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October 23, 2009
Using a Buyers Agent?
Do you think using a buyers agent is a bad idea? Are sellers agents less willing to split commissions? Will it reduce the chances of getting a bid accepted? We're new to all this.
Comments
It's neither a good nor a bad idea.
If you think that a buyer broker will get you what you need in a timely manner at the price you want, hire one.
Having a buyer-broker should have no effect on the chances of a bid getting accepted. In fact, if the buyer-broker is doing his/her job they're going to make sure that your bid is accepted.
Buyer-brokers are more common on commercial transactions and you may not need one. However, a buyer-broker could be very helpful if you're moving out of town to an unfamiliar place.
Ed Kopel Architects
Posted by: edkopel at October 23, 2009 9:09 AM
I think they are great - I used one once (10 years ago) when I was looking in Westchester. I don't really see a downside. They cost you nothing (they get paid by seller) and they help you navigate the search and broeker the deal. Ours had us go look at a place that we would have never considered on paper - he insisted we at least look --- we ended up buying it. The best part is that they aren't representing any sellers so they have no vested interest. Seems like regular brokers are suspect...naturally they make more money if they show you spaces they represent PLUS to make more commission they would want to sell for the highest price they can. How can you trust them?
Posted by: clintonhillgirl at October 23, 2009 10:17 AM
CHgirl I see it the opposite way. the buyer broker is also getting a percentage of the selling price, right? So they want to see you pay as much as possible. And they have the incentive to tell you all of the same lies the seller broker tells you. It can really deceive buyers, who tend to trust that the buyer broker is working for them. You really end up with two seller brokers -- but one is being used to verify the other one's lies. I had a terrible experience with this.
One more thing to consider: suppose a seller broker gets two equal bids, one has a buyer broker and the other does not. Which one do you think they promote to the seller? I think they promote the one where they don't have to split the commission. You lose in a tie.
Everything for sale is visible on the internet - buyer brokers are not adding any value and they certainly are not helping you get the best deal.
Posted by: joe_the_bummer at October 23, 2009 11:05 AM
JTB is correct on many accounts though fails to point out that brokers generally have faster accessto new listings, and a buyers broker can get you in to see a place before its publicly listed on the internet. I would also say that seller brokers have limited contracts, so their primary goal is to sell the place - true ideally at the highest price, but getting the sale done is more important. I know many seller borkers who will try to convince a seller to accept a low offer, just to get the place sold. And when a buyers broker is in the picture, there are often side discussions amongst the brokers to try to get a deal done without conspiring to get the highest price (which is illegal).
Posted by: saminthehood at October 23, 2009 11:44 AM
I completely disagree -- every buyer should have someone on his/her side. The seller's broker's undivided loyalty is to the seller. Buyer's brokers also bring a wealth of experience with previous transactions and can offer all kinds of advice -- from what to look for in evaluating different buildings, co-ops vs. condos, referrals to mortgage brokers, lawyers, inspectors, movers, and more.
What you can't see on the internet, for example, is that the board of such-and-such co-op doesn't like board packages submitted in binders, or doesn't meet during the month of August; or the people who bought the townhouse next to the one you're looking at are getting divorced and will need to sell at a good price in a few months, etc.
And in terms of direct vs. co-broke deals I will say that, as a broker, yes, a direct deal is nice, but it's also nice to do a co-broke so that you don't have to deal with the buyer and the seller, both of whom may be high maintenance. Most brokers I work with welcome co-brokes and those who don't generally don't have the best properties anyway.
And any broker who puts his/her own interests ahead of his seller's is violating his contract with that seller. The broker should promote the offer that is best for the seller, period -- and in the case of equivalent offers that means considering the two buyers' financial positions, downpayment, contingencies, mortgage pre-approval, and liklihood to be approved by the board. Believe me, no broker wants to push a less-than-qualified buyer only to have the deal fall apart and send everyone back to square one.
In the end, internet aside, there is no match for the human element. Wouldn't it be nice to have someone to whom you could ask all your questions and whose job is to answer them for you, while providing you with market intelligence and ideas you may not have considered -- for free? That is the kind of buyer's broker you want to work with.
Posted by: babs at October 23, 2009 11:49 AM
babs did you copy that off of Corcoran sales literature? What world do you live in? "every buyer should have someone on his/her side" -- right, but the point is, this is New York, and the person you think is at your side will screw you. You are NOT on our side. Everyone knows not to trust you for "brokers, lawyers, inspectors"
Any of the special information about "board packages in binders" etc is going to be known by the seller broker.
OK, "any broker who puts his/her own interests ahead of his seller's is violating his contract with that seller" -- you're saying that doesn't happen? what's your point?
Would you really have us believe that a seller broker wants to give up 3% of his commission so he doesn't have to "deal with" the buyer? Do you truly think we were born yesterday?
If you brokers could only learn to lay down a thinner layer of bullshit you would be so much more successful.
That disingenuous crap really pisses me off. seriously I am pissed off now. We're trying to have an honest conversation without your broker crap.
Posted by: joe_the_bummer at October 23, 2009 12:03 PM
Are you paying the buyer's broker yourself? Otherwise they work for the seller. I have just found most of them get in the way. You can view the same MLS properties they can.
Posted by: mopar at October 23, 2009 12:05 PM
OP here. Thanks for the input. We have been working with a buyers agent and had 3 different places slip through our fingers, so we're wondering if it's us or our agent or what. I thought this was supposed to be a buyer's market?
I did just hear that existing home sales have spiked in the past month, so maybe it's just more competitive right now.
Posted by: noodlemanias at October 23, 2009 12:07 PM
of course I meant "half of his commission" in my previous post. let's please only consider opinions of non-brokers.
Posted by: joe_the_bummer at October 23, 2009 12:11 PM
To combine two posts...
"Every buyer should have someone on his/her side.
The seller's broker's undivided loyalty is to the seller.
Buyer's brokers also bring a wealth of experience with previous transactions and can offer all kinds of advice"....
....."the buyers broker is also getting a percentage of the selling price"
jus sayn
Posted by: jasetheace at October 23, 2009 12:35 PM
Sorry, joe, I don't work for Corcoran, so I'm not familiar with their sales pitch when working with buyers. And I'm not saying there aren't less-than-honest brokers out there; I'm just saying that a good one won't betray his/her client. And, yes, at times I would rather give up half of my commission for a smoother, speedier closing so that I can devote my time to other, more lucrative, areas. And I'm successful enough as it is, thanks, so I don't think that most of my clients and customers feel I'm conning them in any way.
Unless Mr. Brownstoner wants to restrict posting here to non-brokers only you'll just have to deal with it, joe.
90% of the properties in brownstone Brooklyn aren't on the Brooklyn MLS, which is primarily in southern Brooklyn and is subscribed to only by smaller firms and those not even in Brooklyn.
But noodlemania, if you've lost three places, it's time to ask your agent (and yourself) why. Are your offers too low? Are your offers presented in their best light (meaning do your finances look as good as they should)? Do you have a good mortgage pre-approval? Are you putting a sufficient amount down?
As a seller, I would go with a lower offer from someone who had a higher downpayment and better mortgage pre-approval/pre-qual than a higher offer from a low down payment person, because the liklihood of closing is much higher.
This is not a buyers' market in the sense many people here would like to understand. It doesn't mean that you can submit lowball offers and have them embraced with open arms. Most selling prices out there now are already considerably lower than they would have been a year or two (or even three) ago, and I personally have seen several properties go for over ask. Again, your agent is the best person to counsel you on the state of the market -- and if you don't feel you're getting the information and attention you need either speak up or change agents. Good luck to you in anay case.
Posted by: babs at October 23, 2009 12:36 PM
And yes, jace, the fact that the seller is paying the entire commission may seem counter-intuitive for a buyers' broker acting in the buyer's best interests, but most brokers I know do a good job of keeping it that way. And isn't it in the buyers' best interests to get the property they want as smoothly and at as fair a price as possible?
Posted by: babs at October 23, 2009 12:40 PM
I thing Babs said it best, "joe the bummer" is just that a "bummer" what would you expect froma guy who uses MLS for his Brooklyn listings search?!?
Posted by: IrieMan at October 23, 2009 1:38 PM
Irieman you have me confused with mopar. MLS is not really relevant, but all the listings brownstoner people care about are visible on the NY Times or on the seller brokers' websites.
babs, I'm sure you're honest but the reputation of your industry is in shambles. I've had brokers lie to my face quite often.
OP -- whether or not you use a buyer broker, verify ALL of the information (school districts, transportation, % of building sold, etc) and don't take any referrals.
Posted by: joe_the_bummer at October 23, 2009 2:02 PM
I agree with Babs and IrieMan...
1. I think we're all adults here and can draw our own conclusions about people's posts. Frankly, I'd rather have as much information as possible from a variety of sources and make my own judgments about credibility, usefulness etc... than have someone appoint themselves gatekeeper.
2. Joe: Let's keep it civil.
Posted by: SJ at October 23, 2009 2:04 PM
I think it really depends on how comfortable you are with negotiating real estate. If you're new at it or just uncomfortable, then maybe it makes sense. But on the other hand, since the seller is paying out broker fees, there may be less $$$ to negotiate w/ you. I would think that the sellers are ultimately looking to maximize what they put in their pockets...and it may not matter whether its as a buyer credit or a broker fee.
Posted by: brwnstngrl at October 23, 2009 2:09 PM
Guys, you had an OP ask a fair question, and you had someone come on and give a broker's sales pitch as an answer, without disclosing that she was a broker. It deserved to be called out.
I don't care if you all use Bernie Madoff as your buyer broker. I call BS when I see it. Good luck.
Posted by: joe_the_bummer at October 23, 2009 2:18 PM
That was not a sales pitch and I have never hidden the fact that I am a broker -- as anyone who's ever read my posts can attest. No BS involved and I am currently working with enough buyers not to be trolling here for business.
Posted by: babs at October 23, 2009 3:32 PM
OP (yeah you know me) here.
Thanks so much for the lively and varied responses. All of of our offers were within 10% of asking and one was over asking. And we've got 15-20% down payment, our credit is excellent, etc. I was just wondering if using a buyers agent was a potential negative factor that we hadn't considered in the whole process.
One thing I will say, is no matter how crazy NYC and Brooklyn real estate is...one thing works: this forum! Thanks!
Posted by: noodlemanias at October 23, 2009 3:33 PM
My first time buying I felt that there was really no such thing as a true buyer's broker here in NY. I could never really tell how honest and upfront an agent was, and they always seemed to have THEIR best interests at heart--and that was quite often in conflict with MY best interests...
The second time I bought (here in BK), I was living out of state and was SO happy to have gotten a recommendation here on Brownstoner to call Erin at HouseByWe.com. She and her partner offer buyer's (and seller's--I think they have a few listings of their own) broker services, as well as home renovation management. Basically, they provided me with true buyer's broker services--like you might find in a state that legally requires them (like CA), and very unlike here. She worked her ass off for us and found us the perfect, perfect home! It was really helpful to have someone who felt truly "on our side" take us through the whole bidding, contract, closing process. But most of all, it saved me from devoting every spare second of my life searching the market, meeting with brokers at every real estate house, etc.
This is all to say, I wouldn't recommend using a "buyer's broker" if it's someone from one of the big real estate houses... but someone like HouseByWe I wholeheartedly WOULD recommend.
BTW, the comment that seller's might be more reluctant to sell to you since they pay your broker doesn't make sense unless it's a FSBO. Otherwise, I don't see why the seller should give two craps--they pay their 5 or 6% to their broker, who must split it with any buyer's broker who brings the deal.
Posted by: tanner at October 23, 2009 3:42 PM
I am a broker, and tanner I think it's great that you had such a wonderful experience with a small company but that doesn't mean that there aren't brokers that work for larger firms that provide that same level of service.
Also,in nyc unless you have a contract with and are paying a fee to your buyer's broker, they do not really represent you. That is not to say that they aren't trying to get you the best possible deal and looking out for your interests but the seller's broker can provide that same service. It really all depends on what your needs are. If you are a real estate junkie like many NYers and enjoy doing your own research and going to open houses, etc, you are probably better off on your own bc you will get a better deal without a broker. Most selling brokers agree to accept a lower commission if another broker is not involved in the transaction.
Posted by: rpnyc at October 23, 2009 9:55 PM
If 90 percent of listings are not on the MLS, isn't that another reason for a buyer to approach the seller's agent directly?
Posted by: mopar at October 23, 2009 10:06 PM
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