Tuesday, May 24, 2011

Buy-Side Representation; More Than Just Window Dressing

Many home buyers struggle with the question of whether to engage a buy-side broker. One of the big questions is: "What can they bring to the table?" Some people have the opinion that going into a deal unrepresented will put them in a stronger position since the listing broker will not have to share his/her commission with another broker (outside of their firm/team member). I disagree with this assumption. Remember, it is the seller who calls the shots and if a listing broker gives the appearance that they are pushing a deal simply because it will net them more money, the seller will surely pick up on this sleazy behavior. The vast majority of sophisticated NYC property owners are MUCH to smart to fall for this kind of bullshit. I would also add that the majority of listing brokers would not want to risk their reputation playing these kind of games.


The listing broker has a fiduciary duty to the seller. THEY WILL NOT AFFORD YOU, THE BUYER, ANY REAL CRITICAL ANALYSIS OF THE PROPERTY THEY ARE REPRESENTING. They may be polite, but their directive is to sell the property for the most money they can get for the seller, end of story.

I understand the fact that many buyers today are doing quite a bit of the legwork finding a home on their own. There are tools available now to research listings, do price discovery, comparable analysis and get real-time updates for new listings. I also understand that buyers would like to be compensated in some way so I have a business model that does just that.

What you will get from me is an honest evaluation of a property. I will tell you what I think it is worth before asking you what you would like to bid. I will not pull any punches and point out all the negatives along with the positives to help you understand why some issues will present a problem when it's time for you to sell (even if these issues are not a negative for you). I will also offer you an opinion on whether or not you should even be considering buying, based on your unique situation. I have, on a number of occasions, recommended to a client that buying was not a good idea based on timing issues or job prospects. Many buyers have been very surprised in the past that I would make a case for renting or just staying where they were, and thanked me for my input. And many listened. I have also strongly protested when buyers have come to me interested in purchasing an apartment I felt was fraught with landmines, such as too many unsold units, poor location, too many renters or delusional pricing.

Recently I spent about two hours on the phone talking someone out of buying a property on 158th and Riverside Drive...they were shocked!! It was a lay-up for me, they brought me the deal and just asked me to guide them in for a soft landing. I lived in the area and even though it may have been fine for the buyer, the potential for appreciation and re-sale was very dim. They were amused at the broker talking them out of a done deal. I recommended they keep looking and made some suggestions. They found a wonderful place up on Chittenden Avenue, still way uptown but with an awesome river view and IMHO a better place to buy. Today they are thrilled! They love their new place and could not be happier with the neighborhood!

Still think you don't need a buy-side broker? I feel strongly that, with the right one, you are much better off as a buyer. You need someone that will guide you with honest, critical advice and not just a salesman sending you to Open Houses. Either way you decide to roll remember one thing: the listing broker is duty bound to the seller, read this great article on "dual Agency" prepared by the NY Department of State.

Simply put, nothing trumps your right to good representation and the right to find your dream home. You are in charge; I am here to try and serve your needs.


Isn't it a bit ironic that some brokers play both sides of the game? You know they will give you a hard sell that you should have a broker representing your interests when buying. But when they have a listing and you come in alone, they pounce on you and insinuate that you will be fine in their hands? Also be careful when you sign in without a broker at an Open House. Some sign-in sheets state that by doing so, you waive your right to engage your own broker later on.

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