New York – Buying a home without hiring a broker may seem like a smart way to save money. The technology is certainly there to go it alone. You can search and compare listings, get useful advice, and contact the seller or sales agent directly.
However, the agent-less approach is not likely to save you much at all, and in fact, may even cost you more in the long run. Here’s why:
Agents provide invaluable knowledge
Buyer’s agents are trained in every aspect of home sales from search to close, including appraisals, inspections, financials, board approvals, and more. They use this valuable experience to make an otherwise complex process flow smoothly and serve your best interests at every turn. Buyer’s agents are required to keep what you tell them confidential and disclose to you anything they know about a property that might affect your decision to purchase it. Board package help? Financials review? Repairs needed? Any problems in the building? They’ll work with their team of attorneys, bankers, inspectors, handymen and make sure they guide you to a place you’ll be happy with now and in the future.
You will pay a commission either way
Both the seller and buyer agent commissions are already built into the sales agreement before the listing hits the market. Eliminating the buyer’s broker does not eliminate that commission. Rather, in the absence of your own representation, the seller’s broker becomes a dual agent and receives both commissions accordingly. The seller’s broker has fiduciary duty to the seller, including reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. His first and most important role is to get the seller the highest price in the shortest timeframe possible. A seller’s agent does not represent the interests of the buyer. Many legal advisors recommend against dual agency for this inherent conflict of interest.
They have all the right connections
Real estate agents have resources and connections for just about everything, from home inspectors and attorneys to mortgage brokers, designers and more. If you need help immediately with an inspection, for example, your agent can help you meet the deadline by calling in a favor to someone already in their network.
They are expert negotiators
Your agent knows that there’s more to negotiation that simply agreeing on a price. Every apartment sale in NYC is unique and brings its share of challenges and opportunities. In certain cases, the property will be priced very high and your agent will look at the comps from similar transactions and make strategic recommendations. While in other cases the property will be priced below market value and your agent will advise you to be very aggressive with your offer. Even offer above asking!! The right agent will guide you and make recommendations based on your interest and demand for that specific property. Bidding directly, you are at the mercy of the sellers agent, who will most likely tell you what the seller wants, instead of what you need to know. Together you will evaluate the pros and cons of each offer or counteroffer, and work closely to get the best possible deal that suits your needs.
They give you peace of mind
Buying a home involves a lot of complex paperwork and deadlines. The right agent will ensure that the process runs smoothly for you and that nothing important is missed. Co-op and Condo boards in New York have very strict personal and financial requirements. Your agent will help you prepare your finances, the lengthy and tedious Board package and guide you on winning the board approval. The last thing you want is to try to save on the broker fee, but then not get approved.
Direct-to-seller transactions typically favor the seller and leave the buyer at a disadvantage. Instead, align yourself with a buyer’s agent that has your interests at heart, so you can buy with confidence. And yes, save money too.