Latest posts by Gea Elika (see all)
- The Costs Per Square Foot of Renovating in NYC - April 17, 2018
- What is an Exclusive Listing Agreement when Selling Real Estate? - April 7, 2018
- Making Sense of (FAR) Floor Area Ratio in NYC - March 31, 2018
Traditional real estate brokers work with the seller to determine a price, get the home on the market and convince a potential buyer that a particular home is the correct one for them. While this is a valuable and necessary service, it often leaves buyers in the awkward position of trusting the advice of a broker whose main objective is not buyer satisfaction, but the sale of the house.
Of course, this potential conflict of interest is true of all sales, whether it be of cars, stereos, or real estate. In real estate, however, no two homes are the same. This gives the seller a significant advantage that they do not have in markets wherein multiple vendors sell identical products.
This uniqueness of each home and neighborhood also leads to what economists call “informational asymmetry” – when one party in a transaction is privy to information and the other isn’t. In this case, unless the buyer happens to be a real estate expert, he or she is always to a certain extent at the mercy of the broker in regards to the various minute details of the home.
Understandably, this situation has led to a steadily growing demand for brokers that work without this potential conflict of interest and focus solely on the interests of the buyer.
It is no surprise that this growing demand for buyer brokers is greatest in New York City, where the high prices make real estate decisions all the more important. Furthermore, the city is full of various idiosyncrasies and unique market dynamics that most buyers find difficult to navigate on their own.
The city’s luxury market holds a particularly high demand for buyer brokers. Usually quite financially sophisticated, buyers in this market are well aware of the complexities of the real estate market and of the financial power that comes with having a specialist representing the buyer’s concerns.
Of the various firms specializing in this area, Elika Associates, a firm composed exclusively of buyer’s brokers, is one of the fastest growing. Its business plan relies on a combination of a large internet database of listed homes and expert brokers that deal with their customers individually. The success of Elika Associates has begun to show that, even in a market as old and settled in its ways New York City, a new type of service can be combined with emerging technologies in ways that can begin to fundamentally level the power dynamics between sellers and buyers.