It’s Not As Easy As It Looks
Residential real estate buyers feel enabled by the Internet. They can go online and, with a few keystrokes, find everything that is for sale in the neighborhoods in which they are interested. So they increasingly believe that they can make themselves a better deal if they work without a buyer’s agent and offer and negotiate directly with the seller’s agent. After all, gatekeeping the information WAS the primary job of the broker, right?
Wrong! As agents, we have redefined our value proposition to clarify how our knowledge and expertise improve the quality of the transaction. Online sites like Zillow, Trulia, and StreetEasy offer almost all the details about every listing (those details are often wrong, but that’s another story.) But information and expertise are not the same thing. I present below a few of the many reasons why you are better off working with a buyer’s agent:
• You are probably not saving money on commission. Many buyers assume that if they view the property without an agent of their own, the seller’s agent gets only half the commission and the buyers will then benefit by paying a lower price. This is likely wrong for a couple of reasons. First, often the commission remains the same regardless of whether there is one agent or two; even when it is lower for a “direct deal” in which the buyer is unrepresented by an agent of his own, it is usually reduced by only a half point or a point. In most cases this is not enough money to turn the seller’s head. Second, since the seller’s agent by definition works for the seller, it is her fiduciary responsibility to get the buyer to pay as much as possible. So if there IS going to be a savings in commission, the seller’s agent wants to make sure that advantage goes to her client, the seller, in the form of a higher net sales price. More often than not the buyer doesn’t benefit.
• The deal is more complicated than it looks. Most people don’t think they can represent themselves in court or remove their own appendix. But for some reason everyone seems to believe he is an expert in real estate negotiation. Ours is actually a highly skilled profession which requires years of experience to fully master. Especially in today’s market, in which numerous factors tend to go into pricing and price flexibility (or lack thereof), an expert negotiator with knowledge of the building and the neighborhood substantially increases a buyer’s chances of making the best possible deal for herself not only in terms of price, but also in terms of closing date, inclusions, etc. And in my long experience almost no one negotiates well on their own behalf. There tends to be a lot at stake, and most buyers (or sellers) become too emotionally involved to make dispassionate negotiating decisions. Choosing the place you want to live may be a very intuitive and emotional process, but negotiating to secure it should be even handed, analytical, and rational.
• The buyer without the agent rarely succeeds in competitive bidding. Over the years we have learned a lot of tricks to help our customers secure the properties they want in competitive bidding situations. Without those tricks, buyers are almost always left behind. We see every week that the unrepresented buyer rarely wins the property.
• A buyer’s time is better used doing what she does best. We live in a specialized world. If as a buyer without an agent you probably are not going to save significant money, and if you are more likely NOT to obtain the property you want without an agent of your own strategizing with you, why would you not work with an expert? We agents have spent years developing the skills and expertise necessary to facilitate transactions in the complex world of New York City real estate. I understand that many buyers (and sellers) feel that the Internet provides them with everything they need to go it alone. But the evidence indicates otherwise. Trust me!