Licensed Associate Broker
Douglas Elliman Real Estate
This being said, you can choose to work with the seller's agent or use your own buyer's agent, who will become your representative, will have to act in your best interests, as well as negotiate the best price possible on your behalf with the seller's agent. Services of the buyer's agent are not paid upfront - 2 agents share commission specified in the listing agreement with the seller at the closing.
In NYC most brokers are members of Real Estate Board of New York and they have universal co-broke requirement, meaning that they have to cooperate and co-broke with each other on all the listings and share commission.
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Let me use an example of a three thousand dollar difference in the sales price. This would usually equate to about $50 in the agent's hand after they split the commission with their broker - very little monetary incentive to risk their license and break the law.
But much more importantly - there is a world of difference between a client that was referred to me vs. someone that answered an ad or that I met at an open house. It's a warm lead vs. a cold lead. Not only does the referral already have a good impression of me, but the transaction is usually much more pleasant and less stressful overall. So agents are constantly trying to work so hard for their clients that their clients will feel comfortable telling their friends about the wonderful job their agent did for them. Referrals are the key to a growing business and even a less stressful business - for almost any business - not just real estate.
Who would refer an agent that tried to bump up the price so they could get $50 more in commission? A referral would be thousands more in commission. Earning a referral is a much bigger incentive.
One more example on the listing side - listing agents will often advise the seller to lower the sales price if they don't get much of a response on the house so that they will sell the house quicker. This is another example where a few more dollars in commission from a higher sales price is less important than serving the client's goals of actually selling the house.
You hit the nail on the head
One has to be suspect of agents who want to jump in atthe end to get a quick comirssion...this is not charity.
It is a business and we do it to make money. A highly experienced agent is always the best bet. I never present offers on units I did not show or find for the agent. Those that did the work, deserve to make the money.
I'm sure there are plenty of decent, conscientous agents out there, it seems like people are suggesting the buying agent puts aside self interest and fights for the buyer out of altruism. Does anyone really believe that?
Simple if it is 6% Cobroked (With 2 agents) and 5%direct on an $800,000...you just lost $8000 in negotiating room.
It is also ILLEGAL for an agent to suggest or guide you in a specific offering price, they can proivide comperable info BUT MAY NOT in any way tell you what to offer. The only exception is if they are YOUR buyers agent and you are paying them not the seller.
An agent representing both of you does just that..BOTH of you, they have a responsibility to treat you fairly as well as the owner, If I have multiple offers that are similar and have the potential to be negotiated into a deal I will ask an agents in my office to help me by dealing with one of them. This is called "Dual Agency With Designated Sales Associates" they often do this as a favor (I do the same for them when need be) until we have an accepted offer, then I step back in fully. Helps keep things clean.
Bringing in an agent who did not tell you about the property, did not guide you but just jumps in to get a piece can often hurt you as well. If the lisitng agent did their job marketing, showing and answering your questions, give them the chance to treat you right, ultimately the lawyer will protect you. If you really feel you need your own agent, then you should be using them from the start and they should guide you through the process of searchign and they should go with you to see the property so they can narrow it down for you.
Agents are required by law to represent their client's best interests above their own. If the agent at the open house is the listing agent, they are required to represent the best interest of the seller and get the highest price for the seller. Your buyer's agent, on the other hand, would be trying to get you the best (lowest) price possible.
Price is probably the biggest part of the conflict that several other folks have alluded to in the answers. There are many other aspects of an offer that can favor either the buyer or the seller - various contingencies, etc. Having your own (good) buyer's agent is important for all of these reasons.
And the best part is that most of the time the seller is paying the agent commissions - so this is a no brainer. You can get a buyer's agent to work for you and you don't even have to pay him/her 99% of the time! This is at least true for Northern VA!
When attending open houses, it is advisable to inform the agent that you are currently working with an agent. Additionally, we concur with the majority of other Pros, that the best situation to be in is to have an agent that is working with you individually. This will help you avoid the obvious "conflict of interests" that may materialize.
The Eckler Team
You know what would actually happen if you approached a sellers agent directly to work as a dual agent (assuming they are not prohibited from doing so - and are literally a dedicated sellers agent)?
They would LOVE to work with you! Why? They get double the commission. Of course no one in NYC is motivated by economic considerations, and all realtors are bound by a strict code of ethics ... :-) In most states, they can act as "dual agents" - unless they have somehow signed up as exclusive sellers agents for that property.
In NY - you need to use an attorney anyway (well you can pass on that but that's rare and not likely). So the agent doesn't do the contract - merely the "offer". Ok ... so let's see ... so you need to figure out what recent SOLD prices were for comparable properties. A lot of that is right here on-line. Or you can swing by some realtor office and do some quick searches on Trend - it's public data.
NY is like NJ - you'll have a 3-day attorney review anyway - so there's very little that a buyers agent will do to "protect you from yourself". Not in NY anyway.
Once you know a really good comparable for that home, and if the sellers agent will act (and they have to sign this - there's a special little document) as dual agent. You can now play both sides against the middle. Just stick to your guns with an offer that's a bit low but not overly so - and one that you will be happy with.
Resist raising beyond whatever your set limit is (a nice discount on that house). Say whatever makes sense at the time (oh gosh XYZ is outdated - I'll need to do ABC, etc). The agent will WANT you to get it. It's a LOT more money for her if you do.
Play the game - the agent will start really working for you when you are in the offer / counter stage and say, "Hey I found this other place down the street and their asking price is $10K less - I'm going to check it out this afternoon with that agent". Somehow this will translate into her saying to the seller "we're going to lose this buyer - it looks like the market is shifting again this week too - did you see this listing 2 blocks down? You may wish to consider if you'll accept 10K less".
Oh ... and then after the inspection ... you really put the stones to them and force them to fix XYZ or give you money in lieu of doing so ... and this is now after attorney review. They won't walk away from the deal and you'll squeeze them for another few grand. The agents are out of this loop entirely. In fact after attorney review - you'll likely be keeping your agent in the loop instead of the other way around.
Gosh ... am I really saying that the Agent will deliberately undercut their sellers interests for their own commission? Well - some will. Some of these will actually be aware that they are doing it :-)
Some of this is a bit tongue in cheek. I grew up in NY. :-)
Get a broker, he'll do the research, he'll show you comps, he'll advice you on an offer to submit, he'll qualify you, find you an attorney if you don't already have one, can tell you about the building and everything else. Pass that headache to someone who gets paid for it, and leave it off of your plate, it will be a smoother ride for you.
Btw, where are you buying?
Find out if the agent you met at the open house is also the listing agent. Sometimes other agents will fill-in for a listing agent. Ask the agent if they can represent you as a buyers agent, and see what they say. It is always better to have someone represent you given that it is one of the most expensive purchases you are likely to make in your life.
Best of luck!
That is were the buyer's agent focused on getting you a lower price and better termsthan what is being offered?
Your agent will see that all runs well once you enter into a contractual agreement and slove any issues that might arise during the entire course of the transaction. Since the home a predetermined commission that is built into it the sales agreement. why shouldn't you have your own agent representation.Paid by the seller.
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Hope to hear from you soon.
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