While it can be extremely beneficial to have a seasoned buyer’s broker help you navigate past common first time home buyer mistakes, it can also be very detrimental to work with the average buyer’s agent in NYC.
There are 50,000 licensed real estate agents in NYC, many of them with barely a high school education.
Because sales deals are rare relative to the sheer number of licensed real estate agents in New York City, the typical buyer’s agent in NYC is not a home owner, has zero exclusive sales listings and has never done a sales deal.
What’s worse is that a first time home buyer who has done any research online will know as much about real estate as your average NYC buyer’s agent.
Your average NYC buyer’s agent will simply help you search for properties online and schedule showings for you.
They will follow you around at showings and not add any value. They won’t have any calls with you to go over pricing, comps or the market.
They won’t explain to you that offers are not binding until a contract is signed. They won’t even be able to explain to you that closing costs in NYC are significantly higher for new developments versus normal re-sales. Their help in scheduling showings is secretarial work that you can easily do yourself.
Unfortunately, because every New Yorker seems to have at least 5 real estate agent friends, most NYC first time home buyers make the mistake of working with one of their friends on the most important transaction of their lives. This is often a major mistake because first time buyers are even less likely to second guess the experience and knowledge of their agent friends. Many home buyers won’t even bother to ask a single question about their buyer’s agent’s deal history!
Despite making 3% of the sale price in commission, your typical buyer’s agent in NYC will attempt to cover up how much they’re being paid by the seller and will never reveal the deal sheet to the buyer.
Buyers’ agents in NYC have always enticed home buyers to work with them because their services are billed as “free.” That’s because both the listing broker and buyer’s broker commission is paid by the seller. If the buyer refuses dedicated buy side representation, the listing agent will simply earn both sides of the commission.
As a result, your typical buyer’s agent in NYC will want to cover up how much they are being compensated for their services. In this manner, they want the buyer to continue to be grateful for helping them out “for free.”
As a result, your typical buyer’s agent will attempt to get away with not giving their client any closing gift whatsoever, especially if they think that the buyer is still unclear on how their buyer’s agent is being compensated.
What’s even more horrifying is that these same buyers’ brokers will often assure their clients verbally that they’ll take them out to celebrate after the deal is done.
Some buyers’ brokers in NYC have assured their younger clients that they’ll take them out to go clubbing and pay for bottle service once the deal is over. Then, once these same buyers’ agents have been paid, they’ll simply disappear. When chased, they’ll respond typically with something like “sorry but I’ve already used the money for something urgent” or “sorry I’ve already budgeted the funds to pay for my cat’s surgery.” What a load of baloney!
Note: Some better behaved agents have been known to stop by after the closing with a house warming gift for their client. However, these typically have low monetary value compared to the commission check received. Common gift choices include a bottle of champagne or a box of chocolates. We’ll explain below how to get more of the economics back at closing without compromising your chances of success.
Get a 2% Rebate When You Buy
Save thousands on your home purchase with a buyer agent commission rebate from Hauseit
The Pareto Principle applied to real estate means that 20% of an experienced buyer’s agent’s clients will take up 80% of their time.
Therefore, any good buyer’s broker will know to focus on the good clients who are grateful, respectful and independent.
Any buyer’s broker who’s survived in this industry for more than a few years will also know to avoid and cut loose toxic clients that are demanding, needy and rude.
Unfortunately in a place like New York City with many aggressive, type A personality working professionals, there are always bound to be a few bad apples. We’ve seen plenty of examples of bad human beings who believe it’s their right to call at all hours, be rude and excessively demanding, and act with general disrespect to veteran brokers who are on their side.
If you believe that you’ll be very demanding, needy and generally disrespectful, then having a buyer’s agent is not meant for you.
Good buyers’ agents who always have plenty of clients will try to avoid you, and you’ll never be satisfied anyway.
Listing agents won’t enjoy dealing with you either, but they’ll likely have to just stomach it in order to earn both sides of the commission.
Disclosure: Commissions are not set by law or any Realtor® association or MLS and are fully negotiable. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided. Square footage numbers are only estimates and should be independently verified. No legal, tax, financial or accounting advice provided.
