I come to you with a question. Should I get myself a buyer’s agent to help in getting me a better deal? Let me explain my situation. I live in New York and have found a mixed use building up for sale. The first floor is a store front and the top floor has two apartments. It seems like a great investment opportunity however, I have been talking with the selling agent myself. My concern is that I don’t want to be “low balled” or miss something on the deal, especially since this would be my first property. So, do I need an agent looking out for me and negotiating my deal? Can I do it myself and if so, any suggestions on what I should be aware of?
Get an agent.
Dual agency is legal in New York, and it's sweet for the agent (because the agent can double side the commission), but it's really not the best situation for a buyer and a seller.
Dual agency requires you to give up some of the fiduciary duties that an agent owes to you - so you're really getting diminished service by using the seller's agent in the same transaction.
At a bare minimum, ask the seller's agent if you can use another agent in his brokerage - that way at least you can keep all of the fiduciary duties intact.
@Jagpreet Singh I usually use a buyer's agent, however, not every time. When my usual agent is not available I will just have the seller's agent be my agent as well. I understand what @Blair Poelman is saying that you give up some of the fiduciary responsibility that the agent owes you, however, in a competitive buyer's market, it can be helpful to get more of a competitive advantage and if it comes between you and someone else offering on the same property and you are using the seller's agent, in my experience, you usually get the deal. Using this strategy has gotten me 4 deals in the last 3 1/2 years.
If you need to ask...then yes you should get your own agent
@Jagpreet Singh while you may be giving up some of the benefits of having an agent represent you, your deal is more valuable to the broker representing the seller, as he will make more commission from you than if you have an agent, which may incentivize him to push your offer.. Additionally, if you bring in an agent at this point, having already spoken with the seller's agent, you may need to pay your agents commission.
I'm not sure how you, as the buyer, would be "low balled", but if you have further questions, as a former Commercial Broker (still licensed, but not practicing), I'd be happy to offer some assistance.
@Shiloh Lundahl yep. there may be an advantage to having an inside track with the seller's agent, but dual agency doesn't always give the best result for all parties. It ends up motivating the agent by the prospect of getting more commission, instead of getting the best deal for their client.
It all depends upon the listing agent, If he is responsive and is professional, it is easier to deal with one agent. Just make sure you understand that the listing agent works for the seller not you. Whatever you disclose to him, he has a duty to tell the seller.
I would rather call up and deal with the listing agent directly. What value do you think a buyer's broker will bring to you. If you think the broker will educate you on values, then it may be a good idea. Ultimately, it's up to you to understand values and negotiate on your own behalf
Most of the time when people ask if they need a buyers broker, I think they probably do. If you feel like want someone experienced guiding you through the process and making sure you don’t slip up somewhere and look out for your best interests, then yes. Having said that, I also agree there are very often times where the listing agent might be more willing to do a deal with a direct buyer because they are looking out for their own interests. Are there multiple offers? Is there a best and final scenario? If there is then your offer accompanied by a buyer broker might be less attractive. Also, these days it’s not uncommon (in residential deals anyways) for commissions to be smaller if there is no buyers broker in the deal, making it more attractive to the seller if you have no broker of your own. If the property has been listed for awhile then they will probably be happy to get a deal done whether you have your own broker or not.
Also, just because you don’t have your own broker doesn’t mean it’s necessarily dual agency. The seller could remain that broker’s client and you could simply be the broker’s customer. In the former the broker has a fiduciary duty to both you and the seller, in the latter their fiduciary duty is to the seller and not to you. I just wanted to point that out since most are very confused by it and assume the listing broker always represents buyers that don’t have their own broker. That’s not true.
Lastly, in many parts of Queens, co-broking is the wild west. I’m an MLSLI member, which covers Queens. Many Queens listing agents offer a very small co-broke to buyers brokers or sometimes none at all. In those cases your broker will ask you to sign a buyers broker agreement in which you would pay their commission. Perhaps another reason to try to go it alone.
Bottom line, this is complex transaction and you don’t seem too confident. Coming on here for info is a good start but I'd suggest you talk to some experienced agents in the area that have done a lot of mixed use deals.
Won't you pay buyers agent commission on a commercial property? I say get a good specialized buyers attorney that's familiar with asset type and area. They can help with drafting offer and negotiations.
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