Today I'll revisit this subject again, with a Clash lyric to set the tone. The subject is: "Are you better on your own or with us?" I'm usually more judicial and would answer this "with your own broker" but today I want to focus on my services and what we offer. Yesterday while discussing an offer with a client, I pointed out that the owner was selling FSBO with the help of a hybrid real estate agency. I brought up the possibility that he (my client) may be better off pursuing this on his own because without a broker, the owner might be willing to negotiate a better price. My client stopped me cold, saying, "We want to continue with you, you're our broker." Even this couple, who are overly qualified to negotiate on their own behalf (Yale/Harvard degrees between them) appreciate having their own representation, someone they can bounce ideas off of and represent their offer.
But I want to focus on what is financially more astute. I know 100% you are better off with my services when the seller has his own broker, both financially and strategically. But with a FSBO, (which is rare to deal with anyway) I have to watch carefully to make sure my client is getting the best possible representation from me. The problem is still the unknown, of course. If you ask the seller point-blank they will tell you you're better off unrepresented. But I don't necessarily think so.
At the end of the day, the seller wants to make a deal and 2.5-3% is not going to come between a seller and a closed deal. The unrepresented seller has a few things going against him in NYC. First and foremost, the majority of buyers have their own representation.The pool of direct buyers vs. represented buyers is slim to none. Secondly, I really believe that working in conjunction with a broker you can negotiate a better (lower) deal than on your own interacting directly with the seller. I know I help my clients stay on track and draw a line in the sand when necessary. Most of all, I am NEVER afraid to lose a deal. I know my buyers are loyal and if one deal doesn't work out there will be another down the road.
What is the magic bullet that assures you will have an advantage working with me? The commission rebate. After all is said and done, you take 1.5-2% off your best offer. This is a known quantity that you will receive at the closing. According to a 2006 IRS ruling, real estate commission rebates are an adjustment to price; no tax due or filings required. Also the US Department of Justice champions commission rebates as a great benefit to consumers, adding value to their real estate purchase.