Whether you are taking the plunge to buy your first apartment in NYC or going through the buying process a second or third time, you are probably debating if you should hire a real estate agent to represent you as a buyer’s agent.
It’s completely natural for buyers to be apprehensive about working with a real estate agent. First-time buyers, who are early in their process, can be anxious about dealing with pushy agents. Experienced buyers who are familiar with the apartment buying process don’t believe they need an agent or don’t want to work exclusively with one broker due to a bad experience with traditional agents in the past.
Additionally, thanks to technology, there is a large portion of NYC buyers that prefer to search online by themselves and wait to engage a real estate agent until they’ve found the one.
Buying an apartment or home is usually the largest financial transaction of most people’s lives though, so it is important to understand the key benefits of hiring a buyer’s agent even if it’s later in your buying process.
Below we outline the key reasons why you should always hire a buyer’s agent in NYC.
Perhaps the most important reason for working with a buyer’s broker or agent in NYC is to make sure you get the best price for your apartment. While you may be an experienced negotiator in your profession, that may only get you so far.
Buyer’s agents have easy access to comparable sales data to help analyze what your apartment might be worth, as well as the ability to provide a negotiation strategy that leverages these data points and other local trends they are seeing from working with other customers.
You may think a discount to the listing price is a win, but how can you be certain you won’t still be overpaying? This is especially true in a buyer’s market where recent pricing data can get you an even bigger discount.
Some home buyers like to do everything on their own, but working exclusively with your own buyer’s agent gives you a significant advantage as you have your own advocate that has the obligation to represent your interests.
If you deal directly with the listing agent and are unrepresented, it is important to remember they have a fiduciary responsibility solely to the seller. While they may seem like a very nice person, they only have an obligation to represent the seller’s best interest, not yours.
In the event you enter into a dual agency relationship with the listing agent, keep in mind that you are giving up your right to an agent’s undivided loyalty. You can learn more about New York State’s discussion of this topic on their website - “Be Wary of Dual Agency”.
The other added plus of having your own representative through the buying process is that your agent or broker acts as a buffer for you. What does this mean? Well, buyer’s agents help remove the emotions from the negotiation process and prevent any information leakage between the buyer and seller that may otherwise negatively affect a negotiation if you handled it by yourself. Furthermore, having your agent as an intermediary allows you to play good cop bad cop as a helpful negotiation tactic when necessary.
Some buyers believe that they can get a better deal by dealing directly with the listing agent if they are unrepresented. While your friend or aunt may have been one of the lucky ones to get such a deal, it is very rare for listing agents to give up commissions, and you receive no additional financial benefit.
The reason for this misconception is that buyers believe listing agents benefit from not having to share their commission with a buyer’s agent. Since commissions are privately negotiated between the listing agent and the seller, you as the buyer won’t know if a listing agent is actually reducing their rate to get you a better deal.
In most cases, you will still pay the same price for your apartment and the listing agent will make twice as much money as they would have if you had been represented.
One of the unique aspects of buying an apartment in NYC is the board package application process which many buyers can find overwhelming. This is especially true if you are buying a co-op apartment as the boards of those buildings are even more stringent on the amount of information you need to provide as a buyer candidate,
Hiring a buyer’s agent removes the majority, if not all, of the stress and anxiety associated to preparing a board application. These agents have guided other buyers through the process before, know the important questions to ask, and have tips to navigate the board package in a seamless manner.
If you are the type of buyer that likes to be in control of your buying process without sacrificing expert advice in the moments that matter, then you should choose a more modern, tech-enabled brokerage that makes your experience more seamless. In doing so, you also unlock huge savings!
Prevu has created a digital home-buying experience that enables you to browse listings, schedule viewings, make offers with an experienced local agent, and save - all from the convenience of your phone or computer with zero pressure.
By streamlining your buying experience with helpful online tools, Prevu is able to pass along significant savings to homebuyers in NYC with a commission rebate of up to 2% of your purchase price.
For example, if you bought a $1,500,000 apartment in Chelsea or Park Slope with Prevu, you could receive up to $30,000 cash back after closing. It’s always great to keep more money in your pocket.
In the end, whether you choose to work with a traditional agent or take a more modern approach with a tech-enabled brokerage that saves you money, make sure to hire a buyer’s agent in NYC to help you navigate the home-buying process smoothly.
Despite having to pay sky high prices for apartments in NYC, some buyers may not realize that there are additional closings costs they haven’t considered. The extra costs can really add up, especially for condos.
January 01, 2019
Thomas Kutzman, Co-Founder of Prevu, will co-host "Real Estate Is Your Business" podcast focused on how technology Is transforming the real estate industry.
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