Do I Need a Broker?
Hi, I’m sure this question has been asked before, but I’m about to embark on our search for a new apartment and have heard different things about whether we need a broker as we look at listings. I feel like we can do it on our own. Am I wrong? In this market in particular,…
Hi,
I’m sure this question has been asked before, but I’m about to embark on our search for a new apartment and have heard different things about whether we need a broker as we look at listings. I feel like we can do it on our own. Am I wrong? In this market in particular, does anyone think a broker can be helpful?
Thanks for your advice!
so I say no, no broker.
We spent over two years shopping for a place before buying and did not use a broker. Yes we met brokers as we saw apartments, and if one called us about a place we didn’t know about, we signed in under their name. But I had to repeatedly tell a few to get lost who tried to barnacle on as “our” brokers.
If you’ve got the time and stamina, you will be in a better negotiating position than someone bringing a second broker to the deal. Maybe it won’t matter, but it could. I think that’s part of how we got our place at a great price. It all helps your offer, just like the size of your down payment, etc.
You do need to be looking all the time, figure a few hours a week online, plus time to look at places you like in person. The longer you look, the more you can tell from floorplans and photos what you need to know so it does become more efficient over time.
Some people don’t want to negotiate and that’s a valid concern. We used a broker to sell our apartment because I didn’t think I could handle that negotiation myself. I was glad we had one since we needed to manage several offers and all of them came through brokers who are a pain to deal with (see below).
But buying is less emotionally involved (or it was for me) and I could only see advantages of going it solo. For one thing, most NYC realtors are simply bananas. I say this in all fairness having friends who are in real estate, but most of them are.
Just don’t sign anything saying the broker represents you. They can show you listings till the cows come home.
I just sold my apartment FSBO and I didn’t want any brokers. The only time I allowed a broker to bring someone was because they insisted they had a specific client in mind who was perfect for the place – and it turned out they brought someone who had attended our open house the week before! Useless!
We wanted there to be good room for negotiation and with a big cut going to the broker, we wouldn’t have been able to make what we wanted on the place.
I disagree with Serpentor though – I am very glad we had an excellent mortgage broker for our purchase because when one bank didn’t appraise high enough, we were able to quickly and painlessly switch banks for a second appraisal and get it done. If we had only worked directly with that bank we would have been back to square one.
Agree on the good lawyer part though! Always need a good lawyer!
I’m assuming you’re buying in Brooklyn?
You can reach out to a broker (or two) but don’t assume they’re going to do all the legwork for you. Look at listings, follow streeteasy, follow up on places that look like what you think you want. Shell out for a property shark account and compare recent sale prices for yourself.
I have nothing against brokers, but fundamentally, they’re not there to represent your interests any more than a suit salesman is. They want to you to be happy with your purchase, sure, but they want you to buy the most expensive suit that they can sell you.
You don’t need a mortgage broker. If you’re putting 20% down and have halfway decent credit and an income history to support the mortgage you think you can pay, go straight to the bank. We actually paid a broker who was only coming up with rates above what Chase was offering us. We asked him to send our paperwork to Chase and he flat out refused. I had one year as a freelancer in my application so it was a biiiig stack of paper that we had to re-assemble because he wouldn’t send our paperwork to the loan officer who we found.
You do need a good lawyer.
If a seller’s broker is unwilling to co-broker a sale, you should really ask yourself what else will this person be unwilling to do. Will this broker give you access to the building for an engineer report? If you are a qualified buyer a serious broker wold be an idiot to let a deal walk out of the room because of greed.
You ARE about to spend a personal fortune on a business transaction and you want to end up with the best hand. I would walk away from a listing with a seller’s broker who was unwilling to split the commission because that person already has the upper hand in a negotiation. Ask yourself if you want to win the negotiation or lose it.
For the record, I’ve bought/sold several properties in Manhattan and Brooklyn this past decade and work with a buyer’s broker from Corcoran and we did make and offer and purchase from a so-called ‘neighborhood seller’s broker’. And it was a tremendous help because the Corcoran broker actually had to help the mom-and-pop stand properly fill out paperwork (due to their inexperience) and push the deal through.
There’s no point in worrying about what you can’t control. Start out by going to all the open houses you can. Only go out with brokers to see stuff you don’t see having open houses. If you then go to a C open house and have been shown stuff by a different C agent, it won’t mean you are barred from buying the place. Let the brokers work out who gets their cut.
Thanks for the advice! Brokelin, the scenario you described is exactly what I’m afraid of. If we, for instance, go to a Corcoran broker who starts working with us and taking us to all the listings they can co-broke with, wouldn’t that potentially put us at a disadvantage when making an offer compared to someone who walks in broker-less?
And I realize we would be working with all the different listing brokers-my question was more about working with a broker to take us around to listings (or at least those they have access to).
Your question doesn’t make total sense to me. This being NYC of no MLS, no one broker can show you everything. So going out with one broker will limit you to seeing listings only with offices that co-broke. Why would you do that?
Yes, you can go to open houses on your own, but not all properties have open houses, so you will need to call up and make appointments with agents to see them. Does it matter whether the agent supposedly represents you or the seller? Not really….in either case, they only get paid if you buy. In either case, the broker will tell you things you need to know to get the purchase done. In either case, you should trust only yourself, and be sceptical of inspectors and mortgage brokers recommended to you by brokers.
Why not work with a lot of brokers so you can see everything out there? I realize the broker market has changed a bit since I was looking in the 90’s, with the arrival in Brooklyn of some bigger brokers who co-broke, but some still list with smaller brokers who don’t co-broke, though I can’t for the life of me figure out why a seller would do that.
It is largely a matter of personal preference, whether you want to feel taken care of even though it is an illusion, and you’ve stated your preference. You will work with brokers anyway…you’ll see stuff by calling up about listings, and brokers will call you to show you more stuff, and you’ll go out to look with those you can stand spending time with.
Just be aware that the listing broker will often favor your offer if you walk in brokerless to an open house as they won’t have to split the fee, and this can be an edge in getting your offer accepted if the sellers are easily swayed by the broker. My broker tried to do this when I sold…but I could see right through her and took the offer best for me (I needed someone coop board would approve.)