When buying New York property, engaging a buyer's agent is the first step, because in New York, seller pays both sides' agent commission. Regardless of whether the buyer is represented by an agent, the commission has already been factored into the price.
If a buyer is not represented by an agent, the seller's agent keeps the entire commission. But 90 percent of transactions involve a buyer's and seller's agent in which case the commission is split 50/50.
The Roles:
In New York real estate, agents are required to disclose whose interest the agent represents. A buyer's agent represents the best interest of the buyer. A seller's agent represents the best interest of the seller. A dual agent represents (or does not represent) the interest of both.
New York law requires that agents explain to the client whose interest they represent through an Agency Disclosure Form.
Why A Buyer's Broker: A buyer's broker will protect the buyer's interest throughout the purchase process. In acting as a buyer's agent, we will:
(i) Preview and recommend condominiums for the buyer
(ii) Perform due diligence and market analysis on the property
(iii) Negotiate in the buyer's best interest
(iv) Oversee the entire buying process including coordination with attorneys and bankers
What Is The Fee? In New York real estate, the broker commission for both the seller's agent and buyer's agent come from the seller. The entire broker commission, typically 6 percent, is already determined before a property is listed on the market. If the buyer has a broker, this commission gets split 50/50 between the two agents. If the buyer does not have a broker, the seller's broker keeps the entire pre-negotiated fee. Hence, a buyer is wise to have buyer broker representation.
Who Are Seller's Brokers: Seller's brokers are ones whose names appear prominently by property listings you may see online or on the windows of real estate storefronts. They represent the sale of their seller's property and have to act in the best interest of the seller. This includes attaining the highest price for the listed property and not disclosing facts that are not in the best interest of selling the property.
Value Of A Buyer's Broker: Buyer's broker is not a new concept. It's just that the majority of agents focus on getting property listings and hence represent sellers. Buyer focus is a niche. From a broker perspective, a buyer's broker needs to be familiar with the entire market. For example, a buyer's broker needs to be familiar with the top buildings in each neighborhood, understand what are the high demand/high appreciation buildings, what are the high supply buildings with too many investors etc. Beyond that, a buyer's broker needs to know what are the preferred apartment lines within each building. Yes, there is a lot to know and the broad knowledge base is necessary to help buyer clients identiy what is a good buy.
In contrast, a seller's broker only needs to focus on the strengths of his/her listings and understand the drivers relative to the sales listing.
We are focused on buyers within the Manhattan condominium market and hence yes, we focus on being a buyer's broker.
Does A Buyer's Broker Have Access To All Properties? Absolutely. New York real estate is based on membership into the Real Estate Board of New York (REBNY). Per REBNY rules, a new listing has to be uploaded into the broker system within 24 hours of getting the exclusive agreement signed. This means every broker has access to the entire inventory of properties for sale.
Wei Min Tan is a Manhattan, New York buyer's broker focused on investors and foreign buyers. He often appears in the media including CNN, Wall Street Journal/MarketWatch, CNBC and New York Times discussing Manhattan property. Weimin can be reached at tan@castle-avenue.com
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