2 Agent or not 2 Agent that is the question...

I agree with you and I think that it is a reasonable game plan. I think the fewer agents in the deal, the better. I think there is a possibility of more flexibility with the price, without having two agents in the mix, who both need to get paid. One agent might be willing to kick a little into the deal if you're really close to agreement in order not to lose the sale but I doubt this is possible with two in the deal.

If you can type up an offer letter and come to some agreement in terms of price with the buyer and buyer's agent, then it can be clear sailing once you get your attorney to work on drawing up the contract.

Another advantage to working without a buyer's agent is that when you go around to see apartments, there is nobody listening to every word you say to see which way you are leaning. Also, buyer's agents can steer you towards or away from certain buildings. Why not make up your own mind based on what is on the market?

I still believe that the buyer's agent works for the seller and not for you. Many will disagree with me, but as long as the buyer's agent is paid out of the seller's commission, they do not work for you. Your lawyer is the only person representing you in the transaction, after all, you pay your attorney directly.

Now, the brokers will soon attack this thread and tell you to use a buyer's agent. Brace yourself.

i agree as well but would suggest that you brace yourself for the inevitable pushback from the seller's agent. i also would caution against thinking that this will net you some or all of the missing commission as the seller who will undoubtably be significantly lowering their price will be trying somehow to recapture that money as well. not sure how you handle an offer either; would suggest soliciting your attorney's advice and would be curious to hear the upshot.

I'm not sure you would save any money either, but for me, the comfort of not having some third wheel hanging around all the time is worth it. I can speak frankly with my wife about what I have seen without being overheard.

columbiacounty,
Why can't a buyer submit a written offer that includes the price and other terms? What is wrong with that? Nothing is binding until a contract is signed by all parties. Before that it is all haggling over price. I am not sure what you mean when you talk about handling the offer.

how do you discuss the missing commission? i.e. here's a $1 million offer but you don't need to pay me a commission? or start by deducting and then throw back in at the end?

You do not discuss the commission. THat is none of the buyer's concern.

The seller's agent will certainly be happy to see you alone without some other agent. I don't think you get to talk about the missing commission at all, just work as hard as possible to get a good price.

but...supposing there is a buyer's agent...how and when does their commission get brought up?

It splits 3% buy side 3% sell side, with the agents getting 1.5% each, and the other 1.5% going to the agencies in question, as far as I know.

The commission stuff is all spelled out in the listing agreement that the buyer signed with their agent.

You as the buyer can reserve the right to bring in your broker right up to the last second. Lets say its a 2mm apt, 120k at risk. Buyer agent will get 60k. 48 hours before closing, put your offer on ebay, offering to give commish to an agency, agency with highest kickback to buyer wins the free commish.

The last second, of what, the last second before the contract is signed? After a price has been agreed to by three parties, bringing in a fourth party at the last second will most likely blow up the deal.

I agree that in a competive marketplace you could do well with one broker as they will push seller to accept your bid at twice the commission! -- but their agreement is contractional and the seller pays the cost. so your bid price is your bid -- Bid low. and stick to it. Waiting will do you better

In current environment the one with the jake calls the shots. To not use that advantage to its fullest is just silly. Burkhardt, Noah and others will hopefully be successful in leading the change in the currently flawed formula.

When you put pen to contract you can include whatever you want. No boilerplates. You want the closing to be held on a boat in the middle of the pond in the park you can. Seller or any of the other sloths that get paid by you have no say. Seller doesn't like it, tough, he can find a new buyer.

I think it not believable that in this environment to think that brokers are purposely letting deals blowup. They are starving.

You mean contractual, contractional is different. ;-) Yes, manhattanfix is right, working with one broker may help you out in terms of moving a seller. Nothing is guaranteed, however. We bid what we thought an apartment was worth, with only a selling broker, and the seller's agent was not able to move the seller. Eventually, months and months later, they beat our offer and sold the place. I am glad now we did not move our price or take the place. We have since changed our mind about what we would like to buy.

patient09
If you have gone through all of the negotiations without a buy side broker and have used it to your advantage in negotiating price, then I would bet that introducing a broker at the less minute would blow up the deal. You would be seen as bargaining in bad faith, and I would agree, you were bargaining in bad faith.

i am fairly new to the site and so this may have been previously discussed exhaustively but no one is mentioning that a buyer broker has a responsibility to represent the buyers interest while the listing broker is responsible to the interest of the seller. this of course assumes the buyers broker has information that the buyer doesn't have personally. i have been a broker, a buyer, a seller- i have managed a real estate office. in my experience there are great buyer brokers out there and its not that hard to know if they know what they are doing after a conversation or two. and.. in my opinion.. the mechanics of real estate in nyc aren't really set to give a buyer a discounted price reflecting the absence of a buyers broker.

i could not be more un-solicitous. just my two cents.

heh?

what is an example of information that the broker would have that the buyer would not?

You can tell them all along if you like that you will be bringing in a broker to be named later if that appeases the masses, use your 3% to your advantage, thats all. Remember, its no skin off the sellers back, same net price to them. But most importantly, it's all the buyers money that is being divvied up at closing. Seller knows this.

you really can't imagine this happening? maybe there is loud noise in the middle of the night for a lower floor unit from a club next door that you cant tell even exists during the day, a barking dog that you don't hear when you see the space, pending litigation with the developer because the floors are buckling in half the apts., a big pending assessment bc the building is redoing the facade...

patient09,
Very funny, a broker to be named later. No thanks on negotiating in that setup, name your players from the beginning or they're not in the game, that's what I would say. I will be sure to watch for this trick in the future, thanks for mentioning it.

Commission reduces the seller's net, so that comes out of the seller's pocket. In this downward market, the seller's commission might be the difference between profit and loss for the seller. It might also be all loss.

Sorry, I am unable to believe that a buyer's broker actually represents the buyer. Call me cynical, but that's the way I feel. I don't feel that anyone besides my attorney actually represents me in the deal, based on the way the people get paid. I want someone who is willing nix a bad deal, the agents will not do that.

Look at how many people in this country got talked into bad deal. Where were their marvelous buyer's brokers? I would say that everyone in the entire country should use a lawyer, from day one.

mdb,
Buyer's agents get paid out of the commission, they're not going to say anything that might ruin the deal, once someone has expressed interest and has started bidding on a place.

mdb

"maybe there is loud noise in the middle of the night for a lower floor unit from a club next door that you cant tell even exists during the day, a barking dog that you don't hear when you see the space,"

how would the broker know about this type of thing---barking dogs?

pending litigation with the developer because the floors are buckling in half the apts., a big pending assessment bc the building is redoing the facade...

the first two are covered by standard reps and warranties in purchase contract and your lawyer could easily alert you to the last fact after having read the minutes of the board meetings.

Ah, barking dogs, I was being shown an apartment once where the agent was telling us about the no pets policy, while a dog barked in the background from the apartment next door. I finally mentioned the barking dog and the agent said the beast had been grandfathered in. ;-)

I've nixed bad deals while working with clients, but I realize that I'm a rarity. If you don't want to use a buyer's agent, don't -- I think people who like to DIY should. (Although I'd argue that many, many people who got talked into bad deals used attorneys!)

However, realize that according to New York State, you pick your representation when you put in an offer. So if you come in without a buyer's broker and make an offer on a property, according to New York State, you've declared that you didn't want to use a broker.

If you try to bring in a broker later in the process on that property, you will end up with a mess. The seller's broker might possibly point out that he or she had already been the procuring cause of the deal and that your last-minute buyer's broker deserves no share of the commission.

Also, be aware that sometimes listing brokers take stepped-commission contracts, so it's possible that the listing broker might not be at full commission if you come in without a broker, and might not have that 3% to give "back" to you. It might contractually have already gone back to the seller.

ali r.
{downtown broker}

407PAS
my point is not all brokers are looking for one off deals with the people they work with. if you are going to buy then a broker having info that would cause you to walk away from a deal means you just move on to something else. it is still self interest if you look at a relationship involving multiple deals over time more valuable then one and out. not going to have much of a career otherwise. and regarding brokers being paid by the seller- make no mistake ALL sellers consider what they want to sell there property for then consider what they would have to pay brokers so the buyer is paying part of the brokerage fee.

columbiacounty

a few years ago i had a buyer interested in a 2nd floor apt. at 505 greenwich. they were an out of state buyer and didn't really know the neighborhood. it was very easy for me to find out the club don hill next door got really loud at night. no attorney would have found out about this.

mdb,
Good points. I choose to do my own research so that I only have myself to blame when I do not uncover the fact that they're building a heliport over my head and the apartment next door is owned by someone who runs a competitive dog barking school. People are free to do what they want with regards to this issue. I have heard people say nasty things in reference to what their brokers have not told them. I think the fact that I do not use a buyer's agent makes me work harder to learn more about the property because I don't expect anyone to tell me anything about the property and its flaws.

front_porch,
Yes, I am sure that lawyers can also do a poor job of representing their clients. I guess buyers have nowhere to turn. No wonder so many of them are in trouble. It is time for buyers to think for themselves. What a concept.

I am not trying to reduce a commision or think I'm saving money. The sellers RE agent is entitled to the complete commision. The fact that there is no'split' would only motivate the agent to root for the sale. In essence, the broker now works for me and will push for a reasonable outcome. If there is another bidder who has their own agent...there goes some dinero out of the agents pocket. The plan is to keep everyone working for me and for me to be able to read the situation with the least amount of distortion during the haggaling process.

falco,
It may work for you, it may not. If the seller will not move to your price, it doesn't matter if you have a team of horses on your side trying to drag him there, you won't have a deal. You are correct when you elude to motivating the seller's agent to root for the sale. That agent wants the deal done as soon as possible so that he can move on to the next deal. The seller is the only one who wants to hold out for a specific price.

In the case of my deal I mentioned earlier, I think our offer was about $35k under the eventual selling price. The seller's agent's 3% of that is only $1050, chump change for him, considering he did not have to split with anyone else. The agent told me he did not think he could get the seller to accept my price and he could not, so the deal went down in flames.

Ali makes a couple of very good points. In most cases a sellers broker(especially in this market) is getting 4% on a direct deal maybe even 3%?

Falco you sound like you prefer to go the DIY route for multiple reasons, don't care for brokers ?:). But how would you feel about having an experienced broker work with you for a flat rate? Or perhaps agree to work for 1/2% or 1% and after a price has been agreed with seller we ask them to shave another 2% off. Why not it's coming out of my pocket?

I was so bearish on the sales market that last spring I left my firm and struck out to focus on rentals with a discounted fee model. That said I am still bearish and would advise it's best to wait a bit longer before "pulling the trigger" as they say. But I am exploring alternative models for those that are selling homes and those that insist on buying now.

Reading all of this is somewhat sad, being a new real estate agent, or new in the sense of a couple of years, and really learning, and knowing real estate, and feeling very passionate about it, and being good with, and really thinking that I want to be a buyer's agent, this is pretty depressing to read. However, only I can give the worth to what I do, and without going into here as to what I bring to the table as a buyer's agent, I go to sleep confident, that the services I provide, regardless the greed and situation and who cuts who out of what, I still feel pretty good that this is something I may want to continue to do. Representing buyers, not sellers.

Sorry bmw,
I feel for you but I still don't see how you can represent the buyer, given the current payment structure. This buyer agent thing is a fiction perpetrated by the real estate industry, as far as I am concerned. I am tired of dealing with so many agents who only represent their own interests, and not mine, no matter what they say. Why not be a buyer's counseler for a flat fee. Then, I might think you are on my side, otherwise, I do not believe it.

or, I think the buyer's counselor would somehow have to be paid hourly, in a way that does not tie their pay to a specific deal, but also does not reward them for nixing deals arbitrarily. Tricky business...

i think the apt analogy would be discount brokers (Charles Schwab, ETrade, etc) vs. full service (Merrill Lynch). For people who are not inclined to do anything for themselves, the full service model makes sense not to mention the very important fact that wealthy people like to be treated nicely. If you know what stocks, etc you want to trade, Merrill Lynch not only doesn't pay but is a pain to deal with vs. the discount guys.

The problem is that in real estate (with a few notable exceptions--many of whom are represented on SE)no one has been willing to acknowledge this real distinction.

I am reminded of how nicely Madoff treated rich people while he fleeced them. Don't wealthy people have enough brains to negotiate their own deals? How in the world did they get rich? Did they inherit their money and are in the process of losing it?

There is a scene in a Woody Allen film where the nanny comes in with some ridiculous woven piece of artwork and says it was a bargain at $10k or whatever. The wealthy New Yorker says, great, put it over there in the corner. I hope I never get so rich that I am taken so easily.

When do we get to experience unmediated reality? One of the reasons I sell FSBO is because I actually enjoy speaking to buyers, and the traditional process treats the seller like some pariah who has to hang around outside his own building while his agent does magic tricks in the apartment.

columbia - i agree with what you say. the obvious comparison is discount vs. full-service brokerage. the only thing that i would disagree with is:

"the very important fact that wealthy people like to be treated nicely."

Not in all, but in most cases wealthy people get their asses kissed all day long. They don't want to be treated nicely. They want someone to get things done and someone to blame when shit they won't do themselves goes wrong. It's the "little people" who want to be treated nicely. If you treat them just as you would the "wealthy people" they notice and they realize sincerity, not just someone trying to get at their money - because they don't have much. Find someone who does that and you have found a good (sales)person.

Good points, sniper. Yes, I think people hire agents because they want to have someone they can blame when things don't turn out the way they expected and they don't want to take responsibility for their own decisions. I feel it is a way of avoiding life. If I make a bad decision with regards to buying a piece of property, I will accept full responsibility and not blame my buyer's agent, for I will have none.

I will put a plug in for the Dignitarian Foundation, an organization that promotes the dignity of all persons, regardless of status.

http://www.dignitarians.org/

407 You really sound like you have had some terrible experiences with RE brokers. I may sell and rent real estate but that certainly doesn't define me as a person. I look at it as a job to perform and I want to do the best I possibly can.Money is not the driving force in my life, perhaps that is why I don't have a lot of it? But my life has been very good and I continue to evolve as a person, learning and growing. I take this approach about everything I pursue in life, I am certainly not perfect but I strive for it.

You are a human to me first not a seller or a buyer, perhaps it has something to do with the fact that I am a Zen Buddhist or come from an arts background? I strive for honesty in all things that I do-that is what I feel defines me. Perhaps that is why 95% of my business is from referrals, if a seller really wanted to be involved so be it. That said I would voice an opinion on the matter so the pros and cons could be discussed.

All that said I really do love what I do and like you I enjoy interacting with customers-you get to meet an interesting lot working in NYC. I got into this biz because of an elective RE class I took at City College and had no idea I would be doing it 17 years later. The lifestyle appealed to me I was a musician at the time my wife was an actress and came from a theatre family. I liked the fact that I could spend a lot of time with my young children, take them to school etc...Real Estate gave me these options. Ok this is getting off topic...lol.

Mr Burkhardt,
Have you forgotten that you called me a complete nutcase in another thread? That attack didn't do much to foster your chances for any type of business relationship with me. I choose to sell FSBO and am roundly attacked for it, but it is a free country, as far as I can tell, as long as you don't insult powerful business interests such as the real estate industry.

I am sorry to say that the role of a broker puts a person in a position to have to lie a lot about what they're selling. Some of it is lying through omission, the agent just doesn't know any facts about the unit or the building the unit is located in, other times it is lying by commission, they hide facts in order to make the deal go through.

People somehow want this level of deceit in their business relationships, agents function as some kind of oil to make the system more efficient. Facts function as sand that slows down the system. That's the way I see it.

Money is a driving force in everyone's life, to deny that is silly. If you rally did not care about money, you would work pro-bono to help out buyers. Hmm, maybe I will do that, or maybe I already do that with posting on this board. As Mark Twain said, "The lack of money is the root of all evil". It is how we get that money that is important, whether we do it honestly and fairly.

As for my bad experiences with real estate agents, I suppose it started twenty five years ago when I bought my first house. I took my agent's recommendation for a building inspector. Of course, he found no problems with the house but I had to spend $3000 a few years later to have the roof replaced. This was all part of that whole FRT plywood fiasco. I guess I learned something back then in terms of never trusting agents, hiring my own people to do inspections, and trying to get at the truth in these deals. Self-interest on the part of the agents overrides any concern for the buyer as a person or as an economic entity, in so many cases.

I never called you a "complete nut case" please find that thread...but I see you are still harboring resentment because I don't think much of your apartment and gave my reasoning. No need to take that so personally "let it flow then let it go....".

I don't agree with your ideas about money and it is silly to say just work for free-you see the world very black and white. I understand money is needed to function but no it is not a "driving force" in my life. And although I like "Tom Sawyer" I think Twain is off on this one. As it seems more correct to say the "drive for money is the root of all evil". Ask Madoff having money and the pursuit of it has not precluded him or many others from evil. Best of luck.

take it outside boys.

Thoses interested should take a read of Freakonomics, by Steven D. Levitt and Stephen J. Dubner, here is an adaption based on the realtor chapter.

http://www.wired.com/wired/archive/13.05/realestate.html

"So on the sale of your $300,000 house, her personal take of the $18,000 commission is $4,500. Still not bad, you say. But what if the house was worth more than $300,000? What if, with a little more effort and patience, she could have sold it for $310,000? After the commission, that puts an additional $9,400 in your pocket. Yet the agent's additional share - her personal 1.5 percent - is a mere $150. So maybe your incentives aren't aligned after all. Is the agent willing to put out all that extra time and energy for just $150?"

i have suggested that reading before on a few threads. Chapter 2. it is must read for anyone interested in the broker/no broker debate.

not forgetting the "analysis of the language used in real-estate ads"

http://freakonomicsbook.com/thebook/ch2.html

Fantastic!

Mr. Burkhardt,
I remember our conversation well and told you that you had launched an ad hominem attack. You wouldn't have respect for any property which you couldn't make a buck off of, let's be honest about that. It must be doubly irksome that a seller has the nerve to try to sell their own property without your help. I told you that I didn't like those apartments you were hawking on 29th street, in that monstrosity of a building that destroys the little church, in response to your attacks on my property.

Ah, you will not get any money if you do not drive for it. Twain is spot on. I mentioned working for free in order to counter your disingenuous argument that money is not a driving force in your life. I know people for whom money is truly not a driving force in their lives, and, you know what, they usually don't have much money.

I have started a new discussion:

http://www.streeteasy.com/nyc/talk/discussion/8383-streeteasy-smackdown-407pas-vs-brkhardt

407 all real estate stuff aside, I think you are out there. Best.

That Freakonomics excerpt ignores the fact that sellers set prices, not agents. When you tell the seller that he can probably get $10K more if he holds out for three months -- and he looks at the certainty of a bird in the hand vs. the uncertainty of waiting for one that might not materialize, plus the carrying costs on a $300K property, which are probably around $7K for three months -- most of them will take the $300K bid on the table.

Some of them don't (which is why days on market are currently lengthening) but it's their call.

bmw -- I have been doing this for only a few years too, but my experiences are that the most successful agents in New York are either seller's agents (you may have heard the real estate adage "list to last") or neighborhood-focused. UrbanDigs will argue differently, but I don't see a strong model for pure buyer's agency in New York. Happy to discuss this more off the boards if you like.

ali r.
{downtown broker}

I will always use a RE broker from now on, simply to avoid having to talk to the seller's broker and their BS.

sniper,
Delete the tread, I didn't ask for a public showdown in my own thread. I have just heard enough from this guy and his arguments all the time. He asked for my bad experiences with real estate agents and I gave him one. No comment on that post. Ha ha. I don't expect the guy to say anything supportive of someone who is selling their own property. But, don't worry, money is not a driving force and he is trying to help out everybody. Whatever.

One of my favorite quotes about money is from Mother Courage, the play by Berthold Brecht, when MOther Courage is informed that they are holding her son for ransom:

"Thanks be to God they're corruptible. They're not wolves, they're human and after money. God is merciful, and men are bribable, that's how His will is done on earth as it is in Heaven. Corruption is our only hope. As long as there's corruption, there'll be merciful judges and even the innocent may get off."

"I will always use a RE broker from now on, simply to avoid having to talk to the seller's broker and their BS."

212CondoDude,
Too bad you don't get more opportunity to talk to the actual sellers. Maybe you would not come away with the impression that you are being fed BS. My buyers this weekend put me through twenty questions with regards to my unit, the building, finances, the board, and everything else. I tried to answer as honestly and completely as possible, given everything I know. I'm not trying to pull the wool over anybody's eyes and I would like to sell to someone who is going to be happy in the apartment.

Although naturally it does move me to see all the negative rhetoric here about agents in general, at the same time, I see it as a learning experience. From it, I learned what people think and the reason why they feel the way they do. Not every person feels the same, I know people have reservations about dealing with brokers for various reasons, some personal, some because of reputation, some because of facts, and some simply because of socialization. Regardless, like anything else out there, I think that it could be potentially assumed that every profession has individuals with various levels of competency. The real estate law of agency does discuss in detail what the duties are of each type of agent, given the context of the relationship. I know that the best place to be is to be a seller's agent, it is easier anyway, you have a product, you set up the prop, but ultimately clients come to you, and you have if you will a steady stream of business. For an agent like myself, it is against all odds, not only do customers do not come to you, you have to share with them what your services entail. I can go on and on about this topic, but I rather not, ultimately I know that when I represent a buyer, it becomes my entire life, knowing and finding out every shred of detail that I can, and negotiating a deal creatively in all aspects of the deal, not just taking off a few bucks off asking like a bad hair cut. I am also not out to destroy sellers, but things need to be fair. People are very human to me, and so far, with all the work, effort and education, it is not been about the $$$ it has been about finding something to do in which I find overall reward. I think that the logistics and overall structure of real estate business models could be reviewed ..

I've argued both sides of this question over the years, and my view has evolved from black and white to murky grey.

I started out as a "Buyers' brokers are a fraud" absolutist, essentially because the Freakonomics case is so compelling on its face. The interests of a buyer and her agent are glaringly misaligned; any defense of buyers' brokers that denies this obvious fact is unlikely to persuade anyone armed with a rudimentary, intuitive understanding of game theory, or of human nature.

And there's the problem. The defense almost ALWAYS denies the obvious fact of misalignment. Arguments for using an agent on the buy side generally rely on two central points:
1) The agent will work for the buyer's interest because professional ethics require it.
2) It's free.

The first point is impossible to prove or disprove; ethics clash with self-interest in every profession (hence the need for professional ethics); self-interest often wins. In a business where very few clients transact more than a few times in their lives, the temptation - conscious or otherwise - to steer a customer into a non-optimal purchase cannot be dismissed. Might a broker cost herself referrals by succumbing to this tempation? Perhaps, but buyers tend to justify their purchases after the fact. Even many who are plagued by buyer's remorse will convince themselves that the decision made sense at the time, and that the agent's advice was therefore sound. An agent who counsels caution can wind up with negative word of mouth too, and no commission to show for it. In sum - and this is just my view - the "professional ethics" case doesn't carry much logical force.

The second point - that the service is free - has some truth to it, but is usually invoked by brokers in such a sweeping and disingenuous way that it winds up being a lie. The grain of truth is that a 3% commission for the buyer's broker gets baked into many transactions whether such a broker is in the deal or not. Pulling that 3% out of the deal is a non-trivial task for the buyer, and she generally won't pocket more than a portion of the savings even if she succeeds.

The industry has placed many obstacles between the buyer and her goal of saving half of the 6% commission. Most of these barriers have been discussed on this thread and others. The result is that a buyer who chooses a fee-for-service approach runs the risk of paying twice for those services - once to the trusted consultant(s), and a second time to whoever takes a piece of the final commission, assuming it's something above 3%. Meanwhile, the pure DIYer may do a lot of work and ultimately be disappointed by the savings.

I don't know where that leaves the average buyer, but I do think the right answer is likely more complex than either "Use a broker - it's free!" or "Don't use a broker - they're all frauds!"

Sorr, point one should read:
1) The agent will work for the buyer's interests because professional ethics and long-term self-interest require it.

good post west81

Thanks for the post West81st. You raise many good points. Sure, the truth is somewhere in the middle but I have to find it in there.

I think the real estate industry has put so many obstacles between the buyer and the seller that I am amazed that deals get done at all. I like it when a seller's broker sneers at me when I show up without an agent. This system the industry have concocted seems to rely on brokers talking to brokers, ad infinitum. The sellers and the buyers are often left out of the conversation and come away feeling ill-used.

they only come away feeling "ill-used" or uninvolved in the process if that is how THEY want it to be. buyers/sellers who want to be very involved get VERY INVOLVED. if at the end of the whole process they feel like they weren't allowed to participate then they only have themselves to blame. i am sure there are plenty of brokers on here who could tell you stories about clients that were "a real pain in the ass." to you and i 407, "pain in the ass" would really mean someone who is very involved and requires them to do more work. everyone has their own desire for level of involvement. nothing against the brokers here either. nobody wants someone watching over their should every second they are doing their job but in some cases this is how the client will be.

Hey sniper.
Even if a seller want to get involved, he is blocked from talking directly to the buyer. If the buyer wants to ask a question of the seller, he is blocked in a similar way. This is a classic divide and conquer technique: http://en.wikipedia.org/wiki/Divide_and_rule In this way, the brokers control the game and not the buyers or the sellers. Things get even worse once the lawyers are introduced into the game.

i see your point but i have had a different experience.

Aren't you selling FSBO, sniper, or have I mixed you up with somebody else? ;-)

There is absolutely no reason to use a buy side broker in this economy. When the economy was booming, a buy side broker could sometimes find you "quite listings", which are basically places that arent officially on the market. These days however, thats totally pointless as units that have sat for a while can be had for a much better price. The only people who would use a buy side broker today are as follows:

1) People from out of town who have no idea what they are doing
2) People with too much money to care about taking a few minutes and doing an internet search (on a site such as this)
3) Very old people who are scared to use a computer and just like doing things "the way it used to be"
4) A sucker who listened to some brokers BS about how they would get a better price by going through him

you do not have me confused. wasn't it the great thinker Kierkegaard who said:

Once you label me you negate me

Seller by day, buyer by night. I wear many hats and do not subscribe to labels.

bandito:

A bit confused. As a buyer, by not using a broker, I am just simply saying that it is ok for me to give six percent of the purchase price to a person who is 100% guearanteed to be working against me in the transaction. At a minumum, if I bring a broker with me, price should be the same. And maybe, just maybe, on a relative value basis, if I am stuck between a couple of apts I could get some other advice on why one may prove a better purchase than the other. I think as a buyer, I am indifferent if a listing agent gets 6%, or listing agent splits it 3% for list and 3% for one I drag along.

sniper,
No, no, I just meant that you were not dealing with the system because you are selling FSBO, without a listing agent. I don't know if you are direct to seller, and I don't need to know, but you have already cut out half of the agents. Of course, I am also both buyer and seller.

patient09,
But as other have mentioned, you will probably have a better chance of bending the seller to your price if there is only one agent in the deal and not two.

but the agents hate for you to think like that, they really hate it.

i was simply referring to my ability to get into contact with the actual owners even when looking at properties that a broker has shown me and is being represented by a seller's broker. i am not talking about cutting them out but merely contacting the owner for more details or letting them know who i am personally not just to be known as "the purchaser."

Interesting, so you have managed to make contact with the actual owner, even when the seller is being represented by an agent? I bet that drives the seller's agent straight up a wall. Maybe I will try that. How did the seller respond to your communications? Were they open or hostile? I assume this is after a price has been agreed upon.

I heard a story about two guys who were involved in a legal dispute. The hourly charges kept going up and up with no agreement in sight. Finally, one guy called the other guy and asked him to go out for a beer. Over a beer, the two parties resolved their disagreement. Once the lawyers found out what had happened, they were livid.

One of my tenants was an Oxford-educated law professor who had dropped out of the practice of law because his firm would not let him bring cases to conclusion. He found himself negotiating agreements between parties and then having to make them swear that they would not reveal that he was responsible for the agreement. If his partners found out that he was solving cases, they would fire him or reprimand him, because he was hurting the firm's billable hours.

this has not been after a price is agreed upon. this has been for me to let the seller know of my interest in the home and try to personalize the relationship. when i have done this i have let my agent know that i was going to do it. i was also clear in expressing to the owner that the intention was not to shut out the agents (although the thought definitely crossed their mind after my contact).

to answer your other question, reaction has been excellent. if i was a seller and got a letter from a buyer telling me how much they loved my home and wanted to live there and create anew all the memories that they did with their family, i would be pretty flattered and want to speak with that individual.

Seriously I went into contract on a new construction (I know. big mistake) and dealt directly with the brokers in the sales office. I had a RE lawyer from the beginning too.

I would 100000% go back and bring a buy broker to the table... just so they would deal with the broker and the A-holes in the sales office. I had to constantly email the brokers to find out about the project progress.. and literally BEG for an ESTIMATE of closing on the bldg.

If I had used a buy side broker I could have asked them to find out the info for me and they would have gone through the hassle of dealing with the sales office and other broker. That is where brokers deserve their commission. dealing with the crap you don't want to.

I thought I could get a better deal by going without a broker and got burned instead.

212condodude yey!!! :) I hear you! also some liability - have someone else take some of that

212CondoDude,
You post a good counter example and a reason for you a person to use a buyer's agent. My circumstances are different as I would never buy new construction in this city.

212CondoDude,

The problem with your theory is that instead of you begging the sales broker, you would constantly be all over your own broker for that info. Everytime you asked him or her for an update they would basically say "the sales office hasnt told me yet". I guarantee you would then think it was YOUR broker who was the issue, because without seeing first hand what the real issue was (the sales agent) you would have no idea.

UESBandit... you are right to say that could happen..but I'd still rather talk to someone who is NOT representing the seller.. ESPECIALLY in new developments where the brokers and the sales agents are all on crack thinking that their development is the best thing ever and can do no wrong.

Ah, New York, where it is not a matter of IF you will have real estate problems, just WHEN. One of my friends knows someone who signed up to buy new construction, with developer financing, and evidently the guy got some terrible deal rammed down his throat at closing. I am not sure of the exact details but it did not sound like fun.

Take the focus off the the 3%. It's a non-issue. I'm really thinking of the negotiation phase. I the buyer, in most cases, will not be directly connected to the seller. At least on agent(the sellers) will stand between me and the seller. I will have to negotiate via an intermediary. (I tell you, you tell them, they tell you, you tell me). If I use a broker we just expand the chain. I'm not against RE agents I'm just trying to understand why I'm bringing my own. Now to be fair if I was a sleepy disinterested rich lazy buyer I might want others to do the work but, this is one of the big time purchases of my life. I am preparing for the task. In my experiences, Luck is the residue of design. I actually expected to read about the experienced informative value of Agents. I'm agreeing to use an Agent...the sellers. I can't imagine anyone more motivated to sell. I can't imagine anyone who can influence the seller more. When you choose to use them, the buyer essencially becomes their employer. The seller pays...with the buyers money. That's not free! This way the buyer runs all parties...or so I think? The guy with the money holds all the honey, at least in this market.
Feel free to kick the daylights out of this argument.
From what I'm reading we are starting to value RE agents almost as little as educators!

falcogold1 ... maybe it depends on the type of purchase... in my opinion for Nnew development it's better to get a RE agent.. these new development marketing people are all so drunk on the kool aid flowing from the crooked faucets installed onto the scratched and ungrouted countertops that they don't listen or care what you have to say. To them you should be "honored" to get a sales contract on their bldg... and you shouldn't ask questions or bother them with any interaction once you have signed a contract. They're there to sell... not maintain the relationship.

If you had a broker at least there would be 2 of you pushing to get questions answered, closing dates estimated and planned, and items reconciled during the walkthrough etc.

In my opinion no matter how hard you're willing to work you can generally benefit from some backup.
Get the broker to do all the whining and dirty work for you... that's their job.. the good brokers earn their commissions by helping you throughout the process.. not just at offer time.

212,

I must say I disagree. After dropping $1m on an apartment, I would want to be very involved with whats going on. I would personally want to speak to the people who know when I will be able to move in to my new place. In fact, I would probably be calling them (and speaking to their management) everyday just so they know to take me seriously. I guess it all comes down to the kind of person you are (hands off or hands on). Most people consider purchasing a (potentially) multimillion dollar piece of property a big deal, and they dont want to leave little details such as "when is my place going to be ready" to some broker. Different strokes I guess!

I should clarify that I mean dropping $1M(plus), as many cost millions more than that.

UESBandit.. I see what you mean but I think you're misunderstanding me... I never said I didn't want to be involved.. I said a broker was good backup.... I've been pushing on my own to get answers and make this deal work... but I also have a job which I need to keep to be able to pay for this purchase... a broker can help in the sense that they can fill in the gaps..

I'm not saying to sit back and let them do the work for you... use them as part of your gameplan.

212,

Thats a fair enough statement, however based on what you are saying I would be very concerned about living in that building. Have you already signed documents and given them a payment? If not, I think this is a STRONG signal to get the hell out of there. As I am sure you have noticed, there are thousands of condos on the market now, and people are dying to sell them (at rates that keep dropping!). I personally would never live in that building after listening to your description of how difficult the people are. Would you mind giving all of us a neighborly 'heads up' about what building this is so we can all avoid looking there?

I'm already signed and committed.. going to close soon..

I would rather not say since my personal experience doesn't necessarily speak for the experiences of the rest of the building and the rest of the sales staff. I dealt with 1 of the brokers... not all.

Just stay clear of NEW CONSTRUCTION in the pre-construction phase. I'll buy new construction again... but only if I can see the finished unit and have a concrete expectation for closing.

And I'll use a broker ;-)

DUDE,
You are right. I'm really focused on 'used' property. The sellers I'm talking about are owners or the relatives of dead people. I'm looking for the debt/death/divorce sale. As I see it that's the only reason to sell in this market. I bought my first condo in 1986 and, I bit off more than I could chew. By 1990 I was 'sucking the tube'. The now very dead Linda Stein came to visit to see if she could sell. I will never forget her advice, "It's always a good market for realestate...if the property is priced appropriatly. My advice to you, boychick, is do what you have to do to hang on...times change." She was right! 7 year later it reached it's original asking price and then, for a time, it went through the roof. Amazing...the people we beat to death. Hey Linda...this puffs for you.....................