Choosing a Broker
As you might expect, in today's economy, both sellers and their real estate brokers are very eager to make deals. A buyer should always be aware that the seller’s broker represents only the seller and has a fiduciary duty (that is, a duty of trust) to the seller and not the buyer. Buyers, therefore, should never rely on oral representations made by the seller's broker as to the physical or financial condition of the apartment or the building. Alternatively, brokers can also represent only the buyer, and at least theoretically, have a duty of trust only to the buyer. Even though the buyer is represented by his or her own broker, the commission is paid by the seller.
The Process Begins
Although many people still comb the real estate section of the Times on Sunday, new technologies dominate the process. The Internet is the starting point for most folks looking for an apartment. It’s through that process, that buyers meet brokers and apartments get “shown”. There is no true multiple listing of apartments in Manhattan, but the inventory available can be known after spending a few days reviewing the listings of the big brokers and the smaller firms. The Internet dominates the process.
After the Offer is Accepted
Once an offer is accepted, the attorneys will go about the business of negotiating the contract and completing due diligence. Once the contract is signed, the brokers will play a major role in getting the buyer “approved” by the Board. The extensive purchase application package requires financial disclosure and references and a number of other goodies. The buyer’s broker will assist the buyer with putting the “package” together, so that it has the right tone for the particular co-op or condo. There is no question that there is a skill to Board packages and many brokers are quite good at putting the buyer in the best possible light. Unfortunately, that is not always the case. When the buyer does not have a broker, and the buyer is relying solely on the seller’s broker, the willingness to assist with the Board package may not be as great as with a buyer’s broker. In other cases, the broker is sloppy, uninterested or just plain out to lunch. How the Board package looks when it goes to the managing agent can save a lot of time and can make a huge difference in how the Board perceives the potential purchaser.
Know Who You're Dealing With
Like everything else in life, getting references before you select a broker is extremely important. There are many knowledgeable and experienced brokers out there, who are a pleasure to work with. On the other hand, there are other brokers that should be avoided at all costs. Some vampires feed on money, not blood, so keep some garlic handy.
I can't emphasize enough how competitive the New York market is among brokers. Considering that New York is still recovering from the nose dive of 2008, there is a heightened urgency to get the deals done that are slowly coming into the pipeline. Make sure you know who you're dealing with or at least know someone who does.