Should brokers give it away free?

If you don't ask, no one needs to tell. (Flickr photo by cbsparklane)

Like physicians or lawyers at a cocktail party, real-estate brokers can be handy targets for consumers who want free advice.

I’m sure I’ve been guilty of asking impertinent questions, too.  Everyone seems to handle them in different ways, and I know I don’t have a consistent response.

Sometimes, the person asking the question is considering which broker to hire to sell a property.  What the owner invariably wants to know is how much it is worth and for how much it should be listed.

Frankly, I don’t like to give that information away free, not when I’m competing against other brokers. Deciding on value and price is, as I have written, as much art as science.  While I’ll provide comparable statistics, I’m reluctant to leave them with the seller, though I’ve been known to do that (and known to have gotten burned).

As for enlightening the owner with specific amounts, that’s nothing more than offering gratis my experience, knowledge of the market and expertise.  How many of you would do that with no assurance of compensation down the road?

Frequently, we brokers are consulted also by buyers seeking to purchase either directly from a listing broker (in the usually mistaken impression that doing so will save them money) or from a property being marketed as For Sale By Owner (FSBO).

I recall one instance a few years ago, after I moved back to the Big Apple from D.C.

A Washington Post reporter whom I used to help with her stories called me from Manhattan.  She was moving here to work on a big daily newspaper and wanted to pick my brain about an apartment that it happened I had seen.  She also wanted to buy directly from the listing agent.

I gave her all the information I had–and never heard from her again.

I was conversing with another broker about this issue, and his practice, he said, is always to cooperate with someone asking for free information.  He said it invariably pays off.  Maybe, maybe not, but that’s why I tend to be helpful more often than not.

What brings this matter to the fore was an e-mail I received recently from someone I don’t recall knowing.  Let’s call him Seth.  Following is his slightly expurgated e-mail:

Just trying this on a whim – since your newsletter has such great info and i have always enjoyed reading it – we are contemplating a FSBO co-op on the UWS – and since the seller refuses to pay a broker, we are having to sort thru what is reasonable on our own etc.. if you could give me your 30 second reaction to whether we should pay 730k, it would be great-

in a nutshell, the current owners bought in 12/2006 for 730k and now want 730k to seal the deal – its a small post-war bldg but on a great street – top floor, between Columbus and Amsterdam, but has great floors and a woodburning fireplace but on the flip side the bathroom is dated, gold fixtures, etc. and the kitchen appliances are on the cheap end. Also, they divided up the living room and made a nursery but we would likely tear the wall down and open the living room back up…

heres the listing [omitted] – any 30 second thoughts on whether we are foolish to pay 730k and thus the same price as 12/2006 with no significant renovations having been done at all, etc.

Any brief thoughts would be great as we are not able to go to a broker given the situation.

Thanks, Seth.

Mind you, we’ve never met and he says the seller won’t pay a commission to a buyer’s representative.

But I did click on the link and discovered more than one error.  First, the seller’s purchase was in 2007, not 2006.  And the asking price at the time was lower than the seller purportedly paid, so I doubt that $730,000 is the correct amount and haven’t tried to check.

Most important, the listing says that the seller welcomes buyer representation.

I sent Seth a short response, indicating the conflicting facts and suggested that he call me.  Depending on how that call went, I even might have been inclined to give it away free.

I’m still waiting for that call.  If his e-mail hadn’t given me grist for another post, I’d really be steamed.  But I think the issue he has raised is well worth airing.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
Web site

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