October 1st 2014
Mann Report Residential
It’s not smart for buyers to be unrepresented in today’s marketplace. The inventory is too thin, and the stakes are too high. In a climate where well priced properties are attracting multiple offers and selling quickly, it’s important for both sides of the transaction to be represented separately by experienced agents. Dual agency, though recognized by NY State, is problematic. Experienced brokers widely acknowledge that when each side has its own representation, the likelihood is greater that the deal will proceed more smoothly and with fewer hiccups to a successful close. There are compelling reasons for buyers to collaborate with a professional agent.
Today with the click of a mouse, consumers can scan online inventory, view floor plans and photos, scrutinize housing stats and read blogs. Though sometimes flawed with outdated or inaccurate information, real estate listing sites have leveled the playing field providing an excellent starting point for any search. For buyers who are just beginning to explore the market, it makes good sense to visit Sunday open houses solo. But at the point that the search turns from a weekend shopping pastime to an earnest housing hunt, the aid of a professional guide is invaluable.
The sheer volume of Internet material, often overwhelming, can create confusion and unrealistic expectations. For data to have value, analysis, judgment and perspective are required. Experienced brokers can connect these dots, serving to evaluate and interpret information, sharing particular knowledge about specific buildings and neighborhoods, co-op boards and new construction developers, ultimately offering insights about choices and resale possibilities.
The financial consequences of purchasing a home are too high to be cavalier. For most consumers, it’s not only their biggest and most important acquisition, but also a pivotal life event representing a significant portion of net worth. More often than not, the process is elevated on life’s stress meter and can be fraught with emotion and anxiety.
Experienced brokers, armed with discretion and diplomacy, are well-versed in the psychology of buying and can ease stress and lend emotional support. Expert strategists and negotiators, they appreciate the timing of negotiations and know how to step up or slow down the process and how to prioritize and identify areas for flexibility and compromise. All too often, unrepresented buyers find themselves at a disadvantage lacking the distance required for the give and take of bargaining and allowing ego to get in the way of the desired outcome.
While buyers may surmise they might shave a portion of the commission by going directly to the Seller’s Agent, the truth of the matter is experienced Seller’s Agents prefer to do business with other experienced dealmakers and not directly with unrepresented buyers. Relationships with other brokers are more important in the long term than the short term single transaction with a direct buyer.
Additionally, it takes a seasoned professional to address the multitude of challenges presented by a co-op board review. More than just completing an application, the board package is an artfully prepared presentation of the buyer in the best light possible. From the initial letter of introduction, it builds a logical case clearly of the purchaser’s financial wherewithal with easy to understand back up documentation and with strategic and well written reference letters that articulate why the applicant will be a good addition to the cooperative’s shareholder roster. For buyers of new construction, there are additional layers of complexity that require wise counsel from an experienced agent.
As the transaction’s point person, the broker not only brings together but holds together all the players to keep a deal on track. Because of strong working relationships with resources such as lenders, attorneys, designers, architects, contractors, and movers, these agents are in a position to call in favors expeditiously. Adept at anticipating and overcoming obstacles, experienced agents pay close attention to calendar dates noting especially when a mortgage commitment is due to expire, or when a contract might be cancelled because a co-op interview has not occurred 30 days after the contract’s expressed close date.
Recent figures from NAR show that 88% of buyers nationwide purchased through an agent, a statistic that has increased steadily from 69% in 2001. While local data is not available for New York City, one of my own recent Open Houses for an Upper East Side property attracted 34 buyers in a two hour period: 62% were represented by brokers, but 38% were navigating the market solo; some just starting their searches but others deep into the hunt and seemingly unwilling to hire an agent. Without the advocacy of professional agency representation, pressures can mount, negotiations can be compromised, time wasted, and opportunities missed. More often than not, the buyer who goes it alone is shortchanged.