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Latest posts by John English (see all)
- FSBO or Real Estate Agent? - May 25, 2018
- What is a Proof of Funds Letter and Why do Home Buyer’s Need It - May 24, 2018
- JUST LISTED: 180 Sixth Avenue, Apt 10B – $6,450,000 - May 23, 2018
Traditional dual agency 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 primary objective is not buyer satisfaction, but the sale of the house.
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.
Demand for NYC Buyer’s Agents on the Rise
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 exclusive buyer brokers is in flux in New York City, where the high prices make real estate decisions all the more critical. 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 interests.
The last few years have seen significant changes in the real estate industry. Thanks to the internet and new technologies buyers have unprecedented access to listings and real estate information. This raises the question, are buyer’s agents still necessary? The short answer is yes and here’s why.
They can guide you through the home buying process
All the information available on the internet might make it seem like buying a home is relatively straightforward but that’s rarely the case. The home buying process can be complicated with many pitfalls. An experienced buyer’s agent knows all the ins and out of the industry and will be there to guide you through the whole process.
They’ll be able to take a look at your finances, understand what your needs are and set a realistic budget and goals. If you’re in need of pre-approval for a mortgage, they can refer you to plenty of efficient mortgage bankers. They’ll also help you with filling out your REBNY Financial Statement which you’ll need for making offers. If you’re buying a co-op or condo, they’ll help you with putting together a Board Application Package that will give you the best chance of success. In short, buyer’s agents make the whole purchase process a lot less confusing and frustrating.
They can find the right listings and help with scheduling properties
The online market might make it look more natural to search for a home on your own, but few have the time to examine properly. An experienced agent knows the inventory how to search for the right properties and can devote themselves to it fulltime. They also have preferred access to other listings such as off-market properties and New Developments off the plan with schedule A pricing which you may not. An experienced buyer’s agent also peels back the noise and knows how to differentiate between a great property and a lemon.
When you attend open houses, you can leave your agents contact details on the sign in sheet, so you aren’t pestered by follow up calls and promotional emails from listing agents. If you come across a property, you like but isn’t doing an open house you can have your agent call and schedule a personal viewing. Seller’s tend to take such requests more seriously if it comes from a buyer’s agent as it shows you’re serious about buying.
They can help overcome setbacks
If a home inspection or appraisal report brings attention to some issues, your buyer’s agent can help you proceed. Negotiations in these moments can become quite heated. It’s much better knowing you have an experienced professional by your side that knows how to handle these moments.
They can help with bidding strategy and negotiations
Possibly the most useful duty of a buyer’s agent is their ability to estimate fair value and gather information on a listing to help you plan a bidding strategy. Knowing about the seller’s background, their expectations and previous offers give you a significant advantage when it comes to offering the right price.
Once you have an offer accepted the agent can then handle negotiations with the listing agent as they iron out the specifics of the deal. Remember, NYC is largely a seller’s market. Submitting a signed purchase offer does not make an offer legally binding, at least not until the seller has counter-signed. There will probably be other offers with the seller free to choose the best one. Your agent will ensure you remain on the seller’s radar to give your offer the best chance of being accepted.
Buyer’s agents may not be the keyholders they once were but when it comes to understanding the market, evaluating properties and handling all the paperwork and usual setbacks they can still prove invaluable.
Elika Real Estate, a firm composed exclusively of buyer’s brokers, is the leading such brokerage in New York City. Its business plan relies on a combination of an extensive enterprise database of listed homes and expert brokers that deal with their customers individually. The success of Elika Real Estate 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 level the power dynamics between sellers and buyers fundamentally.