Thursday, August 2, 2012
How To Find A Good Real Estate Agent in New York
How does a buyer find a good real estate agent in New York? Should you select the agent with ads everywhere, the cousin of your college friend, or your former colleague who became an agent a year ago? This is probably one of the biggest questions buyer clients have. It becomes even more challenging for foreign buyers as their pool of agent candidates is smaller.
In many cases, buyers take the path of convenience when selecting an agent to represent them in likely one of life's biggest purchases. This clearly should not be the case as society tends to expect people with MBA and CFA qualifications to advise them on where to put $10,000 in stocks. But people use the path of convenience when getting an agent to help them on a $1 million Manhattan property purchase.
Here are some pointers to note on how to find a good property agent.
1. Nice, Professional, Knowledgeable:
These are the three top values I observe in the best agents. They are nice, professional and knowledgeable. Simple enough. A client can find out about all three during the first conversation.
2. Does The Agent Own, Rent Or Invest:
If you're looking to buy a primary residence, it makes sense to hire an agent who also owns property. If you're looking for an investment property, it makes sense to hire an agent who has also invested in property.
Anyone who says they do everything is a master of none. Specialties can be a certain area, type of property or type of transaction. What is the agent's specialty?
4. Big vs Small Brokerages:
Big brokerages market their size while small brokerages market their niche. In either case, you are hiring the Agent and not the Company because agents are independent contractors of the company. Agents are not employees. Anyone who is somewhat Nice, Professional and Knowledgeable (doesn't even need to be college educated), would get offers from almost all brokerages. Joining a brokerage is not like joining Goldman Sachs or Citibank.
With Goldman or Citi, one is an employee, receives a salary and needed certain minimum qualifications before getting to compete with thousands of others to get the position. With a real estate brokerage, the agent is an independent contractor and is a business within the brokerage. A brokerage usually aims to hire as many agents as possible because the more agents, the more potential revenue. There is no salary, no health benefits, no employee status and brokerages are not even allowed to set working hours for the agent. Bottom line - you are hiring the agent, not the firm.
In New York and the United States, real estate commissions are paid by the seller. Despite this, the agent representing the buyer still has fiduciary responsibility to the Buyer while the agent representing the Seller has fiduciary to the Seller. Hence buyers should always use an agent because it doesn't cost the buyer. If a buyer does not have an agent, the seller's agent keeps the whole pre-negotiated commission. There is no "discount" because such is illegal by real estate law.
6. Property Inventory:
All agents have access to the same inventory. Hence it's most productive to decide on one agent because with multiple agents, the buyer ends up viewing duplicate properties and if the agents know, these clients become a low priority client which is not the best situation for either party.
Keeping the pointers above in mind, buyers should take the time to speak with agents and choose one that is the best fit. Property is, after all, a major investment that has repeatedly shown to outperform stocks, bonds and other investments. Selecting the right property agent as your adviser deserves its share of attention.
Weimin Tan is a real estate broker in Manhattan, New York focused on condominiums and investor clients. He was most recently interviewed by the Wall Street Journal on foreign buyers of Manhattan property.