You've been working with a real estate broker and finallyafter seeing a dizzying array of apart-
mentsyou've narrowed down your search to two beautiful co-ops in two very different but equally fabulous neighborhoods. You and your husband are unable to make a decision because you love both apartments. Each has something that the other does not. Since the only alternative would be to flip a coin, you tell your broker you'll need a little more time to think about it.
If you think you detect a slight trace of annoyance in your broker's voice, you may be right. But is she correct to think that you're indecisive? And how many times can a buyer reasonably request to see an apartment before placing a bid? These are just some of the questions that might come up if you're involved in buying or selling an apartment. While the answers may vary depending upon whom you ask, there are certain established guidelines that can assist both buyer and seller.
The Broker-Buyer Relationship
If you've decided you'd like to purchase a co-op or condo, a real estate broker can help simplify your apartment search by identifying properties that fit your needs and budget and by providing important information about neighborhoods, schools, shops and the local real estate market. The broker will take you to see various properties that meet your criteria at a time that's convenient for you. During the buying process, he or she will provide contacts at banks, attorneys, appraisers, inspectors and other professionals whose services you may need. The broker should also explain the buying process to you and help you estimate how much your closing costs will be.
Kay Brover, executive vice president of the Manhattan-based real estate brokerage firm Douglas Elliman and the director of sales at the firm's West Side office, suggests that your broker should help qualify you as ready, willing and able to sign a contract, put down the deposit money and obtain any necessary financing. If the broker is not doing it for you, Brover says, it means they haven't done their job, and you'll need to qualify yourself. Either way, you and the broker should both know about any bad credit or other financial obstacles well before the contract is signed. Finding this out on the twelfth hour is a waste of time.
Seeing What's Out There
You don't have to go see everything your broker calls you about. And if you have a clear idea early on about the price, size, location, amenities, architectural style, age and any other criteria that are important to you, he may be able to provide insights into the market. We knew what we wanted, says Patricia Palmer who, with her husband, recently bought a three-bedroom co-op on the Upper East Side. But we couldn't find it. We were under the impression that in our price range we would be able to stay on the Upper West Side and buy a classic six or seven in a doorman building on a high floor with a nice view. We had a rude awakening when we realized we would have to pay considerably more to get all the features we were looking for. We decided to lower our expectations a bit and this put more constraints on our search. Eventually we realized there was more product that met our criteria on the East Side, and this is where we focused all our energy.
While there's no limit to the number of times a buyer can see a property ffb before placing a bid, you do run the risk of losing the apartment to another buyer who has already made up his mind. The people who are buying today are focused, explains Christopher Havens, a broker with Ashforth Warburg, a real estate brokerage firm in Manhattan. The hesitant can't compete in today's market because they're competing with people who have a lot of money and a lot of desire. If you want to compete, you've got to be focused. Hearing people say, M-Oh, I'm not in any hurry,' is a turn-off to brokers.
A focused attitude is just one ingredient in a successful buyer-broker relationship. According to Havens, the buyer should also be straightforward with the broker about talking to other brokers. I think there's a loyalty there, adds Havens. If you've been working with one broker, and then you hear about something at a cocktail party or from another broker, take down the information and call the broker with whom you've established a relationship. More than likely he'll be able to get you in to see the place. At least let him have a shot at it for 24 or 48 hours.
The Broker-Seller Relationship
If you're selling your apartment, a broker can help. The broker's fee is generally six percent of the sale price and is paid for by the seller. In return he'll be available at all timesespecially on weekendsto show your apartment, help you price your property according to the market and give you advice on how to prepare your home to look its most appealing. The broker will also screen prospective buyers to make sure they are financially qualified to make the purchase.
My feeling is that the broker does the legwork that generally the seller doesn't have the time or inclination to do, says Mihal Nahari, who recently found a buyer for her Turtle Bay condo. My husband and I work full time, and we weren't willing to give up our evenings or weekends to show the place. We needed someone to be around when we weren't. We had an open listing, so a lot of brokers showed our apartment at times when we weren't available. It wouldn't have been feasible for us to sell the condo without a broker.
Choosing a Broker
Since you'll be spending quite a bit of time with your broker, you'll want to select an individual with whom you feel a sense of rapport and trust. It needs to be the right broker; someone who matches you, explains Suzanne Hoglund, who worked with Douglas Elliman's Jeffrey Feuer for eight months before purchasing her Central Park West co-op. After a couple of visits to apartments he got an understanding of what we wanted, so he didn't take us on long chases. When we found a place we liked, he helped us feel comfortable with the price we offered. He had his finger more closely on the market, and was able to pull up closing costs for comparable apartments with similar amenities.
In addition to the broker's credentials, look for a firm that has a solid track record and an excellent reputation. Before you and the broker begin working together, you'll need to define the type of relationship you'll have. In 1991 New York enacted legislation that requires real estate agents to disclose to consumers whom they are working for in the various situations that can arise, explains Richard Grossman, vice president of sales at Heron Ltd., a real estate brokerage firm in Manhattan. Have your broker explain the differences between a seller's broker, a buyer's broker or a dual seller/buyer broker and go over the details of each arrangement with you.
Find out how long the broker has been in real estate and what kind of residential experience he has, advises Sheri Safier, a broker with Westwood Metes & Bounds in West Hurley, New York. Will he do direct marketing? Where will he advertise and does he have access to the latest technology?
According to Safier, a buyer referral network is a useful resource because it allows buyers from all over the country who are relocating to your area to gain information about your property. For instance, when Safier has a buyer who's relocating to another part of the cou ffb ntry, she selects a broker in that area from a directory of network participants. She then calls the broker with information about the buyer, and the distant broker contacts the buyer directlythrough faxes or the mailwith information about available properties that meet his needs.
Another popular marketing tool that's widely used throughout the country, but not in Manhattan, is the multiple listing service (MLS). With the MLS, all available properties are listed in a big book that buyers can look through at the broker's office. It's definitely advantageous to the seller, says Safier, because their property is being handled by a network of brokers who will share the fee; so everyone wants to get the property sold. In areas where there is no MLS, and people are giving a listing to more than one agency, the agencies are competing and keeping their listings a secret. Buyers don't have access to all the properties available.
Exclusive or Not?
Throughout the country, including Manhattan, the seller has the option of making an exclusive agreement with one broker. This is a popular arrangement that involves a contractual agreement between the seller and the broker whereby the broker is given a defined period of time (anywhere between three months to a year or longer) in which to market and sell the apartment for a specific price. By giving one broker an exclusive, he or she is guaranteed at least part of the commission. That broker becomes the listing agent who will be committed to marketing and advertising your property. But it does not preclude other brokers from showing and selling the apartment; it just means that the commission will be split between the exclusive broker and the selling broker.
According to Elizabeth Stribling, president of Stribling & Associates, a real estate brokerage firm in Manhattan, The exclusive is beneficial because it provides a ringmaster; someone to coordinate all the different comments that buyers will bring to you. This is the real key to a successful sale. We arrange detailed progress reports for the seller that even include information about other apartments coming on the market. Stribling adds that with an exclusive broker, the seller doesn't operate in a vacuum, because the lines of communication are open. What's more, the exclusive broker will help the seller negotiate the highest price for the apartment.
A Long-Term Friendship
If all goes well, the business relationship with a broker sometimes evolves into a social relationship. We're friends with our broker now, says Palmer. She had a very gentle approach and we liked that. She seemed genuinely concerned that we get the right apartment. At one point we were tempted to place a bid on an apartment that was a bit out of our price range. Believe it or not, this broker told us, M-I don't think that's the right apartment for you. You would be overextending yourselves.' We have recommended her to other people.
Ms. Mosher is Associate Editor of The Cooperator.