Buyer's Agent or no Buyer's Agent?
I found a place on my own and then brought in a buyers broker. I’m pretty sure that the negotiations were kept high so that both agents got their target commissions – I regret that this didn’t occur to me ahead of time. However, my buyers broker was available for all my annoying questions and referred me to an awesome lawyer. If you do go with a buyers broker – assume that you’re paying extra for their services and hold your own when negotiating the purchase price.
whaaaaaaaat
in Skylight 12 years ago
9
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9 replies
blue1892 | 12 years ago
Hi All – looking for a bit of guidance here. We are first time home buyers looking for a 3 Family building in Brooklyn (Bed-Stuy) to purchase with an FHA 203K Loan. Already met with Barry Koven and are working this week to line up the down payment/cash funds needed so that we can start shopping. We are likely going to need a Seller’s Concession to be able to get what we are looking for and be able to close etc. In y’alls experience, is working with a Realtor recommended or should we just hunt for ourselves and have a Real Estate Lawyer on our team handle the closing etc.? In this market, in Brooklyn, for this type of loan WITH the need of a Seller’s Concession, does a R.E. Agent help or hurt the situation? Or does it not really matter? Any thoughts on this are much appreciated!
mousta | 12 years ago
The biggest problem with using an agent is that the seller’s agent would rather not split their commission. Now we all know that isn’t how it’s supposed to work but unfortunately it is how it works. The sellers agent will slyly (or sometimes not so slyly) try to close a deal that they are getting both ends of. For that reason alone I won’t ever use a buyer’s agent. As for the other issues a good attorney can help you navigate that once you negotiate the terms up front with the seller.
RBCG | 12 years ago
I don’t think it needs to be an either-or thing. We used a couple of “buyer’s brokers” (they’re not really buyer’s brokers in the sense that tyhey are in other states, since they are paid by the seller, but still…) and looked ourselves as well. Some of the brokers were helpful and showed us good properties (one even did a pretty good job negotiating for us, although we did not end up getting the property.)The house we ended up buying was not through a broker – we found it and did the negotiating ourselves. I think, with the market as tight as it is and properties as scarce as they are, you want to be exposed to as many potential properties as you can, broker or no broker. I don’t think using a broker helps or hurts (despite what the brokers themselves may say). The tough part will be the seller concession.
daveinbedstuy | 12 years ago
This isn’t really a market where you’re likely to get any seller’s concessions.
slopette | 12 years ago
We just purchased a property and used a buyer’s broker, and I would recommend it. Particularly as first timers, we had a lot of questions and our broker was as helpful as anyone could possibly be. He told us up front that if we looked at non-REBNY listings, he wouldn’t be able to negotiate directly for us (and also wouldn’t get paid), but that he’d continue helping us out as much as he could if it came to that. We did run into several non-REBNY listings that we were interested in, and had to pursue those directly ourselves — non-REBNY brokers usually won’t talk to buyer’s brokers. In the end we bought a REBNY property and I was very, very happy to have someone on our side in the negotiations. So I also agree that it doesn’t need to be an either/or, but in my case it least it was great to have the option and the sounding board.
nalusurf | 12 years ago
We just bought in the same area you are looking in, Bed-Stuy. This particular area is going crazy right now and there does not seem to be much available and what is available is going for above asking and often with “all cash” deals. With this scenario, and as DiBS points out, it will be very difficult to find a seller, I think, who will need to let a lone want to, make concessions. We found ours through a buyer’s broker and would not have found this house if it was not for our broker. In this area, I think you will have better luck with someone who is local, knows the area, and knows the their neighbors. We started out as a conventional loan but had to switch to an FHA loan midway through closing and MUCH to our own dismay. I don’t think the seller would have accepted our offer if it had been an FHA initially and it made the process more dificult. You can certainly look on your own and, in fact, you should walk the area, multiple times and during different days/hours, you are searching in. You want to make sure you feel comfortable and get a good vibe from the nabe. During these walks/visits, you may come across something not yet listed. As far as when to make it known regarding your mortgage type, it should be presented up front. This will save a lot of time wasting on both sides. Good luck!! Oh, and as pointed out above, a good attorney is a NECESSITY.
slopemope | 12 years ago
Buyers broker will know what you can really afford. If you put in a bid on a property below that number, they may, in an effort to earn a commission, become a horrible negotiator on your part. Buyers broker does not get paid if you are not a winner at auction, it is not in their best interest to get you the best price, but to win and pay the bills.
presidentst | 12 years ago
I would highly recommend not using a “buyers” broker if you know the market and don’t need handholding. As mentioned above, the sellers broker is much more motivated to push your offer to the seller if you don’t bring someone else to the table. I saw this first-hand when I was hunting for a brownstone last year.
BSDOD | 12 years ago
I think the max on a seller’s concession is 6%