Should a buyer always use a broker?

They can do the bulk of assembling your board pkg, so there's that.

There is no advantage in 99.99% of purchases in NYC. I can tell you this after 8 years of exclusively working with buyers . And this is what every buyer I have worked with has told me as well (and many initially went alone expecting an advantage). Instead they received biased representation where the motivation was yes, to push the deal through, but at the buyers expense. Absolutely go it alone if you don't want to deal with vetting out a good agent for yourself. But don't think for one minute there is any advantage. The listing broker will (rightfully advocate for the seller) and himself; not for what is best for you. I have a new client that still can't quite grasp they are not better on their own. Now twice they have been burned working without their own representation.

Ask any agent at any large firm "should I have my own agent?" They all will wax poetically about why you should, even most listing agents. Any agent or broker that says no, you shouldn't , their motives should be questioned. There are many knowledgeable and trustworthy agents out there, take the time and find one that works with your temperament.

Read what the Dept. of State General Counsel has to say on this matter:

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

Keith Burkhardt
The Burkhardt Group

Keith, I think the key phrase in your answer is "knowledgeable and trustworthy agent" - to be honest, I haven't found that many. There are some true professionals, to be sure, but many barely know what they're doing. I would agree that someone who really knows the board, how to negotiate, etc., will be an asset, but in my experience too many - at least in the under a million category - just don't bring that much to the table if you are yourself a relatively savvy buyer.

Point taken. However I also think most listing agents are more straight forward with another agent/broker than directly with a buyer- Just my two cents. The problem is there are just too many agents out there, so it can be daunting finding one! I know from 28 years in this biz there are certainly many duds, but you know I hardly ever deal with them cause they ain't too busy!

Dig around, ask friends, co-workers and this board! Good luck either way!

Keith
TBG

I would agree that below $1m, there's no reason to retain a buyer's broker. I didn't use one when I bought an UES co-op, which meant I had to negotiate and assemble the board package, which took about 2 hours and wasn't very complicated. If you are comfortable pushing back on price and collating paperwork, you may as well skip the buyer's broker, because 1) the selling agent will prefer taking a deal with a buyer lacking representation, as it means no commission split, and 2) the seller should prefer taking a deal with someone lacking representation, as the total commission will be smaller. So you'll be in a better negotiating position.

It is silly not to use Keith who will give you a rebate from the commission he receives. I have used him for 3 purchases.

My feeling is that if you don't want to use a buyer's broker, don't use one -- but I feel that way on the sell-side too. If you want to FSBO, then bless you.

But there are still clients who want service -- one bit of which is negotiation skill, and one (large) bit of which is keeping them from buying into a problematic building.

Another aspect, though, is that we buyer's brokers do assemble the board packages -- and, roje's experience notwithstanding, they rarely take just two hours.

The package I handed in this past Sunday was more than one hundred pages, and it took more than two hours just to copy it and annotate the several copies, let alone assemble it. (Working with the client, assembling it had taken about two weeks ...this, for a sub-one-million-dollar purchase .... a one-bedroom in Brooklyn).

The package I did before that (admittedly for an apartment in Manhattan that cost more than a million dollars) was nearly 700 pages long. About half of that was the buyer's taxes, but that still left many many pages of financial documents that had to be assembled, curated, annotated ... my clients tend to have financial sprawl, and they pay for the service of having someone else trim that into a nice little topiary for the board.

ali r.
{downtown broker}

@300 and provide you with reliable insights, complete the board package as well as competently handle the valuation and negotiation. (However in 300's case he is pretty good with numbers :)

A buyers agent can also help you with competent referrals for RE agents, mortgage brokers etc that they have worked with repeatedly and are reliable. They can also handle the stress of pushing things along when kinks come up in the process so it's not all on you. I would use one.

^^sorry i meant referral for RE attorneys

Keith, You are indeed very good negotiator and happy to tell your buyers to step away if you do not think the price is right. In addition, the service from team is indeed very nice. Your associate Christian even checked the electrical outlets at the walk-through at the previous deal.

I am pretty sure that the NY State AG's office has indicated that they would prefer to see 2 brokers on every deal to avoid the "dual agency" dilemma.
http://www.dos.ny.gov/cnsl/dualagcy.html

I agree that there is zero advantage to buying without a broker in NYC. Many of my clients also come to me after going it alone, trying and failing to realize an advantage or discount on the purchase. It is just not how real estate brokerage works in the vast majority of sales.

Dual agency is an unwaivable conflict of interest. When I am hired to handle a sale, I never ask or agree to represent an unrepresented purchaser in that sale because my loyalties are 100% to my seller client, and I don’t see how I will be able to give unbiased advice to a party whose interests are diametrically opposed to those of my client. Although many agents will say that they can wear both hats, it is simply impossible to do so responsibly.

This doesn’t mean that you absolutely need a buyer’s broker. Certainly there are many brokers out there that would be a liability and provide negative value, but if you are paying for one anyway, you might as well work with one that can complement your independence with honest advice based on a deep understanding of the market and how to quarterback a transaction.

Dan Gotlieb
Digs Realty Group
www.digsrealtynyc.com

Yes absolutely you should use a buyer's agent. In NYC REBNY makes it so professional that listing agents bend over backwards to be nice to buyer's agents. The co-broke is automatic. Buyer's agents are comfortable sending their clients to open houses and even showings alone. That's how it is, so there's no disadvantage.

With that said, you should definitely consider one that gives you a more ample closing gift than a bottle of wine (disgraceful). I got a $10,000 check from my broker at closing. Best part - the guy was full-service so there was no reputational harm. All the other brokers liked him, experienced no issues.

Agree with comments here. You're at no disadvantage to use a buyer's agent in NYC. REBNY rules are strict. Listing agents can't mess around and not co-broke.

A buyer should ALWAYS use a broker. Why? Because you're paying for representation whether you choose to have it or not. The 6% broker fee is built into the sales price. You are paying for it so why not take advantage?

Furthermore, you are at no disadvantage to using a buyer agent per comments above on the strict enforcement of co-broking by REBNY.

Lastly, you might as well get a buyer agent rebate and get 1% off your purchase price in a check or closing gift card at close. You're probably doing a lot of the work searching online, so why not get some of the commission back?

My personal opinion is you should hire a broker. He has access to a huge number of listings. And that could increase your chances of finding condo that meets your exact requirements.
Besides, there are bidding wars, that you wouldn’t probably handle as good as the broker does.
You can work this dual agent, who will represent you and the seller. Then the price you pay could be smaller. But, I advise you to work this your own broker. You need to work with someone you can trust and whose total loyalty is to you.

At RealDirect, our point of view has always been that different buyers and sellers have different needs, and the "one size fits all" approach to brokerage doesn't make sense. This thread was started with the assertion that FSBOs don't make sense, but our Owner Managed service is a highly effective way for sellers to get the cost savings of a FSBO with the expertise and distribution of a broker if they are willing to do some additional work and have the ability to get it done. On the buy side, some experienced buyers may prefer to go it on their own because they do not want a buyer's agent incentivized by a commission to influence their deal. However, with proper vetting, buyers should be able to find high quality, ethical brokers who will provide a tremendous amount of value to the client - especially when we provide a rebate on top of the expertise we (as well as others on this thread) bring to the table. Of course the big misconception is that a buyer will get a better deal if they go direct (without an agent). Unfortunately, there is no way to know if this is true. In certain cases, a buyer will have an advantage i.e. if the seller has a different agreement with the buyer if the client is direct, it's possible that they would have an advantage going direct. Furthermore, if the listing broker is unethical, they may sit on an offer from a broker represented buyer until their direct deal gets done - or they may simply advise the seller to take one deal over. However, in the vast majority of deals, having a buyer's broker does not put you at a disadvantage and in fact has many benefits (without even taking into consideration the rebate). And these benefits heavily outweigh going it alone.

Doug Perlson
www.realdirect.com

As a real estate broker, the answer you would expect from myself would be a resounding yes – a buyer should always use a broker. It’s in my best interest to respond in such a manner. However, in my opinion as both a broker and a buyer, the answer is - it depends. It depends on two things – your knowledge of real estate and the broker’s knowledge and experience in real estate. I’ve worked in this industry for multiple years and I wish the barriers to entry into this profession were stronger. There are quite a few unethical, ill informed, and novice brokers in the field. I should know as I come across some of them on a daily basis. At the same time, I’ve met brokers who are worth their weight in gold. It goes beyond preparing a board package. Most savvy buyers can put that together by simply following the instructions. The value of a broker is beyond finding a property. It’s vetting building financials, understanding seller psychology, negotiating intelligently (not always about the price but rather the terms), market knowledge, building resale performance, listing broker’s tendencies, introduction to the right attorney, title company, and transparency of closing costs such as flip taxes, transfer taxes, and mortgage recording fees. I do not offer rebates. I offer advice and strategy that provides the buyer with leverage in the transaction.

Karan Chopra
Nestseekers

It's definitely a tough choice and something we did a lot of thinking and research on before pulling the trigger. I mean it's really tempting to have a buyer's broker because 1. we're all super busy with work and 2. they say it's free and if I'm not signing some sort of agreement then why not.

However, Karan agreed there are probably way too many agents in this city (50k according to Hauseit?) and most of them are way too green. What's the point of having a middleman get in the way then?

I def think it's important to have someone seasoned and real to work with. What's the best way to reach you Karan, will connect you with a few friends who are looking.