up to speed with.

While I understand everything said above (benefiting from your broker's experience in negotiation, pricing, etc.), I think Yikes makes sense.

My feeling when I talk to all my friends that are shopping apartment (with or without brokers it depends), is that I think a lot of deals actually fail to happen because there are too many c/pies involved, and in this current hot market, it is super counterproductive. But that s it, I will stop with that controversy. I do not think there is anything left to be said. At the end as Ali said it is whatever you are comfortable doing with your money.

sellers market is really squeezing buy-sides....large, brand name brokerages in brooklyn (you know who they are) are frequently refusing to co-broke to non-REBNY buy-sides, including when the buy-side broker is the purchaser him/rself. I have heard of this happening even when the purchaser was told that he was the best offer but before he had sprung his licensure to the sell-side....also, some brokers are requiring not only REBNY membership but that you be a broker as your primary employment. no part-time brokers allowed....needless to say he lost out. as an owner, i would be so fired up if i knew my sell-side broker was actively turning away ANY offers - especially in such a heated market. shady, shady practices...

Don't recommend that you use a buyer's broker. In an active market, sellers' brokers prefer dealing with people not represented so they can pocket the entire commission. It happened to us and we lost out on a house that we loved but ended up goign to someone that was represented by the sellers' broker. Just make sure to make it clear to the seller's broker that you are not workign with anyone.

OP says they find the process daunting and is a first time buyer. I think 90% of people who frequent this board could easily go without a buyers broker, but most of us have experience buying/selling places. First timer needs to have hand held and is unlikely to be involved in any type of scenario where that 3% commission is the deal breaker. I think without a buyer someone like OP will just never end up getting a place.

What about all those condo want-to-be-buyers who keep insisting that the condo board has no rights and can't refuse them, only to be unable to make the purchase? Would they benefit from a broker who could smack them upside the head and talk some sense into them?

hfscomm1

I'd highly recommend KeithB and I just closed a transaction with him.

He was professional, polite, patient, attentive and most important of all put zero pressure on us to make a transaction happen. He's smart and realizes whether it takes 3 months or 12 months to make a purchase it's all about you and a smooth transaction.

Almost every deal has 2 brokers so that isn't putting your offer at any disadvantage.

given the op can write, s/he can easily find a deal and get up to speed with comps, etc. s/he's on this site posting, after all--a very good start.

too many negatives in a buyers' broker--with no positives to offset.

and i just cant get past deferring my buying process to someone with with clear conflict of interest (who is often not too bright). Price negotiation is a problem, but it's about everything. Brokers want deals, period, whatever the easiest path there is. Smart buyers want the right deal for them at best price attainable.

Does yikes get along with anyone, at the right price?

I bough I place 1 year ago. I initial started the process by myself...incredible painful process. 4 months later I started working with
Uliana Savilo from Elliman based on the reccomandation of a friend...best decision ever. She previewed most of the properties for me, scheduled all the views around my schedule, fully understood what I was looking for, took care of the paper work, negotiated the price, helped find a great contractor. Now I always recoded her to all my friends! Just get a GOOD broker to help you

Keith is wrong, based on my experience as a buyer, working with the big firms for the past few months. Small firms may be different but you don't have a choice regarding the listing agent, and in my market, small firms have almost no presence.

When you show up without a broker, many agents may force you, and I do mean force you, to sign a dual agency disclosure.

Basically they will give you so much grief and flack that if you don't sign, they basically won't talk with you.

I reported one agent (BIG firm) so that I got the assurance from the manager that my offer would be presented even though I refused to sign the disclosure form at all. I'm sure my offer was not favorably presented.

That agent had the audacity to chide me for MY failure to disclose to him that I would not accept him as a dual agent at the first open house. As if disclosure were the buyer's responsibility, which he thinks it is. Of course I don't even see a disclosure form until I submitted an offer, there were none at the open house.

Another agent, same BIG firm, got angry and offended when I told her I wanted her to disclose that she represents the seller, and I represent myself. She was offended that I didn't trust her, she's been doing this 20 years, I'm accusing her of not being a fair and honest person, blah blah blah.

The made negotiations pretty much impossible, although we tried. She has a new insult for me every time I try to talk to her about buying her listing.

The apartment is still on the market, by the way, because it's priced a little high. I would kinda like to buy it, but my feelings got hurt enough now that it has actually tainted how I feel about that real estate.

So, if you don't have an agent, I believe you will not end up working with an agent representing the seller in most cases. You will be working with a dual agent.

Oh, and the agents tell me that by law they have to be dual agents unless you have your own agent. Which is wrong. But I hear that constantly.

A dual agent is someone who is working only for themselves. They don't owe allegiance to anybody but themselves. It's great for agents.

I do feel sorry for the poor seller. But if you list with a BIG firm, you really don't have a choice. Because your buyer will be working with the same BIG firm.

The other thing is, some firms will let the agent accept less commission in a direct buyer situation. But I'm getting the impression that this is not happening so much anymore.

But if you get a buyers agent from a BIG firm odds are it's dual agent anyway because whatever you buy will be from the same BIG firm.

So I may just have to get a buyer's broker so that the brokerage firms can maintain their hold on the market, keep the agents earning commissions, and maybe I can find a place to live.

Wrong about what?

Here is a good article on Dual Agency from the Office of General Counsel NY Department of State;

http://www.dos.ny.gov/cnsl/dualagcy.html

Keith Burkhardt
TBG

Thanks so much for that excellent link, Keith I can print it and start handing it out.

What you're wrong about is saying that the listing broker will represent the seller and the buyer is unrepresented, which by the way is a common term in other states in real estate.

No.

The listing broker will represent both the buyer and the seller, and I am saying as a practical matter, good luck changing that at all if you are a buyer.

My point was addressed to those buyers who don't work with a buy-side agent, there is still a broker involved; the listing agent.

"But remember you are still working with a broker, the one representing the best interests of the seller."

Essentially---most of the time I am being forced to secure an agent by the listing agents, or work with a listing dual agent who has no fiduciary responsibility to me, or to the seller for that matter, a fact that might come as a surprise to the seller.

I am not being allowed to function as a principal or a direct buyer. Good news for agents, not so good for consumers.

My theory is that real estate agents are circling the wagons. With inventory so low, there aren't many transactions, so they are looking out for one another to stay involved in transactions as much as possible.

Also, the BIG firms might have some incentives on in-house sales. I don't know if they do or not.

Flutistic, I was taught the same thing that Keith is saying -- agency follows intention, not money.

So if you show up at an open house without an agent, and you tell the listing agent that you don't want her as your agent, how can she be a dual agent? You haven't intended or accepted that relationship. Rather, you are indeed an "unrepresented buyer."

If the listing agent tells you that you can't function that way -- as you mention the big firm agent who sounds like she was browbeating you above -- then you have a complaint that you can take to the Department of State.

ali r.
DG Neary Realty

From experience both as a buyer and a seller:
As a seller, I noticed my broker will only bring in offers from buyers who do not have a buyer's agent. I get it, money talks. Why split the commission when you can have it all? Not all brokers are unethical but if I had to choose between taking home 6% or 3%, it's easy to see why some will prefer buyers who are not represented.

As a buyer, it was easier for us to negotitate the selling price.

So unless you are a newbie who needs some guidance - I would not hire a buyer's broker.

F_P and Keith, you are ethical, competent, informed people who play by the law, and when I get really discouraged I am glad to know you exist :)

What Matt says is striking and interesting because it seems the vast majority of buyers have agents, at least at our price point and location.

Which means perhaps offers are not getting through to sellers.

You need to pick your brokers better Matt :) Any broker that wants a "career" in NYC that is not presenting all offers to the seller will have a short one. Either they will lose their license or will never keep a listing, the fact is most buyers have an agent, like it or not. If you as a seller are missing say 90% of the buyer pool, I don't think you would be very happy. NYC buyers and sellers are some of the most educated/sophisticated in the world, they are not going to be played by a real estate broker!

Keith Burkhardt
TBG

Flutistic...I am happy to report, like us or not the majority of agents/brokers we deal with in NYC are ethical business people as well as nice folks. Of course like in all walks of life there are nasty exceptions, but if you take the time to look you will find some very competent people that can assist you here. What is very difficult currently is the state of the market, low inventory, that is making everyone a bit batty and frustrated!

Keith Burkhardt
TBG

Flutistic: I had a broker when I bought my first apartment, and he was helpful in guiding the process. But this was before streeteasy and other online property search web-sites. It is also easy to access ACRIS and look at comparable price points from the same building/area.

So if you are entirely new to the buying process, and do not have time to do your own research - you should hire a competent buyer's broker. But be aware that some of your offers may not be presented by some sellers' agents (of which you do not have any control of).

this is one of my points about the negative val of brokers, beyond the commission they are paid--they get to filter all negotiation, and have serious conflicts of interest.

And in cases where buyer has actual access to the seller, the seller can direct the listing broker to reduce commission in order to get a deal done.

In this day and age, where most formal negotiation is done via email, i can see no reason why buyer and seller shouldnt insist on being cc'ed all communication btwn brokers.

I wonder if yikes handled his bitter divorce by himself, instead of with an attorney.

Hummm, pondered all of this. I agree with yikes also. It would be pretty hard to get your agent to agree to cc you on emails, though, and if you did, they would just pick up the phone instead.

Decided for my (frustrated) self to continue to work as a direct buyer/principal, to go ahead and hold my nose while being forced to sign dual agency disclosures (I do add that it's nonexclusive and limited to that property address).

This will help avoid negotiations getting off on the wrong foot.

Because the risk of my (all cash by the way, with proof of funds) offer not being presented to the seller, or presented without enthusiasm, might exist if I use a buyer's broker.

No good seller's agent would ever do that. But a dual agent doesn't owe the seller loyalty, for sure, as we know from Keith's link.

The low inventory surely must be crushing the incomes of a lot of agents. It simply must.

FYI: We copy our clients on all emails. (The many clients we have here on SE will attest to that).

Keith Burkhardt
TBG

I like the idea of using buyer's broker that you like for purpose of not having to deal with seller's broker if for no other purpose. In our current rental, the owner/seller's broker was so annoying that I contemplated engaging buyer's broker mid-deal just to not have to deal with the seller's broker anymore. It was very confusing because the owner's attorney had started dealing with us directly and the specifics of the original offer we made through seller's broker had been rejected and overtaken by direct discussions with seller/owner's attorney. The broker began stalking me for a blind 15% commission when it was far from clear that any lease would be signed or what the terms of any lease would be. Broker said that I had signed agreement saying that I would pay said commission because she would not have showed me the apartment had I not signed such an agreement. I told her to go back and review the document I had signed because I specifically edited it to say that she was acting solely as seller's agent and I was not entering into any specific agreement with her as condition of viewing apartment. Were I in a purchasing situation rather than renting, I would similarly edit the document if I did not have broker, but even with the edited document, I would expect to be dealing solely with the seller's broker rather than the seller directly. If seller has a selling broker, isn't whole point to have broker deal with all prospective buyers, whether through buyer's agent or directly?

>because I specifically edited it to say that she was acting solely as seller's agent and I was not entering into any specific agreement with her as condition of viewing apartment. Were I in a purchasing situation rather than renting, I would similarly edit the document if I did not have broker, but even with the edited document,

It's unfortunate that buyers or renters, before they even have decided on a place, have to enter into a legal agreement with the seller's broker, and have to have the forethought or legal prowess to negotiate such an agreement.

MattThompson...I doubt very seriously that you are an owner if you thinks its cool that your broker only brings you unrepresented buyers....you pay 6% no matter what....to say that you are cool with only seeing Buyer A's (without broker) offer of 10K over ask and NOT seeing Buyer B's (with broker) offer of 15K over ask...is an absolutely ridiculous statement. I would fire and immediately report my sell-side if I caught wind of him/er doing this....

Keith is exactly right....any sell-sides who are not presenting all offers will have a very short career.

I am hearing more and more of buy-side brokers, where its clear that the sell-side is shafting their owner (by not presenting the offer) because the buy-side is diluting the brokerage for the sell-side, are writing not only the owners (via ACRIS info) but are also writing the DOS and even the NYAG. It's highly unethical (to the tune of losing your license) when its documented that you are not presenting a bona fide offer(s) because of the presence of a non-REBNY buy-side.

CondoPresident - to be clear I am NOT cool with the fact that my broker did not bring me all offers.

I wish he did, but I was relying on him 100% to bring me all good offers but I found out after I sold the unit that he did not do that.

Then I would report that f'ing scoundrel. There's no SOLimitatons on reporting this kind of behavior. I feel sorry for you and any others who have used this j*rkoff since...

NYCN --

There's confusion here. When a purchaser makes an offer, the agency is generally considered to flow through the written offer. "Hi, I'm X broker of Y brokerage, and on behalf of my client NYCNovice I'd like to make a purchase offer" establishes a buyer agency or "Hi, I'm NYCNovice, and I'd like to offer X to buy your apartment" establishes a lack of representation. You can have a case, I suppose, where the offer is "Hi, I'm NYC Novice, thanks for showing me that apartment at the open house; I'd like to make an offer to purchase it through your firm" which would establish dual agency.

The disclosure of agency form is a different kettle of fish; it isn't meant to establish intention. It even has "THIS IS NOT A CONTRACT" printed on it in big letters.

The fact that some agents are using the presentation of the disclosure of agency form as a chance to capture, or even browbeat, clients ... well, that's probably not something those geniuses thought up on their own. They're probably being trained by their firms (and I can guess which ones) to do so.

ali r.
DG Neary Realty

Hi Ali - I believe you are correct that somebody had instructed the agent to present the form already filled out with advance consent to dual agency marked. The broker's presenting it to me filled out with no discussion was offensive, and I just crossed out and re-marked and also made a handwritten note on the document; I also vaguely recall that she presented me with a non-standard document that was not a state or a REBNY form, but rather a simple form attempting to establish an ongoing relationship, also presented with no preamble or discussion. Her overall approach was so aggressive and off-putting that I was surprised that the landlord, who is a highly respected attorney, had hired her. At the lease signing, she showed up with a very polished gentleman who appeared to be in charge.

Coming back to the original question, I think it's very difficult for a buyer's broker to fully "earn" the typical buy-side split of 2.5-3%, no matter how good she is. Ironically, the value a buyers' broker adds is often determined not by her own skill, but by the ability and inclination of her client to complete relatively simple tasks without help.

Commissions are so high not because the work is difficult, but primarily because each successful transaction carries a lot of dead weight: clients who don't transact, brokerage firm overhead that has little value for a typical client, and shareholders who require a reasonable return.

I don't know the long-term solution to these problems. Maybe there isn't one. The reason I signed up with Keith B. four years ago was that I liked his short-term solution: minimize expenses, and give the difference back to the client, in the form of a big rebate check.

As for the question of whether a represented buyer (or a buyer represented by a non-REBNY firm) is at a disadvantage in competitive bidding, that's a tough one. I know that none of my clients has ever lost an apartment to a buyer who offered a lower price; but I guess it's possible that listing agents have steered sales away from us in subtler ways. At least the promise of a commission rebate gives our clients an extra 1.5-2% to work with during negotiations.

Ppl penny pinch others in order to justify their overall inability to purchase what they want while spending significantly more money than what it would cost to get what they want 30 minutes out of the city. The reality is the number of buyers or critics on this board versus the majority of buyers in Manhattan does not equate. People who purchase in Manhattan, in general, can afford to do what they do and the fact is trying to save 1%-2% on a purchase price is still just 1% or 2% and all relative. Bottom line is Manhattan costs more money and I've seen brokers who will cut their costs to get a competitive edge and that's understandable. In my opinion, the reality is I'm not going to use someone based off of the fact they save me 1% or 2% because I have the money to purchase what I want. If someone is just getting by or trying to purchase more home then they can afford then I see how the discount buyer broker gets business. Still, in the end, the contract's with the seller and they're chalking up a 6% cost in their mind as the cost of doing business. If you come yourself or come with a buyer broker, it doesn't matter. I can assure you that if you pay a good price for the property, the seller's broker will not withold that figure. But if you're trying to come in 5-10% below a well priced apartment in one with low inventory, you're not going to get your bid accepted or even countered. Money talks and that's the bottom line - what your buyer broker gives you back is gravy on the top but that's not an indication of stellar services they provide, it's a way for them to target the niche of buyer who's trying to get more home they can afford or who is just plain cheap. These buyers are not doing brokers any favors by using them as noone said to use a broker in the first place. I always use a specific broker for all my transactions (who I will not name) and for they job they do I don't mind if they split what already is going to the seller's broker. Aside from what books and disgruntled customers may say, the seller is paying that 6% no matter what - might as well use a buy broker for their knowledge and experience.

To anyone interested: I am an exclusive buyers broker who goes the extra mile and there is no extra charge or cost! In fact I may be able to save you a substantial amount on your Manhattan home purchase especially if you contact me before you commit to an agent/or broker. Looking forward to hearing from you!
Jolie Muss
Licensed Real Estate Broker & Brokerage
331 Columbus Avenue, New York, NY 10023
Office: 212 721-3301 Email: broker@joliemuss.com
Website: http://joliemuss.com
LinkedIn: http://www.linkedin.com/in/joliemuss

FYI Here is a link to the required NYS Agency Disclosure form that designates whether a broker or agent represents you, the seller or both (Dual is not really viable as the listing agent has a fiduciary responsibility to the seller) http://www.dos.state.ny.us/forms/licensing/1736-a.pdf

uh, sorry, realpro, that's the form all right, but you misinterpret it. But at least you've read it. I love to ask agents if they have ever read the form. Most give me a deer in headlights look in response.

@Flutistic - probably because they're thinking to themselves "who is this jaded person questioning me about my job while also trying to keep cool as to not look unprofessional in front of potentially real buyers (unlike yourself) by telling you how they truly feel. I'm sure you haven't yet and likely never will purchase a property. You're a spectator who could engage but probably is to afraid to put your money where your mouth is which is why you've never gotten respect from seller's agents when dealing directly because your cheap and haven't put in a respectable bid yet. You're trying to get a deal and they don't exist so instead of looking at yourself, you blame brokers. I'm a proponent of real estate brokers in Manhattan and invest often and can see even on this board how many respond with helpful answers. To the original OP, do yourself a favor and take some of these posters suggestions regarding going to OHs and interview brokers or even give KB or Ali a call. You have to start somewhere. The 6% is not affected whether you use a buyer broker or not.

*you're

Well, I have a Manhattan apartment in contract right now, I'm the seller, and I'll purchase again asap, but you're right about the fact there are no deals to be had out there, l2s.

"Money talks and that's the bottom line - what your buyer broker gives you back is gravy on the top but that's not an indication of stellar services they provide, it's a way for them to target the niche of buyer who's trying to get more home they can afford or who is just plain cheap."

The 2% that I saved by going with Keith Burkhardt almost paid for the central air part of my renovation.

Not very helpful on a day like today, but I'm hard pressed to think of anything a competing broker could have done for me that I'd value more than a cool apartment in the summer.

If anyone has any sophistication or knowledge about NY real estate and is looking to seriously buy an apartment, they would be a fool to not use Keith. You really need to go on his web site and understand his business model. Aside from his professionalism, ethics and knowledge of NY real estate, his economic model is made for people who generally know what they want and don't need a broker to hold their hand. After buying 3 apartments in NYC over the past 15 years, my only regret is not having used Keith on my first two.

Ok now I am curious about that Keith model. Concretely how does it work ? I am an unrepresented buyer. After visiting hundreds of places, I found a place I like. I am making an offer. After a few back and forth we agree on a price between me and the seller's broker. Attorneys draft contracts. I take of the financing with my bank. We sign. And then we close. (I am keeping the process simple). At what stage does Keith and his team step in and add value ? And for what price ?

fact--brokers have obvious conflicts of interests, at many levels, with their clients.

do not blindly defer to any professional for representation of you, in areas where you have serious financial exposure.

if you use a broker, keep a good eye on them, and require cc of any and all communications/inquiries involving your purchase or sale.

basicinformation: Although you might have the legal right to bring in a broker later, you will likely encounter resistance if you try to introduce one after the "I am making an offer" step.

Some listing agents will also push back if you have given them any reason (even pre-offer) to believe that you are unrepresented - such as signing in at an open house without identifying your agent; others don't mind at all - they just want the deal to get done. But once you have begun serious negotiations directly with the listing agent, it becomes hard to argue that Keith - or any other broker introduced thereafter - was the "procuring cause" of an eventual deal. There are exceptions, of course, so this is just a guideline. In general, if you want to ensure that Keith can collect the buy-side split - and pay your rebate - make sure he submits your offer.

As for what happens once The Burkhardt Group is involved, the service is pretty much the same as with any firm. There's a widespread misconception that, with such generous rebate terms, Keith must offer an inferior service. That's simply not true, except in the early phase of the search. On average, Keith's clients do more of the legwork to find properties that suit them. Once negotiations begin on a specific property, however, Keith has to perform the responsibilities of the "Selling Agent" fully, in order to earn the commission split.

I am on vacation with the family, however I will weigh in. west81st basically has expressed the essence of what we do. I am very reluctant to get involved with a client that has already had meaningful contact with the listing agent, I will usually advise they stay the course and if it does not work out we would be happy to work with them on future deals. There are exceptions, if the listing agent agrees to let us enter into the deal after they had direct contact (sometimes the listing agent is so fed up dealing directly with the buyer, when I call they tell me they would be happy to have me step in!) This is not always the case and I always defer to the listing agents wishes when they have already had significant interactions.

As West81st points out, we are not a limited service company, we don't (and won't) get involved just to hand out rebates. We have a model in place designed to represent the best interests of our clients in a 100% transparent manner, from property analysis, negotiation strategy to board package preparation.

Happy Holidays!

Keith Burkhardt
TBG

Would you go to court and let the plaintiff's attorney represent you? A buyer needs to have a partner in the home-buying process - representation is essential. Not only will they do the research for apartments (trust me, there are properties on brokers' search engines that you can't find), negotiate for you, prepare the really arduous board package and prepare you for the board interview, they'll also - if they're honorable - help guide you to a decision that will ensure you get the right property for the right price. True, the seller pays the commission. A buyer's broker who has any sense will be less concerned about the commission than about making sure you are happy - since we work primarily on referrals, if our client isn't happy, we will never have future business from that client, his/her friends, family, acquaintances.

A full service buyer's broker will have more value to a buyer moving in to a more remote and unfamiliar location, such as C0lumbia C0unty.

Wow - never thought my post would yield such a great discussion. Thanks to everyone contributing, has been real helpful. In fact, just started working with Paul Hyman (http://www.phpnyc.com) and so far so good - definitely renewed my energy and hope to find something great soon! All the best, thanks again.

Found an apartment myself. Saw it with the listing broker. No "open" house, no sign in. Mentioned in casual conversation that I had a broker to no response from the listing agent. Received an email from the listing agent later that day and responded that we were interested in making an offer and gave her the info of our broker (who we have been working on and off with-more off than on but thought a guide would be helpful in our first NYC purchase). she responded that the listing is an agency exclusive and they are not co-brokering at the moment. What does this mean and are we out of luck? thanks….

Good Afternoon, BBBUSTER,

I'm sorry to hear that the property you are interested in appears to be represented by a questionable and dishonest listing agent. Unfortunately, unscrupulous agents will take on a shark's mentality if the opportunity to make a 'direct' deal presents itself; her response to your offer is not all that uncommon, especially when the market is tight. Fyi, the term 'direct deal' is agent lingo and is used to describe a scenario when the buyer (or with regard to rentals, the lessor) purchases a home without the representation of a licensed agent. A direct deal is financially advantageous to the seller's agent as they would receive 100% of the commission rather than being required to split it 50/50 with the buyer's agent (a 'co-broke' deal). In your situation, the listing agent appears to have sensed that you are, with all due respect, an inexperienced buyer and do not have a good agent working on your behalf, so she created a road-block between you and the apartment you are interested in purchasing. She is clearly assuming that you are not aware of your legal right to retain the representation of your choice and that you will agree to her terms if you really do want her listing...when a shark smells blood. This listing agent's behavior is a good example as to why it is so important for a buyer to have an experienced agent's representation, especially a first time buyer.

So, the real estate law in short as it applies to your situation: after an initial 72 hour period immediately following the execution of an exclusive listing agreement between seller and agent, where the listing agent may advertise solely to agents within member brokerage firms, the agent may not fail to make his/her listing available for sale to any interested and qualified party or prevent a buyer from obtaining representation. This practice is a breach of an agent’s fiduciary responsibility to his or her client and violations of this real estate law constitute a misdemeanor, which can be subject to prosecution. The Department of State can issue a large fine as well as revoke the agent in question's license. Also, agents who violate REBNY (Real Estate Board of New York) rules can be ousted from board membership, which is tantamount to getting blackballed from the industry.

Again, I am sorry you got stuck with a dishonest agent who is further adding stress to an already stressful situation. Her lack of moral integrity and unlawful actions cast a dark shadow over the many loyal and honest agents that are passionate about real estate and working on behalf of their client's best interests. I urge you to explain your experience in writing to the agent in question's director/manager ASAP. Wishing you smooth sailing from here on to the closing table.

Sincerely,

Tristan Andrews
Douglas Elliman Real Estate
TAndrews@Elliman.com
(c) 917.376.1839

Can I talk to your supervisor?

That's a good one. Expect mountains to move on your behalf thanks to Tristan's advice.

Don't say another sentence to the listing agent (or his supervisor) unless it has Department of State or REBNY in it. Either that or mail your offer to the owner's address and tell him why you are going around the broker.

First off co-broking as in sharing commissions is not required by law. We shouldn't assume BBB's apartment is in Manhattan, or that the brokerage belong to REBNY. Tristan's talking REBNY.

So BBB sure, you can use a buyer's broker, but you would have to pay the 3% commission out of pocket yourself directly to that broker. This happens in other states (Hawaii I know of for sure, I have relatives there who did this.)

This agent behaved stupidly but I don't think it's complaint-worthy, as somebody who has complained about agents several times to the DOS.

Great advice crescent---mail your offer to the owner, if they are still living there. That is the right thing to do if you want that apartment. In most cases it's easy to find their names using a site called ACRIS, BBB. If that doesn't work, and it doesn't always, there are other ways such as tax records but that's a long subject. Another thing I would do is mail the offer via US postal mail in one of their fancy envelopes--next day air, whatever.

One thing, I would be most gracious in my wording and I would certainly not accuse anybody of anything.
Your agent is not your friend (unless of course they are) but sellers often bond with their agent as if they were a friend.

If the owners are not living there, or perhaps even if they are, I would call the manager and they might work with you.

But if the seller's agent wants you to ditch your agent ("broker"), you're going to have to do it or else pay them yourself, those are your two choices as I see it.

If you don't want to be so brazen with the direct route, you can first try basically ignoring the listing agent's words by submitting an offer to them with your broker and having your broker communicate that s/he needs to know within 1-2 days if the listing agent does not have a 'submit all offers' agreement, verbal or written.

It essentially indicates "F U. Do your job."

If that doesn't work and listing agent remains obstinate, send a FedEx to the address directly.

This comment might be slightly off-topic, but Tristan's post contains an assertion that bears some discussion:

"Also, agents who violate REBNY (Real Estate Board of New York) rules can be ousted from board membership, which is tantamount to getting blackballed from the industry."

I agree that getting ousted from REBNY would be a serious black mark. This type of disciplinary action is rare, so a member would have to do something really heinous to get ejected.

On the other hand, there's no requirement for a firm - or its affiliated brokers/salespeople - to join REBNY in the first place. REBNY membership does two main things for a firm: member firms are bound by a universal co-brokerage agreement, which makes it easier to collaborate and share commissions; and REBNY acts as the industry's lobbying arm. Member firms pass the cost of membership to clients as one small part of the overhead that is reflected in the industry's prevailing commission rates.

REBNY depicts membership as a kind of Good Housekeeping seal. I'm not aware of any evidence that member firms are more ethical than non-members, or that they provide superior service. REBNY members seem to be united more by common economic interests than by a commitment to the Board's code of ethics.

Of course, this is the view from outside REBNY. I chose to join a non-REBNY firm, deal with some extra co-brokerage paperwork and pass the savings to my clients in their rebates. REBNY membership clearly has advantages for many firms; otherwise, REBNY wouldn't exist. But the suggestion that it's impossible to do business outside REBNY is misleading at best.

As a longtime REBNY member, I disagree with W 81.In addition to what's citied above, REBNY also provides significant continuing education and forums to share best practices. The cost of that per salesperson is pretty minimal (my firm just paid my dues, so I don't remember if they were $325 or $350, but one of those numbers is correct.) The way I see it, do 10 deals a year and that's $35/deal, not a significant cost for being in an association that maintains professional standards.

ali r.
DG Neary Realty

Back to the original question, with a bit of a twist: I keep expecting my buyer's broker to find apartments that meet my criteria before I see them myself on StreetEasy, but that isn't happening. Most of the time I am emailing HER to let her know I am interested in a particular apartment. In this environment, is it asking too much to expect a broker to do any leg work?

Question on Keith's service.

I assume the price is 3% less if you go it alone, or really 1.5%-2% after Keith's discount. So you are effectively paying 1.5% for what exactly? Comps? Board package help? I guess if he is good at negotiating and you are not and can reduce the price by more than 1.5% then it is worth it. Is that it? Is he a phenomenal negotiator?

Or is there other aspects I should account for?

Sellers may prefer to deal with a buyer broker rather than a DIYer who is going to have more questions and potentailly mess something up along the way. Unless of course, you are an experienced home buyer and/or are purchasing in a quick, non-financed deal. We went alone, with dual agency broker (whatever it is when they rep seller and buyer), and ultimately a buyer broker who put together a good application that convinced sellers to make the deal with us. Maybe in a weak market it would not matter but in this one, every little bit can help.

wad: Keith is an excellent negotiator, but the bigger issue involves your assumption about saving 3%.

In the absence of a buyer's broker (in New York, I think the proper term is "selling agent"), you are correct that the commission paid by the seller is often reduced, but not by as much as you are assuming. The contract between the seller and his broker (the "listing agreement") normally allows the listing broker to keep part of the money that would otherwise have paid for co-brokerage. In the case of a full-commission (6%) listing, the commission might drop to 5% or even 4%; on the other hand, it might remain at 6%, if the seller hasn't negotiated a discount. It's very unlikely to drop all the way to 3%. Why? Look at it from the listing broker's point of view: an unrepresented buyer usually requires more work - much more if the property is a coop or a restrictive condo - and often carries more risk of a Board rejection or a financing failure.

Beware of any listing agent who claims you're getting a 3% discount (or any particular discount) by coming without a broker. The claim is completely unverifiable, because there's no way to know what the price would have been with a broker. You won't even know how much the commission is really being reduced - or whether it is at all - until the closing. A realistic best-case view of your potential savings is 2%, which Keith offsets with a rebate check.

That brings us to what might be a better reason for going it alone: some listing brokers do tilt the scales toward unrepresented buyers. It's a breach of their fiduciary duty to their seller clients, but there's no denying that it happens. If the property you want is listed with such a broker, you are more likely to win without an agent on your side. Keith's solution to this problem - if all else fails - is to step out of the deal when he or his client detects this kind of bias. Of course, the bias can be subtle, and at times it might be detected too late; but considering the percentage of deals that have brokers on both sides, the bias can't be pervasive. In fact, most of the top producers I've spoken to prefer co-brokerage to working with unrepresented buyers. Their reasons vary somewhat, but generally distill down to one theme: time is money. Most good brokers would rather go pitch their next listing than vet a buyer or shepherd an in-contract deal through the Board process.

hijack to correct one point in West81st's response (W., forgive me if you think I'm being pedantic) -- even as a buyer, you should know what commission is before closing.

For one, you could ask the listing agent before making an offer. If he/she didn't tell you (and I can't think of reason why he/she wouldn't) you'd know after the accepted offer, because commission appears on the deal sheet sent from the listing agent over to your side -- if you're without a broker, that goes to your atty, who you presumably talk to.

I guess if you're unrepresented and there's no co-broke, the listing agent *could* leave commission off the deal sheet, but in practice -- and I've been doing this for eight years now -- I don't think agents do.

ali r.

West81st
about 2 weeks ago
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>I agree that getting ousted from REBNY would be a serious black mark. This type of disciplinary action is rare, so a member would have to do something really heinous to get ejected.

Very nice to hear.

West81st
about 2 weeks ago
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>REBNY depicts membership as a kind of Good Housekeeping seal. I'm not aware of any evidence that member firms are more ethical than non-members, or that they provide superior service. REBNY members seem to be united more by common economic interests than by a commitment to the Board's code of ethics.

Also, very nice to hear.

West81st
about 11 hours ago
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>That brings us to what might be a better reason for going it alone: some listing brokers do tilt the scales toward unrepresented buyers. It's a breach of their fiduciary duty to their seller clients, but there's no denying that it happens.

Oh

but you can take a $350 course:

front_porch
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>As a longtime REBNY member, I disagree with W 81.In addition to what's citied above, REBNY also provides significant continuing education and forums to share best practices. The cost of that per salesperson is pretty minimal (my firm just paid my dues, so I don't remember if they were $325 or $350, but one of those numbers is correct.) The way I see it, do 10 deals a year and that's $35/deal, not a significant cost for being in an association that maintains professional standards.
ali r.
DG Neary Realty

Ali: You're right - the commission is on the deal sheet, so a savvy buyer can find it out before signing a contract. It's certainly worth asking. If it turns out that the listing broker is pocketing a full 6%, or even 5%, it might even be worth trying to renegotiate the price and make the broker eat the difference. I doubt it would work very often, but you never know.

My main point, though, was that a 50% commission reduction for a direct deal is rare, so "wad" was starting with a flawed assumption about saving 3% by going direct. Did I get that part right?

West81st: My opinion is that you got "that part right".

W81 -- I have done it every which way under the sun, and your assumption is about what everyone does, which I can't know -- but on the face of it, what you say sounds right.

a

A buyer broker can be really beneficial. I recently helped a client purchase a home in NYC. My clients did NOT have to worry about paying my fee for using my services as the seller was paying the fee already. Many buyers who go directly to the listing broker think they will reduce the amount they pay for the apartment. When in fact, the seller has ALREADY agreed to the amount they will pay the seller and selling broker for procuring and brokering a deal. As a selling broker, I was able to help my clients deciphering the up-to-date information, help with the board package and board interviews and help with any questions or concerns along the way. Had my clients not used a broker they would have provided much for financial information and might have quit along the way due to the time it took to get the process done.

help deciphering the up-to-date information is helpful.

The value of a buyers' agent is not in searching for listings and sending interesting ideas. Unless you are really lazy most people do it themselves on sites such as StreetEasy (really great search feature with the boundaries by the way). It's way more efficient actually for people to search by themselves. I've often heard stories of people saying they've already seen listings themselves on StreetEasy when agents take a few minutes to send them a few ideas.

The real value of a buyer agent is advice/guidance through the process plus the ability to provide a buyer agent rebate to the buyer (http://www.hauseit.com/how-do-i-get-a-buyer-agent-rebate-in-nyc/).

Other than that, there's no real value to a buyer broker. Why would you do someone a HUGE favor by essentially handing them 3% of the home purchase price? Even though you don't pay them directly you are still doing so by paying a higher purchase price. As a result it doesn't make sense not to get a buyer agent rebate.

Last note: make sure you work with someone who doesn't openly discount. Imagine how awkward it will be at the closing table if your buyer agent openly discounts and everyone at that table knows they are giving away most of their commission. Pretty embarrassing if they even get listing agents to cooperate with them in the first place.

On the last note: Nothing awkward or illegal about a rebate. Keith does it and his business is booming.

Just curious RiddhiBman do you work with/for Hauseit? It is kind of weird that in the blog referenced above they talk about discount brokers being 'shady', trying to subvert the system or something. However the writer then goes on about hiding the fact that they are discount brokers yet hauseit also is all over the web talking about how they discount commissions; confusing?. Don't you think sooner or later those 'agents' that are affiliated with hauseit will be exposed as (cue the misic) Discounters!!!!

We believe in being 100% transparent, with our clients and with the entire brokerage community. And it's worked out pretty well (look at our website). We are a full service company that can afford to rebate commission because of our highly efficient biz model and leveraging technology in a way that lets us add value to our client. Think about what technology/innovation did for buying stocks, diamonds, travel and just 'stuff' in general. Sort of made it better and less expensive. I love Amazon and Bluenile!!! That said, some folks still like to walk into Tiffany's to buy that rock, different strokes for different folks. But it's nice to have choices and it makes for more effecient markets. We decided a long time ago that monopolies were not good for business, the country or consumers. So there is no reason to hide from the rest of the brokerage community. We have great relationships with with the brokers we work with. Some of the big dogs even reach out to me directly when they have an interesting listing. We get deals done.

Why would a listing agent not like us?? We have very happy/smart buyers that are easy to work with. We get deals done smoothly and it doesn't cost the listing agent or seller a penny versus any other buyer broker transacting! And in many cases it is BECAUSE of our model we get to contract. Listing agents and sellers want to sell to the highest, most qualified buyer, the story ends there. Unscrupulous agents will be unscrupulous regardless.

Honesty, transparency coupled with knowledgeable, articulate brokers is our method for world domination (:

We are coming up on our 10 year anniversary!

Keith Burkhardt
The Burkhardt Group

Keith has represented me in several large transactions from $1mm-$4mm where the listing agents were top brokers. I had no issue. They were are all very happy to sell to whoever offers them best price and terms.