How to Find a Great Buyer’s Agent in NYC

Finding a buyer’s agent in NYC is the easiest part of your home search. You’ll be bombarded with requests from buyer’s brokers the moment you start your search online and begin attending open houses.

However, finding an experienced buyer’s agent who will discreetly offer you a Buyer Closing Credit is a much more difficult prospect.

We’ll go over the most important considerations for choosing a great buyer’s agent in NYC in this article.

Table of Contents:

Will Your Buyer’s Agent Offer You a Buyer Closing Credit?

The first test is to ask yourself whether any of the buyer’s brokers you’ve been speaking with has offered you a Buyer Closing Credit as an incentive for choosing them to represent you on the buy side. This is one of the easiest ways to reduce your buyer closing costs and save money on your purchase in NYC.

As of this writing, unrepresented buyers in NYC are almost universally unaware of the fact that Buyer Closing Credits exist. This is because the vast majority of agents in NYC don’t offer any incentives to buyer clients. In addition, many buyer agents, either through ignorance or malevolence, spread misinformation by wrongly telling prospective buyer clients that receiving an incentive from a buyer’s agent is illegal in New York State.

The scale of this misinformation problem became so extreme that New York State’s Attorney General decided to issue an open letter to the real estate community and the general public in April 2015 urging brokers and home owners to take advantage of recent changes in state law allowing commission rebates.

Pro Tip: Estimate your buyer closing costs in NYC with Hauseit’s Interactive Closing Cost Calculator for Buyers.

A Buyer Closing Credit, also known as a broker commission rebate, is completely legal in New York and 40 other states.

In addition to being legal, broker commission rebates in NYC are generally considered to be non-taxable income.

So why hasn’t your buyer’s broker ‘friend’ mentioned any of this to you? Has your prospective buyer’s agent even bothered to disclose to you how much she or he stands to earn in buyer’s agent fees?

Before commencing your search, we strongly encourage you to request a Buyer Closing Credit.

Our Discretion, Your Advantage

Our traditional partner brokers never openly discount which means less disruption and better execution for you.

Will Your Buyer's Broker Be Discreet About the Closing Gift They Offer You?

A Buyer Closing Credit is an easy and automatic way to save money on your purchase, but there are some risks if the strategy is not executed correctly. For example, looping in a discount broker who openly advertises rebates after you’ve already contacted the listing agent directly is an easy way to impair the success rate of any future negotiation.

Many buyers don’t necessarily understand the magnitude of this risk, as it’s true that over 90% of deals have two agents in NYC. Statistically speaking, listing agents in NYC expect to have a buyer’s agent involved on the vast majority of deals they’re working on. And it’s fairly normal for a buyer’s agent to be looped in just before the offer stage or after a buyer has already seen the property once or twice.

So why does the identity of your buyer’s agent matter if listing agents expect most buyers to have representation? Consider this: it’s absolutely not normal from the perspective of a traditional listing agent for a buyer to loop in a discount buyer’s agent for the sole purpose of splitting the listing agent’s commission and putting most of that money in the buyer’s pocket.

You don’t have to be a rocket scientist to realize that this loud and blunt strategy will obviously antagonize the listing agent and make it harder to communicate and negotiate with them during the offer stage. After all, a broker who openly undercuts the traditional commission model is an obvious threat to the way of life for many of the city’s traditional and most established brokers.

How can you expect a traditional listing agent who fundamentally disagrees with the idea of offering discounts to buyers to behave normally in any negotiation with a discount broker?

Looping in a discount broker can be especially harmful if you’re competing against other offers, as a traditional listing agent may be more inclined to advocate for an offer from a less loud and disruptive buyer who didn’t loop in a discount broker at the last minute. Not to mention, it’s entirely rational for a seller to simply show less flexibility on a counteroffer for a buyer who they’re aware is saving an extra 2% compared to the other bidders.

Ultimately, the only safe way to receive a Buyer Closing Credit is to work with a traditional buyer’s broker who doesn’t openly offer and advertise rebates online. After all, what is the benefit of saving money on your purchase through a rebate when you end up paying more during the negotiation or if the deal itself never happens?

Save 2% On Your Home Purchase

Save thousands on your home purchase with a buyer agent commission rebate from Hauseit

Will Your Buyer’s Agent Steer You Away From Lower Commission Listings?

Traditional buyer’s agents in NYC are accustomed to earning 3% commission on virtually all listings in New York City when representing buyers.

However, with the arrival of more cost-effective options for sellers such as Hauseit’s NYC FSBO listing service, it’s fairly normal to see lower commission splits such as 2.5% or even 2% for prime listings in Manhattan and Brooklyn.

That leaves NYC home buyers with one burning question: Can my buyer’s agent be trusted to show me ALL listings which fit my search criteria, and not just the ones which are paying the buyer’s agent 3% commission? Does my buyer’s agent have ethics?

The realistic answer is that, based on what we’ve seen and heard, the answer is NO. With the legalization of broker rebates in NYC, New York’s Attorney General was quick to warn agents of the consequences of discriminating against agents who discount:

“Attorney General Schneiderman’s letter stresses that any complaints of boycotting or discrimination against brokers engaged in rebating will also be fully investigated by his office.”

How do you find a great buyer's agent in NYC? What are the most important criteria for evaluating a buyer's broker? Will your broker offer you a rebate?

Source: Open letter from Attorney Eric Schneiderman to the New York real estate broker industry, dated April 20th, 2015

But the reality is that it’s very hard to prove that your buyer’s agent is steering you away from lower commission listings.

In most cases, the buyer likely has no idea that his buyer’s agent is unethical because only agents who are REBNY Members can see the commission rates being co-broked, or offered to cooperating buyers’ agents in RLS (REBNY Listing Service), which functions as New York City’s Multiple Listing Service (MLS).

It’s really sad and all the more reason to find a trusted and proven buyer’s agent who is also comfortable offering you a Buyer Closing Credit, meaning that she or he is okay to work for something less than 3% and still offer top rated service.

Is Your Buyer's Agent Experienced?

It’s widely known that buying and selling real estate in New York City is much more complicated than in other parts of the country.

There are several reasons why this is the case, including the added complications of submitting a NYC co-op board package, preparing a REBNY financial statement, discerning the differing rules and policies between buildings (such as a co-op’s sublet policy) and navigating the intense competition among buyers.

Having an experienced New York City buyer’s broker alongside you during the transaction can not only make the overall purchase process smoother but also in some cases save your real estate deal entirely. Therefore, when selecting a buyer’s agent in NYC it’s important that you ensure he or she has a high level of both relevant and current experience.

You may want to consider asking your buyer’s agent the following questions:

Just like in any other field, the best buyer’s agent is one who has kept his or her skill set sharp by having regular and dynamic experience in submitting offers.

Since the barriers to entry in NYC real estate are quite low, there are tens of thousands of inexperienced real estate salespeople in the city who are hungry to become your buyer’s broker.

The reality is that virtually all of these agents have not had any recent experience doing live negotiations, running a pricing analysis and building a constructive relationship with the listing agent in order to ensure a seamless deal process.

In a competitive situation where there are plenty of other bidders waiting for your deal to fall through, you’ll have the highest chance of success by working with a buyer’s broker who has been involved in a healthy mix of recent deals.

A seasoned buyer’s agent will also be able to glean competitive intelligence from the listing agent in order to advise you whether or not it makes sense to waive your mortgage contingency in order to make your offer more competitive. Unrepresented buyers who fall into the trap of dual agency are often persuaded by the listing agent to needlessly waive their mortgage contingency, which puts the typical 10% contract deposit at risk.

Co-ops in NYC have notoriously difficult board application processes. Submitting an incomplete, misleading or poorly organized board package can significantly delay the deal process or result in a board rejection altogether.

An experienced buyer’s agent will have worked on dozens of co-op board applications in the past, and therefore he or she will be able to ensure your board package is as professional as possible the first time it is submitted. In addition, a seasoned buyer’s agent will be able to coach and mentor you in advance of your co-op board interview.

If you happen to be buying a co-op in NYC, the importance of having an experienced buyer’s agent on your team is even more important because of the co-op board package you’ll need to submit.

Co-ops in NYC have notoriously difficult board application processes. Submitting an incomplete, misleading or poorly organized board package can significantly delay the deal process or result in a board rejection altogether.

An experienced buyer’s agent will have worked on dozens of co-op board applications in the past, and therefore he or she will be able to ensure your board package is as professional as possible the first time it is submitted. In addition, a seasoned buyer’s agent will be able to coach and mentor you in advance of your co-op board interview.

A Full Service Listing for 1%

Sell your home with a traditional full service listing for just one percent commission.

Can Your Buyer’s Agent Be Trusted With Your Private Financial Information?

Home buying is a very emotional process, and your buyer’s agent in NYC will be your sounding board during negotiations.

This means you may be yelling at your buyer’s agent in NYC during negotiations, and it is her or his job to translate that message in a calmer and more polite manner to the listing agent.  Since this can damage your relationship with your real estate agent “friend,” is hiring a friend as your buyer’s agent something you really want to do?

Moreover, if your real estate agent friend is in your social network, are you comfortable with this person having your detailed financial information including net worth, schedule of assets and liabilities and copies of your bank statements and brokerage accounts?

You are essentially giving your buyer’s agent in NYC the password to your Mint account (online aggregator of asset and liability accounts).

Wouldn’t it be more logical to work with a top rated buyer’s agent in NYC who has agreed in advance to provide you with a Buyer Closing Credit?

Not only would you work with a professional agent associated with a reputable REBNY (Real Estate Board of New York) Member Firm, but you wouldn’t need to even bring up the topic of a commission rebate because it’s something which our partner buyers’ brokers in NYC have already agreed to!

All of our partner buyers’ agents in NYC have professional backgrounds in fields such as finance, law, accounting or consulting.

As a result, the professionalism and competence of our partner buyers’ agents in NYC will be leagues ahead of the typical real estate agent in NYC who is not necessarily required to have any higher education or prior professional experience.

How will you receive your buyer agent commission rebate?

You can either receive your rebate in the form of a reduced sale price after your offer has been accepted or you can elect to receive a commission rebate check after the sale has closed.  Some home buyers prefer the former method because they get to see proof of the rebate sooner rather than later. Some home buyers prefer the latter method because post closing equity is more valuable to them, perhaps because the purchase price is majority financed by a mortgage.

How does that work in practice?

Your buyer’s agent in NYC will tell the listing agent that to get to that accepted offer price he had to take it out of his commission.  Here is an actual example of an email a buyer’s agent in NYC sent:

“And as discussed, please reduce our side’s commission by $10,000 so we can lower the purchase price by $10,000 to $1,490,000.  This will be better for your seller in terms of transfer taxes as well.”

Here is the actual response from the listing agent confirming this via email:

“I will reduce price by $10k and your commission by $10,300.  That’s 10k for price reduction and making up our $300, by reducing price.

Sound ok?  I will let sellers understand this if it is.  I have not told them yet.  So your commission is $34,400.  Our commission is $44,700.  Please confirm and I will reach out to sellers.”

As a result of this exchange, the buyer agent commission rebate you receive is further simplified by less cash exchanging hands!

What if you want a commission rebate check paid in cash after closing?

This is popular especially for home buyers who will be financing their purchase as 1% in equity equals 5% in purchasing power when financing at 80% loan-to-value.  A signed buyer rebate contract with the buyer’s agent in NYC promising to pay you the rebate after close is possible; however, it is sufficient to simply confirm the arrangement by email.  Here is an actual example:

Hi Nina, as discussed on the phone, we’d be happy to discreetly split 2/3 (two-third’s) of our buy side commission with you at closing on something new!

The commission is always paid by the seller and built into the sales price. If you decline the opportunity for free buyer representation you simply hand it all to the listing agent! Since we are a traditional brokerage firm with good relationships across the broker community, no one will know that you’re getting a better deal!

Best of all, you’ll get great advice by working directly with the head of our firm. You won’t just be getting “free” advice” from me, you’ll be in good hands with someone who has done 100+ sales deals in the past 12 months. Furthermore, you can benefit from my experience as a home owner and investor.

Commission rebates are legal in New York and are encouraged by the NY State Attorney General. On the average $2 million NYC home, we’re offering to pay you $40,000 at closing. What do you think?

Good Morning – This email is to confirm that we agree to rebate you 2% of the 3% commission payable to the buyer’s agent for the purchase of [address redacted] (or 66% of the commission we receive). We have spoken with your lawyer and made it clear to him that in conjunction with this deal we’ve offered you a 2% concession (66% rebate). Thank you!

Examples of Unethical NYC Buyer Agent Behavior

Example 1 (unethical NYC buyer’s agent behavior):

A buyer’s agent contacts the listing agent to confirm the co-broke amount on the listing. The listing agent emails the buyer’s agent and confirms that the buyer’s agent commission is indeed just 2%. Here’s how the buyer’s agent responds:

“Sorry, our minimum buyer’s agent fee is 2.5% at this price point. We can’t work with your listing for just 2%.”

It should come as no surprise that the listing agent never heard back from this buyer’s agent or her unlucky client who likely had no idea that this unethical behavior was occurring.

Example 2 (unethical NYC buyer’s agent behavior):

A buyer’s agent (REBNY member) looks in RLS to confirm the buyer’s agent commission amount on a listing. He sees that it says 2% instead of 3%. Instead of just accepting the fact that the listing is only paying 2%, he writes an email to the listing agent:

Buyer’s Agent: “Can you confirm that this listing is being co-broked at 3%?”
Listing Agent: “As stated in RLS, the commission on this unit is 2%. When can your buyer see it?”
Buyer’s Agent: “Sorry, I can’t work for that low of a commission.”

Would you like to guess what happened next? The listing agent never heard back from that buyer’s agent.

Our Discretion, Your Advantage

Our traditional partner brokers never openly discount which means less disruption and better execution for you.

 Posted: 5/23/16 | Last Updated: November 11th, 2019
Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided.

4 thoughts on “How to Find a Great Buyer’s Agent in NYC”

  1. Hey guys, I have done research into this subject and want to work with you. It seems like the discretion your partner brokers have is important. I definitely don’t want to hurt my chances of winning versus another buyer because my buyers broker is lacking in some manner, or because the listing agent doesn’t like him. How many choices if any do I have in the buyer’s broker you assign to me?

  2. So the reason to use a buyer agent in nyc appears to be because it is free and because we need advice. That is what I have heard before. However, you also mention the possibility of a closing gift program whereby the buyer agent gives me some of the built in commission. And this is legal and not viewed as taxable income. How fascinating!

  3. Just to give you a heads up, I tried to post this in a forum where folks were asking how to find a great buyer’s agent in NYC as a foreigner. Didn’t work, so I didn’t want my work to go to waste. After all, I did recommend you guys 🙂 Here it is:

    I recommend working with someone experienced who will also give you a buyer closing credit or incentive at close, and not just a lame closing gift like a bottle of wine, but actually part of the buyer agent’s commission.

    Hauseit is a great local company with pre-screened local agents who have already agreed to give the buyer back a large portion of the commission:

    Keep in mind that it doesn’t actually cost you anything to work with a buyer’s agent. It’s use it or lose it. The commission is built into the price, and the seller pays it regardless. If you forgo your right to free buyer representation, you simply give all 6% commission to the listing agent.

    I posted a link to an article below that gives some pretty good tips on how to find a great buyer’s agent, especially if you’re a foreigner.

  4. By the way, I think it’s important to highlight to buyers in your article that you never should sign any contracts or exclusivity. Buyers are always “free agents” meaning they can work with any agent or no agent.

    If an agent tries to get you to sign an exclusive, then you should run!

    Note that I’m not talking about the agency disclosure form which isn’t a contract, that’s just a state mandated form that agents are required to present to buyers at first substantial contact.

    But short story is buyers never have to sign anything, no exclusives, so you can work with whom you wish on the buy side.

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