As a real estate broker, this is a question I have been asked on several occasions, when a buyer was seeking representation by a real estate agent to purchase a property. And the question has been posed by first time buyers as well as those looking to sell and then buy another property. Even if it is not your first time purchasing, you may not recall how the fee structure is commonly paid or by whom. Perhaps you inherited a property, but never went through the home search process or you bought from a neighbor or landlord, and there was no agency representation involved.
So, I thought it would be valuable to explain to prospective home purchasers what is the value of having representation and what they can expect to pay for the service. Now, how does working with an agent benefit you? In NYC, I think most people would agree that time is the most valuable commodity, and working with an agent will save you ALOT of time. Successful and seasoned agents will have the opportunity and insight of closing many transactions in a given year, and they will use that experience to help you navigate an ever changing market while making you a more informed and therefore competitive buyer. Most buyers on closing day are relieved to have the experience completed. It can be a stressful and exhausting couple of months or even years, and in NYC in particular, it is complicated. There are so many different types of property and issues that can arise during the transaction, and having a good agent will assist you in avoiding the pitfalls and solving the problems that inevitably surface.
Furthermore, an agent will be there through every step of the transaction, to connect you with the right mortgage agent to arrange the necessary financing, putting together a strong offer package to be competitive in the market, negotiating price and terms of the sale, selecting a capable attorney to represent you, and preparing you for closing. A few qualities I would recommend in an agent are being knowledgable about NYC real estate and its market, available and ready to arrange showings around your schedule, accountable by being prompt and honest in all transactions, and hardworking and therefore eager to search for the right property until it is found!
And now that you have a better understanding of how an agent will benefit you as a buyer, what should you expect to pay a qualified agent, and really this is the best part! Traditionally, the commission is negotiated between the seller and their listing agent, and this provides for compensation to both the listing and the selling agent. So as long as you are working with brokerages which are cooperative and co-broke with another, you can expect for the fee to be paid by the seller. Now, there are instances where a home seller may be selling without representation, which your agent will then need to negotiate their fee with the seller or build it into the offer, or you can choose to ignore listings where the seller is not paying the fee. Many of these tricky situations will be discussed up front with your agent, so that you’re not surprised or confused during the process, and together as a team you will decide the best way to handle them by knowing all of your options.
Ready? Set.. Go! Happy house hunting!