I want to buy a co-op in NYC but don't want to use a real estate agent. Is that a good idea?

Asked by Jinna D., New York, NY Tue Feb 22, 2011

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21
Mack McCoy, Agent, Seattle, WA
Tue Feb 22, 2011
If, by, "good idea," do you mean something that I would recommend or even do myself? Not on a bet.

First off, the economics aren't on my side - I'm still going to pay 96, 97, 98% or so for the home even if I get a commission reduction, which isn't a sure thing. Secondly, knowledgeable real estate agents have actual value, and probably nowhere as much as with buying NYC co-ops.

Number three, much of the value a real estate agent / broker has is in education; they should know more about the buildings than you can ever find out without living there, and they can guide you before you commit to a purchase.

Having lived in NYC for over thirty years, it's no place to be without a guide - whether in real estate, or as a tourist.

So, no, I wouldn't put it under the heading of, "Good Ideas."

All the best,
2 votes
John Sacktig, Agent, New Jersey, NJ
Tue Feb 22, 2011
Hi Confused,

To use or not to use a Realtor is your decision, my question is why you would not want to use a professional that knows the homes, area and has the information necessary to help you make a smart decision..

But, the bigger concern here is buying a "co-op". I would re-evaluate that first.
2 votes
RBman, Home Buyer, New York, NY
Wed Sep 21, 2016
If you're buying an apartment in NYC (condo or co-op: http://www.hauseit.com/co-op-vs-condo-nyc/) the answer will be the same.

You should definitely use a buyer agent whether it's a condo, townhouse or coop. Why? Because the sale price has already built in the total broker commission for buyers and sellers. The seller always pays the commission. If you choose to forgo representation as a buyer then you're just throwing it away!

The most important reason to have a buyer agent besides it being a source of free guidance and advice is to be able to get a broker commission rebate (http://www.hauseit.com/how-do-i-get-a-buyer-agent-rebate-in-nyc/)

Essentially the typical fixed seller fee of 6% is always split 50/50 between a buyer agent and a listing/seller agent. A rebate from your buyer agent is typically 1/3 of what he or she earns. That's usually 1% off your home purchase price!
1 vote
Carl Ben Wit…, Agent, Upper Montclair, NJ
Wed Mar 23, 2011
" I already own a co-op in Fort Lee, most properties in the NYC area are co-ops, if I reconsider a co-op purchase I would be eliminating about 80% of properties on the market. I want to omit a real estate agent so I can further negotiate price with the seller, as the seller will have to pay the commission." So you feel you have leverage with the seller's agent by not being represented? Seller pays X% no matter what. Where is the leverage? As Mack suggests, NYC is not the place to play a sharp game of saving by shaming the agent because he will not have to split with a buyer's agent.
1 vote
John Sacktig, Agent, New Jersey, NJ
Tue Feb 22, 2011
Understood as to your thought plan, I hear this all the time and is a common mistake that usually comes back to the buyer at some point and bites them.. Hidden costs... the kind of stuff you run into when you do not have an advocate in your corner. -or- at least the listing agent to facilitate the transaction. I usually get a phone call with something like..: hey.. you remember me ? I was going to buy a co-op and help the owner save the buyers agent commission.. Well that went real bad and I am back looking again, can you help me?
I laugh and say, sure I can.

The, I am going to save you the buyer’s agent commission thing does not work on a listed property. Commissions are negotiated prior t listing.. and there is not a well, If the listing agent sells it price it is this and if a buyer walks in on his own price. I’ll pay this... Not how it works.

As far as the co-op thing, being educated in co-ops and condo's, I would rather remove the 80% of the market and find a condo.

But of course you should do your due diligence and come up with the best situation for you!
1 vote
Tammie Hende…, , Westfield, NJ
Tue Feb 22, 2011
Confused,

I agree, not looking at a co-op will limit your choice of places.

Howeverr, if the property you are looking at is listed with an agent, you have to go through the agent to negotiate with the sellers, unlike a For Sale by Owner. SO it's in your best interest to have a Realtor representing YOU during the negotiations since you cannot negotiate directly with the seller on a LISTED property.

Eliminating the agent on your side doesn't change the fact that the commission has already been pre-determined by the listing agreement and is paid by the seller.
1 vote
Mary Petti, Agent, Edison, NJ
Tue Feb 22, 2011
Confused,


Minimally I would suggest you DO use a Realtor to help you wade through the paperwork involved in applying for ownership in the co-op. I know Manhattan has more co-ops than most areas, and as Marc said, most are going to be listed with a Realtor for the seller. You would be wise to have someone representing you on your side as well.
1 vote
Scottfarley1, Home Buyer, New York, NY
Tue Nov 15, 2016
I would highly recommend that you use a buyer's agent simply because it's a complex process, co-ops are a different animal and technically not even real estate, and because the advice/guidance is FREE!

The seller always pays a fixed fee. It's built into the sales price, so why would you throw away free representation during such a big life purchase?

Furthermore, your question tells me that you don't know what a buyer's broker commission rebate is. Basically, through a rebate platform like Hauseit, you can pair up with a local buyer's agent who will give you a split of their commission to help cover your closing costs (https://www.youtube.com/watch?v=58_UjYmG4hw) which can be quite substantial.
0 votes
Jeanne Feeni…, Agent, Basking Ridge, NJ
Sat Mar 26, 2011
Hi there, stay focused on finding the right property rather than trying to negotiate to your benefit the saved commission. In fact, if a property is listed, the seller cannot sell to you without paying commission to his own agent unless you are a named exclusion. It is not uncommon for a buyer to think they can negotiate commission differences to their favor - while the seller will think he can do the same. See the disconnect. Worry less about the commission and more about finding the right home - and to do that you will be well served by aligning yourself with a good agent. And that's just the search, then come the negotiations and getting to the closing table.

Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference:  http://www.feenick.com
0 votes
Carl Ben Wit…, Agent, Upper Montclair, NJ
Wed Mar 23, 2011
Most agents refuse to be used, don't worry. You would be ill advised to spend time contacting each co-op you might be interested in, or scanning the listings/classifieds and dealing with a listing agent for a co-op. But some people do it. The listing agent will know what type of owner would be acceptable, thus saving time. The first one you visit will likely want to keep you as a client and find one for you, so in that sense you cannot avoid dealing with an agent. If you happen to come across an owner selling on their own, think Bernie Madoff as a measure of risk. So, bottom line, why would you want to avoid an agent? Makes no sense.
0 votes
Annette Levi…, , New York, NY
Thu Feb 24, 2011
It would be a bad idea not to use a realtor in purchasing a co-op. Each co-op has different rules and regulations. The realtor guides you to the co-ops but best suit your needs. For example if you have a pet there are few co-ops that allow them. And when they do they often have rules about them (breeds of dogs and weight) Even if you wanted to read an offering plan (where the rules and regulations are) they do not become available to you until you sign a contract to purchase.
The other part of buying a co-op is getting accepted by the Board. A realtor knows what the Board is looking for so that you do not waste your time. My realtor went over my financial package with me to make sure I presented it correctly. My financial package to the co-op Board was more extensive then my mortgage application.
Remember the realtor is not costing you anything. Don't think that if you went directly to the seller you would get a lower price. Most sellers do not know how to price their home and most likely your mortgage appraisal will come in lower then the sells price.
0 votes
Mary Petti, Agent, Edison, NJ
Thu Feb 24, 2011
So confused,

did the answers help at all? hopefully they did. Let us know what you decided to do.
0 votes
Jay Nandlall, Agent, North Bergen, NJ
Tue Feb 22, 2011
Would not recommed this, agents have the experience to guide you in what may be your largest purchase ever. Agents do not cost you since the seller generally pays the commissions and they can give you comparisons of sold listings as well as get you the best value for your money.
0 votes
Jerry Barker, Agent, Atlantic City, NJ
Tue Feb 22, 2011
It's an awful idea. A home buyer should alway hire a Realor, it's FREE!!! Here is an asrticle that explains in detail two very important reasons to hire your own Realtor: http://www.suite101.com/content/two-reasons-home-buyers-shou…
Web Reference:  http://www.sjrates.com
0 votes
Mary Petti, Agent, Edison, NJ
Tue Feb 22, 2011
Not sure how it happened but the reply credited to Tammie Henderson was actually MY response.
0 votes
Marc Paolella, Agent, Succasunna, NJ
Tue Feb 22, 2011
By the way, even if you find a co-op listed for sale by owner, he wants to get the same price as everyone around him who used an agent. He won't sell to you for your lower offer. So if you end up paying fair market value, you will have paid the commission without even knowing it, and without ever receiving any of the service. The seller will simply get your commission dollars instead of your agent.

-Marc
0 votes
Anna M Brocco, Agent, Williston Park, NY
Tue Feb 22, 2011
The listing agent works on the seller's behalf and has a fiduciary duty to the seller, therefore not sure there will be any savings as the seller still has to pay his/her agent the agreed upon commission....again you decide...
0 votes
Jinna D., , New York, NY
Tue Feb 22, 2011
I already own a co-op in Fort Lee, most properties in the NYC area are co-ops, if I reconsider a co-op purchase I would be eliminating about 80% of properties on the market. I want to omit a real estate agent so I can further negotiate price with the seller, as the seller will have to pay the commission.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Tue Feb 22, 2011
To use an agent or not is your decision, however representation won't cost you anything as the commission is set by the seller and his/her agent, if two agents are involved the commission is shared--unless you have an agreement with your agent to pay above what the seller is already offering....
0 votes
Joshua Bai, Agent, GAITHERSBURG, MD
Tue Feb 22, 2011
After I read your question, I am Confused.
Yes, if you do know what is a co-op, and you know what you're doing. It's a good idea to save money and time.
But when you want to buy a co-op, it seems like you are confused by the estate type. In general, most people do not consider to buy a co-op. Let me know if you change your mind.

Joshua Bai

Weichert Realtors
Parsippany / Montville Office
1072 Route 46 West
Parsippany, NJ 07054
Cell: 973-908-2923
0 votes
Marc Paolella, Agent, Succasunna, NJ
Tue Feb 22, 2011
Certainly Confused,

There is no law that requires it. However, most co-ops in Manhattan are listed by real estate agents. So while you won't be using an agent, the seller of the co-op certainly will. And their goal will be for you to pay the highest possible price at the best terms for the seller.

So if you can fight that battle yourself, and are qualified to do it, by all means, do not use an agent. If your knowledge base and expertise are also sufficient in law and property condition, you can also dispense with the attorney and the home inspector also.

-Marc

Marc Paolella
Relocation Director/Appraiser
Century 21 Joe Tekula Realtors
201 Route 10 East
Succasunna, NJ 07876
Phone (direct): (973) 584-4235
Coolest map-based home search: http://www.marcpaolella.com
0 votes
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