The High Road: I broke every smart broker’s rule

(Flickr photo by litherland)

I have no one to blame but myself after I took on a new buyer.

Cindy is an acquaintance who e-mailed me one Friday saying that she was toying with the idea of moving out of her nearly $4,000-a-month rental to purchase an apartment on the Upper West Side.  Could we chat sometime? she asked.

I spent a couple of hours with her the next day explaining the process to someone who had lived overseas for decades and, like any first-time buyer in Manhattan, knew little about co-ops and condos, let alone what she needed to do to buy one.

It was a good conversation, in the course of which I went on at some length about steps that Cindy hsf to take to obtain a mortgage, retain an attorney and make an offer before going to contract.

She indicated as we talked that there was some urgency to get moving because

Agents don’t sell homes. Buyers do it themselves.

Bill Gassett

In no uncertain terms, Massachusetts real estate agent Bill Gassett declares in a post he wrote that “accompanied real estate showings do not sell homes.”

I am inclined to agree with him about the practice, in which the listing agent requires her or his presence when a buyer’s broker shows a property.  Says Gassett:

There is a long standing misconception amongst some people that Realtors “sell homes”. It may come as a surprise but

Weekly Roundup: ‘Insane’ market, rising prices, pronounced seasonality, surging sales, wasted electricity, 65,000-acre Quebec spread. . . more!

Next Weekly Roundup April 5

Bidding environment now ‘absolutely insane’

Contract activity soars above prior years, thereby confirming both item above and my Wednesday post

Prices soar 11 percent from January 2012

Prior to usual seasonal increase, February rents in Manhattan

Weekly Roundup: Renters, new market stats, dropping loan rates, foreclosure purchase risks, credit misconceptions, kitchen trends, and more

Renters don’t stay put for long in the financial district

New York magazine explores world of platonic urban cohabitation i.e. roommates

Housing signals mixed in metro region

Four things to bear in mind when buying an apartment for your kids

19 percent more building permits issued in 2012 than in prior year

Committee ranks Upper East Side tops for kids, Bay Ridge beats all other Brooklyn neighborhoods

Request for proposals to redevelop Lower East Side sites signals end of bitter renewal squabbling

Foreclosures in region higher in December than a year earlier

Estate in the Hollywood Hills finds friendly buyer but at greatly reduced price

Legendary rocker

Why not become a part-time broker?

See you in the new year. . . Happy holidays!

One of my favorite posts.

Someone told me a few days ago that she was thinking of becoming a real estate broker part-time.

“Don’t,” I said unhesitatingly.

Even if she has a wide social network, there is no way she can succeed.

There are two–make that three–kinds of brokers

The broker community extends to the ends of the earth — and the Internet. (Flickr photo by Ravi Karandeekar)

There are brokers who prefer to represent sellers and those who are inclined to help out buyers.

It is folly to generalize, of course, but I’ll give it a shot.

Those who lean toward sellers seem to ally themselves with

Brokers face stiff competiton. From lawyers.

(Source: Library of Congress)

Some buyers and sellers may not realize that brokers aren’t alone.

State law allows lawyers to collect commissions — without having a real estate license — though they cannot employ other salespersons to work under them unless they do obtain a license.

However, lawyers may not automatically charge a commission.  They must have a signed agreement with whomever they are representing or an agreement with the listing broker.

At the same time, lawyers may not double dip.  It is a conflict of interest for a lawyer to act as both attorney and real estate broker in the same transaction.

Interestingly,

This was not the liveliest showing of my career

SUMMER DAYS DRIFTING AWAY

One of my favorite posts.

In an online piece that turned up yesterday in the Real Deal, a clutch (flock, bevy, herd?) of brokers related some horror stories from open houses, among them:

• “How about a five-year old breast-feeding?”
• “A half-naked, sleeping couple.”
• “When the listing broker invited my client and myself into an open house, showed us around the apartment and when we go to the master bedroom, the seller and his girlfriend were in bed — awake [and] reading the paper [with] no clothes on.”

Such accounts are demonstrably livelier than mine, which concerns an experience I had a few years ago

The Economist asks why commissions are so high

“Why is it so expensive to buy or sell a house in America?” the Economist magazine recently asked.

According to the magazine in its unsigned piece, the short answer is greed.

It reports that my British counterparts charge just 2-3 percent of the sale price to “list the property, find a buyer, help you negotiate a deal and guide you through the transaction.”

Forget that here, the Economist says in its article, titled “The great realtor rip-off:”

The demise of the 6% commission may still be inevitable. But for now, it seems a long way off.

According to the magazine, one theory

Listing agreements do allow for some negotiation

When Teri Karush Rogers of BrickUnderground.com asked me to write a post about how to negotiate a listing agreement, I leaped at the invitation.

With cold fear.

My concern was how other brokers might react to my disclosure of our vulnerabilities — the best way for a seller to negotiate a lower commission than the one that the listing broker proposes.

Happily, if anyone objected to what I revealed, I haven’t heard of it.  Perhaps that’s because