Hi Home Buyer,
If the seller is a For Sale By Owner, you may have a shot at negotiating a lower price. However, if they have a signed exclusive, they are contractually obligated to pay the agent's commission regardless, because of their work. If you go to an Open House advertised by the seller's agent, you technically become a 'direct' buyer. This may be a disadvantage in the long run, because the seller's agent may not take you as seriously as other buyers who have been pre-screened and qualified by their agent. Over 95% of all RE deals in NYC are done agent to agent. It can be in your best interest to work with a dedicated agent who can do all of the leg work for you on searching for your ideal property AND coordinating all showings etc.. When you are ready, your agent will do all the dirty work in negotiating your offer. If it is a coop, your agent will be responsible for the board package. This takes many many hours of time and if you have never prepared one before, you may run the risk of a board rejection!
Good luck in your search, and I hope this helps!

Hi Nyc10014,

I would like to answer your question using the example you provided.

Firstly, when the listing agent acts as a disclosed dual agent- which is what you are seeking, he is limited in advising you on the purchase price. So let us say, altering your example, that the condo is 110 and that you are the only one to provide an offer at 100,000. Let us further say that the owner accepts your offer. But the agent knew that he would of taken less, the owner would of accepted 95,000. The listing agent, acting as a dual agent, CANNOT tell you this- that would be a violation of his fiduciary duty to the owner.

Secondly, if the owner is offering 5% and the commission is the same for dual agency, then the owner is paying the same commission. Cooperating agents split the 5% being offered, that is, 2.5 to listing agent and 2.5 to buyers agent. Or however, the split is set. So, working with the listing agent, if the commission is the same for dual agency, doesnt save the owner anything.

Best

Artyom and Natasha
Rogov Team
(908)216-5066
(908) 839-5995
Remax Central
rogovteam@gmail.com

I think you're getting confused about the role of the seller's broker. They are supposed to present every offer to the seller because it's their duty to act in the best interest of the seller. The actual seller may choose to accept your offer over another at their discretion but it won't be because of the broker commission. You probably have a better chance of negotiating with a professional working on your behalf over somebody without a buyer's broker.

Using your scenario, you offer $100,000, the seller gets $95,000 in their pocket. The buyer offering $105,000 is putting $99,750 in their pocket (not counting transfer fees or flip tax of course). Now, which would you choose if you were them? I think you are looking at this the wrong way.

Thank you for the answers thus far. Let me structure the question this way: hypothetically speaking, let's say there are only 2 qualified and interested buyers in a home with an asking price of $110,000 and broker commission of 5%. I am one of the interested buyers and do not have a broker. My final offer is $100,000. The other interested party does have a buyer's broker and has a final offer of $105,000. Both potential buyers are otherwise identically qualified/compatible. Wouldn't the seller's broker work harder to sell me the home than the other buyer? thanks very much.

No.

There is no money going to the broker that can be transferred to you. The seller is going to pay a commission to a broker based on the sale price of the apartment .

The seller's agent is going to be working to help sell the home at the best profit margin for the seller. It's not their job to help you buy. They are trying to sell you an apartment at the highest price possible.

The buyer's broker would be your professional representative to help you negotiate and get a lower price if possible. You don't have to work with me but I would recommend you find a buyers broker to help you save money and find the best apartment overall.

My answer will most likely be unpopular by those who feel they're getting a special deal by going directly to the seller's broker but it's true. You'll be able to see more apartments working with a buyer's broker and I feel we save our clients money and time.

The sellerr's broker can reduce their commission and give you some of the money if they decide to act in your interest. But they are the seller's broker and working to get the best price for the seller so I doubt you'll be able to get them to turn on their fiduciary duties to the owner for you. If you're looking to get more of a discount, they'll probably look for a more reasonable buyer.

Generally, I have found that the majority of deals have 2 agents, a listing agent and a selling agent. I see this on the HUD1 at closing, so it is not something I am just making up. Whether the selling agent (the one who brought you in) is a buyer's broker or not is irrelevant. If you want to pay the buyer's broker over and above the agreed upon price, that is up to you. You can potentially get a better deal if you deal directly with the listing agent, because they are the only ones on the deal, so they could have more room to move if a deal needs to be done.

Actually the question is if a better price can be negotiated if a buyer's broker is not used.

I assume what you are doing is going to open houses, or calling the listing broker who appears on a listing that you see on-line. What you are doing by that is limiting yourself and doing more leg-work than if you would have one who can do this for you. If you get yourself a good agent, they will get a sense from you of what your priorities are, and what type of apartments you might like. Often apartments (and houses) look different on-line than they do in real life. I am sure that you have seen many apartments that have the things that you love, but also the things you hate. If you choose one broker to look for you, they will know to rule out the things that you hate, so that you are not wasting your time seeing many more units than you need to. Is there a possibility that you will save a little, yes, but probably only a little. The seller has a bottom line that they want in their pocket. Any broker who wants to make a deal, will make the deal happen, whether they are selling it on their own, or splitting the commission. Of course selling their own listing is a home run, but that doesn't mean that they are willing to give up any of it.
If you are planning on buying a co-op, that is another reason to have your own agent. They will also weed out the units that are in building that may have certain guidelines that you may not fit into. That is nothing that you see when you look on your own.
All that being said, if you need financing for the perfect apartment, once you find it, please feel free to give me a call at 516-972-1687.

Robin Silverberg
Senior Loan Officer
Preferred Empire Mortgage