Wednesday, April 11, 2012

You Don't Think you're Using a Broker?

When you make the decision not to engage a buy-side broker you are not really going it alone. The listing broker now takes over the responsibilities that your broker would have been handling. I also don't believe that you are at an advantage when you are unrepresented and I say this based on experience, not self-interest. I understand the logic behind the idea that being unrepresented gives you an edge but in reality it never (or at best very rarely) works out this way. Although all of my clients are way over-qualified to handle such a transaction on their own, there are many reasons why they are better served otherwise. The listing broker is serving the seller's best interests first and possibly his/her own interests above yours. They want to close and earn their commission and, of course there is nothing wrong with that but it does compromise your position.

I just had a person call me about possible representation. This person had an apartment they were interested in. I had a look and gave an opinion on price, which was strongly correlated to the position of the unit in the building. Even though there appeared to be a lot of interest, I recommended not going outside a specific price point just because the market is currently hot in this neighborhood. Under different circumstances this home would not move unless it was priced to account for its deficiencies. They then asked me about another apartment which was much better and I was very familiar with the neighborhood and to some extent, the building. I gave my opinion again. I then received an email from the buyer with a thread to the conversation she had with the listing broker (they decided to proceed without me, which is fine of course). What was interesting was the way things unfolded as they began their quest for the apartment. Before they could even get an offer submitted, they were told the seller had accepted another offer and they could not submit their own offer on the home. It is a bit more detailed but in the end, all they received was a solicitation for representation from the listing broker. There certainly was no preferential treatment for being "unrepresented"...quite the contrary.

I am not a miracle worker but this could have been handled differently to at least get them up to bat and give them a shot. The listing broker is certainly not at fault; he was doing his duty which is working for the seller. Were they better off alone? Not this time. I would be the first to remove myself from a deal if I thought the client would be served better and I stand by this on EVERY deal.

I put together a business model to service those buyers who prefer to work on their own but who can also benefit from some professional guidance. We work as a team. You are right there with every move that I make, copied on every communication, reviewing any offers that are submitted and discussing and approving all communication and negotiations with the seller.

These are just a few thoughts on the idea of "going it alone" and perhaps a chance to look deeper into that idea.

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