A diligent, honest and knowledgeable buyer's broker is essential when buying a NYC apartment.
With growing access to listings and even price histories online, one may wonder if they need a broker to purchase an apartment at all. After all, anyone who can surf the web can likely find out what apartments are currently on the market and even when the next open house will be held. Despite the potential to DIY one’s housing search, most real estate insiders still agree that buyers should work with their own broker. Doing so can increase one’s access to open houses, help in negotiations, and most importantly, mitigate some of the risks associated with buying in New York City.
In this article:
What is a Buyer’s Broker?
There are sellers’ brokers and buyers broker (sometimes, referred to as sellers’ agents and buyers’ agents). Sellers’ brokers represent sellers and offer a range of expected services—for example, listing your unit, scheduling open houses, and ultimately, ensuring you get the best offer on your home. Buyers’ brokers represent buyers and offer a different set of services. Namely, they help buyers find listings, get into open houses, and make a viable offer. Technically, there is nothing to stop a buyer from working with the seller’s agent, but this can be tricky.
To be clear, one can operate as a “double agent”—for example, work for the buyer and seller at the same time—and this is legal. But this hasn’t always happened. A number of recent legal rulings have found that sellers’ brokers sometimes favor sellers over buyers. It is on this basis that a recent California judge determined that any broker acting as a double or dual agent must offer the buyer an equivalent duty as the brokerage (see, for example, Hiroshi Horiike v. Coldwell Banker Residential Brokerage Company). What does this mean? In a nutshell, if a broker is representing both the seller and buyer and they have important information about the property (e.g., they’ve learned from the seller that the property has an unresolved mold problem or needs extensive electrical work), they must disclose this information.
Despite such rulings, of course, the question remains: Is a buyer better represented by a seller’s agent who is already working to get someone else a high offer on their home, or better off finding their own agent? In a sluggish market where buyers are often simply desperate to sell, the double agent situation might, in fact, be advantageous to both the seller and buyer. In New York City’s housing market, however, conventional wisdom suggests buyers are always better off working with a buyer’s broker.
What an Outstanding Buyer’s Broker Offers
The New York City real estate market is competitive, complex, and for first-time buyers, it can be extremely stressful. If your buying power is limited by financial constraints or a lower than desirable down payment, you’ll face even more hurdles. If you’re looking to buy in a co-op and will need to navigate even more financial hurdles and a board interview, the experience of buying a home may be even more challenging. This is where an outstanding buyer’s broker can make a world of difference.
First and foremost, working with a buyer’s broker means you’ll get unbiased representation. Once again, brokers representing both partiers shouldn’t be biased, but there are no guarantees here—even well-intentioned brokers may end up being somewhat biased as they navigate a dual transaction. This may prove especially important during negotiations. Second, a buyer’s broker may be more invested in closing the deal quickly. After all, if you’re working with a dual agent, they’ll get compensated whether or not your own offer is ever accepted. Finally, since a buyer’s broker is only working with you, it is more likely that they will be available to offer things may go above and beyond what a dual agent can do—for example, offer tips on how to navigate a tricky co-op board meeting. Once again, this has everything to do with the fact that they aren’t just invested in closing the deal but specifically invested in you closing the deal.
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The Cost of Working with a Sellers’ Broker versus Buyers’ Broker
A final and important consideration is financial. When you buy, whether or not you’re working with a buyers’ broker, you’re going to end up paying roughly the same brokers’ fee. The brokers’ fees are part of the sale. If you’re working with a double agent, all the fees will go to one agent. If you’re working with your own buyer’s agent, however, the brokers will split the fees. Either way, you’ll essentially be paying for them, so logically, it seems far more advantageous to bring on your own broker early in the process. In addition, doing so may even reduce the fees you end up paying. After all, if you’re working with your own broker, you may be able to negotiate a lower fees upfront.
How to Find a Buyer’s Brokers
There are clearly many advantages to working with a buyer’s broker, especially if you happen to be buying in a highly competitive market. But first, you need to find a buyer’s broker. It’s not that brokers don’t like buyers—helping someone buy their first home and even a subsequent home can be a phenomenally satisfying experience—but it is generally a lot more work than working with sellers. When brokers sign on to represent buyers, they are often committing to a relationship that will last for months. On the sellers’ side, it’s a different story—sellers’ brokers often close deals in just a few weeks. Still, it is possible to find a great buyer’s broker, if you know where to search.
To begin, search for a broker on a highly reputable listings site or contact CityRealty who can connect you with a reputable broker tailored for your apartment search. CityRealty has an established a network of hundreds of agents from all of the city's major brokerages. Therefore, you can be guaranteed that the brokers have been interviewed, vetted, and have proven track records. An experienced broker will have access to more listings, more data on the local housing market, and most importantly, be better equipped to guide you through the many stages of buying in New York City.
To begin, search for a broker on a highly reputable listings site or contact CityRealty who can connect you with a reputable broker tailored for your apartment search. CityRealty has an established a network of hundreds of agents from all of the city's major brokerages. Therefore, you can be guaranteed that the brokers have been interviewed, vetted, and have proven track records. An experienced broker will have access to more listings, more data on the local housing market, and most importantly, be better equipped to guide you through the many stages of buying in New York City.
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Would you like to tour any of these properties?
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Or call us at (212) 755-5544
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Contributing Writer
Cait Etherington
Cait Etherington has over twenty years of experience working as a journalist and communications consultant. Her articles and reviews have been published in newspapers and magazines across the United States and internationally. An experienced financial writer, Cait is committed to exposing the human side of stories about contemporary business, banking and workplace relations. She also enjoys writing about trends, lifestyles and real estate in New York City where she lives with her family in a cozy apartment on the twentieth floor of a Manhattan high rise.
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