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May 31, 2007
Buyer's Brokers
A friend is looking to buy a place in Brooklyn and is wondering what the default rule is on buyer's brokers. Does the buyer generally pay the 3%, in addition to the sales price, or does the seller take 6% out of the sales price and divvy it up amongst the brokers? She is getting contradictory advice from different people.
Thanks much.
Comments
Tell your friend to get online every Thursday & Friday, check all the Brooklyn real estate listings and come up with 4 to 5 open houses to see every Sunday. Tell her to go see 1st hand other areas of Brooklyn that she doesn't think she wants to live in. Be open minded and do your own homework. That's how you find a place you will love. Then make sure you have a fantastic real estate lawyer who will represent you in the purchase. My understanding is that the whole fee thing is not standardized. Who pays what can depend on who you are dealing with.
Posted by: tag482 at May 31, 2007 10:23 AM
The buyer shouldn't be paying extra. Seller pays commision. The seller's broker should be co-broking (splitting their 6% with buyer's broker, no?)
10:23's exactly right. Tell your friend to do the legwork without a buyer's broker. It's critical in gauging price and it's fun to explore the houses and the 'hoods. I'd add that she should see places above and below her price range as well - just as a comparison.
Posted by: John at May 31, 2007 10:37 AM
if either seller or buyer has a broker their fee is paid by the seller. but if you friend doesn't know this yet she will probably want to ignore the good advice from tag482 and end up working with a broker, anyway, since she seems unlikely to be do basic research on the internet, etc.
Posted by: Anonymous at May 31, 2007 10:39 AM
Tell your friend that especially in Brooklyn, having a buyer's broker isn't a lot of help -- there is no Multiple Listing Service (MLS), and many of the small agencies do not co-broke. As such, tag482 is right on the money -- do the legwork yourself.
Posted by: Raine at May 31, 2007 1:16 PM
I'll go one step further. Unless you hrie the broker yourself, and sign a contract to pay a commission to that broker, which would have no bearing on the fee the seller pays at closing, there would be no broker who is the buyer's broker. Your out of town friend should not confuse a co-broker situation with a true buyer's broker situation. Broker who shows the buyer the property has no real loyalty to the buyer, except to extent interests are aligned in getting the deal done with that buyer rather than a buyer who came through another broker. Your friend should simply adjust to the ways of Brooklyn and disabuse herself of the notion that she will have her own broker in this situation. All the advice above is good, as well. And, of course, don't hire anyone the broker recommends -- lawyer, inspector, etc. Get good recs and hrie your own. Those people will protect your friend's interests.
Posted by: Anonymous at May 31, 2007 2:49 PM
Do you think Brooklyn brokers will ever wake up and do business like the rest of the country? I've bought homes in and outside of the city and the one stop shopping with an MLS buyer's agent is just such a beautiful thing. It's a full time job looking for a house in Bklyn.
Posted by: Anonymous at May 31, 2007 3:21 PM
There are no buyers brokers in New York. I thought this was common knowledge.
Posted by: Anonymous at May 31, 2007 7:54 PM
There certainly are outside of the 5 boros.
Posted by: Anonymous at May 31, 2007 9:27 PM
Sorry I meant Brooklyn New York
Posted by: Anonymous at May 31, 2007 9:42 PM
its misinformation that there are no buyers brokers in nyc. of course a broker will represent you if you pay them as a buyer. that will ensure they are working for you interests. just because it isnt common doesnt mean it cant be done. or you could hire a consultant such as housebywe.
Posted by: anon at June 1, 2007 12:00 PM
Of course there are buyer brokers in New York. And here's a news flash to people who want to sell their house: DO NOT use a real-estate firm that refuses to co-broke! Why on earth would you do that? If you do, you will be eliminating ANY buyer that has opted for a buyer broker. Contrary to what some have posted here, they DO exist, and they can be very helpful--they know the market, they know the neighborhoods, they can serve as a good sounding board--and they deserve to be paid for their services. I'm with you, Anon 3:21: Crooklyn real-estate brokers need to wake up and do business the way every other market in the country does--that is, with the MLS, with buyer brokers, and with the willingness to co-broke. Buyers should not have to pay a fee to be represented. Everywhere else in the world, that representative splits the commish with the selling broker. And these days, they're more likely to be splitting 5% than 6.
Posted by: Bob999 at June 1, 2007 1:03 PM
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