SEEKING ADVICE: Getting a RE license to sell my co-op in NYC
Sunnyside, NY · Member since 2017 · 28 posts · 8 votes
SEEKING ADVICE: Getting a RE license to sell my co-op in NYC
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This is a co-op and so just because a buyer can afford the apartment doesn't mean they can get board approval. You have to know how to vet buyers and be comfortable parsing through assets and liabilities, determining debt-to-income ratios, etc. You yourself will need to be comfortable reviewing buyers' tax returns, bank statements, etc. There are also nuances to how to successfully frame applicants who are atypical but still qualified.... self employed, getting gifting, co-purchasing, etc. Putting together a board package isn't rocket science but it doesn't make sense to most who are not familiar with them. I'm amazed at how many errors I see coming from even "experienced" buyer's agents.
Then there's the practical side of how you will be able to show the apartment to potential buyers, hold open houses, prepare the unit for sale, etc. Yes, you can sell and even do a closing from out of the country (via power of attorney) but you won't actually be able to sell it unless you have boots on the ground. Oh and once you're licensed, you can't have a non-licensee hold open houses for you as that would then be the unlicensed practice of real estate. As a real estate licensee you're held to a higher standard.
The state exam must be done in person in NY.
You're assuming incorrectly that you can get licensed and save yourself 6%. The market in Manhattan has softened and it's gotten a lot harder to get deals done. Prices have dropped in many segments of the market and inventory has reached the highest level in several years. The majority of buyers are now represented by buyer's agents (whether they have consciously decided to work with one, or have been unknowingly paired with one through the many online portals). Those buyer agents expect a commission split or they will not show your apartment. Then there's your sponsoring broker (you need to be sponsored by one) who will take a cut as well. Then there are the costs to being sponsored: annual local board fee (REBNY in Manhattan), e & o insurance, tech fee, possible desk fee, etc.
If you really want to be an agent and have been thinking of switching careers or trying it out part-time then by all means get licensed, but this really doesn't sound like the right first deal. Is it possible? Yes. Is it more likely you'll net less than if you work with an expert? Most likely.
15 Replies
- Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes7y
@Jinyu Shao - typically the 6% is split between the sellers agent and buyers agent, so you would save about half of the commission. Additionally, to market it on the MLS you need to be a member of the local board and start up fees are usually a few thousand dollars plus the cost of schooling and exams.
License laws vary by state but you can usually represent yourself in a transaction, but you cannot represent the buyer as well. Being local depends on how you can provide access, if the property is vacant and on lockbox or the tenant can provide access then your presence will be limited. You would need to figure out how to do showings and coordinate access for the inspection.
75 hours of classes and a few thousand dollars in fees just to do one transaction doesn't sound like it will be worth it
Second City Real Estate4.821 Reviews In addition in NYC, you need to be sponsored by a Real Estate firm after you pass the exam. And they charge you to work for them. Without a firm you will not have access to marketing channels ( and even then you may need to pay for the marketing for each listing). If you just want to sell one unit, they may be less interested in working with you.
While it is rarely done in NYC and will probably yield a lower result, of course you dont need to use a broker at all, you can just put ads in newspapers, craigslist etc "for sale by owner"
- Rental Property Investor · Member since 2019 · 407 posts · 267 votes7y
I'm going to echo what @Brie Schmidt said. It doesn't make sense to get your licence for one transaction.
Even more importantly, hiring an experienced broker who knows what they're doing will likely put more money in your pocket anyway!
Competent professionals are worth paying for.
This is a co-op and so just because a buyer can afford the apartment doesn't mean they can get board approval. You have to know how to vet buyers and be comfortable parsing through assets and liabilities, determining debt-to-income ratios, etc. You yourself will need to be comfortable reviewing buyers' tax returns, bank statements, etc. There are also nuances to how to successfully frame applicants who are atypical but still qualified.... self employed, getting gifting, co-purchasing, etc. Putting together a board package isn't rocket science but it doesn't make sense to most who are not familiar with them. I'm amazed at how many errors I see coming from even "experienced" buyer's agents.
Then there's the practical side of how you will be able to show the apartment to potential buyers, hold open houses, prepare the unit for sale, etc. Yes, you can sell and even do a closing from out of the country (via power of attorney) but you won't actually be able to sell it unless you have boots on the ground. Oh and once you're licensed, you can't have a non-licensee hold open houses for you as that would then be the unlicensed practice of real estate. As a real estate licensee you're held to a higher standard.
The state exam must be done in person in NY.
You're assuming incorrectly that you can get licensed and save yourself 6%. The market in Manhattan has softened and it's gotten a lot harder to get deals done. Prices have dropped in many segments of the market and inventory has reached the highest level in several years. The majority of buyers are now represented by buyer's agents (whether they have consciously decided to work with one, or have been unknowingly paired with one through the many online portals). Those buyer agents expect a commission split or they will not show your apartment. Then there's your sponsoring broker (you need to be sponsored by one) who will take a cut as well. Then there are the costs to being sponsored: annual local board fee (REBNY in Manhattan), e & o insurance, tech fee, possible desk fee, etc.
If you really want to be an agent and have been thinking of switching careers or trying it out part-time then by all means get licensed, but this really doesn't sound like the right first deal. Is it possible? Yes. Is it more likely you'll net less than if you work with an expert? Most likely.
- 7yBrandon CohenPro MemberReal Estate Agent · New York, NY · Member since 2014 · 160 posts · 45 votes
Posted this another thread so I figured I'd put it here to, which I see echoes everyone's sentiments :)
@Jinyu Shao granted I'm an agent, but I truly think this is a bad idea. If you're out of the country, you're going to need to pay another agent to show the apartment for you, handle the listing, marketing, open houses, etc. You're spending time and money to not only get your license, list, advertise, but then you have to find a broker who will hold your license only for you to sell your apartment, and that broker will require a commission as well. Like my clients and others who use agents as well, you'll find that a good agent is worth every penny. With all that said, you could still sell as for sale by owner but will still need the above.
1) Can I represent myself to sell my co-op in NYC? (I know it's possible in some states, not sure if it's the same in NYC) - Yes you can. You just have to disclose that you are the owner.
2) Can I do so while residing and working in a different country? (I can fly back for closing or other events that requires my presence) - Yes, though you don't even have to be at closing...you can grant power of attorney or pre-sign documents.
3) If both of the above are okay, when do I need to be physically present? - showing, open houses, broker tours, etc. or pay someone to do it for you.
4) Once I take the class online and pass the exam, what's next before I can represent myself to sell my property? - find a broker who will hold your license for you, though they're going to require fees from you and part of the commission.
@Jinyu Shao
You’re selling a Coop, finding an experience Realtor that’s familiar w your board and their requirements will make a world of difference and is worth the fee. Rather than trying to save on the 3 or 6% realtor fee try to find a realtor that’s experience buying and selling in your Coop..
- Real Estate Agent · Jersey City, NJ · Member since 2014 · 55 posts · 21 votes7y
@Jinyu Shao you could also list it by yourself but that still carries the responsibility of showing it. You’ll still need to pay a buyers agent and you’ll still need to understand the process. Depending on the cost of the apartment you might now save any money at all. Traveling back and forth can cost quite a bit. You should consult with an agent before making the decision that you want to save money. The last I checked, time is money too.
- Sunnyside, NY · Member since 2017 · 28 posts · 8 votes7y
Seems like everyone agrees it's a bad idea to try to sell the co-op myself. There were many aspect of this process that I had no considered like fees for the broker. Really appreciate the input!
The property is at Murray Hill in Midtown Manhattan, would love to receive some recommendations if anyone knows a good agent in the area.
Thanks again!
- Sunnyside, NY · Member since 2017 · 28 posts · 8 votes7y
@Seth Ferguson @Brandon Cohen Thanks for answering. I do have an agent whom I have spoken with a few times about working together. She lives in the building and is familiar with the board. I'm hesitant to work with her because although she's experienced and had sold many properties in the building, she seems to be selling many other properties as well and I don't know how much time and effort she will put in to negotiate for me on my property as its value is on the lower end of the property she usually sell.
Would you be able to share some advice on how to choose a good agent?
- Sunnyside, NY · Member since 2017 · 28 posts · 8 votes7y
@Jason Lee Thanks for the insight. You mentioned that the Manhattan market has softened. Do you have any advice on how to accurately estimate the value of my co-op? I have found in my experience working with agents in the past that some of them prioritize a quick sale rather than trying to negotiate more value on behalf of the seller. Do you have any tips on how to avoid that as well?
A good agent can accurately estimate the market value of your apt using recently sold comps, in contracts, and currently available inventory. They will then make any adjustments for time on market, condition, floor, size, exposure, light, views, etc. I live in Midtown East and do a lot of work there and happy to give you an estimate.
Look at an agent's current and past exclusive listings. Do the photographs look like they show the apartments in the best possible light? Were they staged? Were they at least decluttered? Are the listing descriptions thoughtfully written? If they're not doing a great job up front presenting an apartment then they're probably not going to go above and beyond later on. Ask a prospective agent for examples of how they were able to net their sellers the absolute highest sales prices. A good agent should have examples of how they set a building's price record or ppsf record, or a record in a particular line, or how they took over a listing that wasn't selling and got it sold quickly, etc. Ask for references from prior seller clients.
- 7yBrandon CohenPro MemberReal Estate Agent · New York, NY · Member since 2014 · 160 posts · 45 votes
@Jinyu Shao @Jason Lee said it all very well.
my best advice for picking an agent is to make sure that you trust them, you should feel confident that they are properly representing you and trying to get you the highest price. Also, if you’re hiring on a team, make sure you’ve met the person who will be responsible for showings/open houses/etc. Often times you'll hire a team lead and then they disappear.
- Rental Property Investor · Member since 2019 · 407 posts · 267 votes7y
@Jinyu Shao There is a really good book (shameless plug) entitled "Sell For More: How to Sell Your Home For Maximum Value in Any Market" that walks you through the entire process. In the US, you'll find it on Amazon.
- Rental Property Investor · Brooklyn NY · Member since 2018 · 263 posts · 469 votes7y
@Jinyu Shao - Is there any way you can keep it with positive cash flow? If you do not need the money, it might be worth holding.
- Rental Property Investor · Long Island, NY · Member since 2015 · 490 posts · 301 votes7y
@Jinyu Shao Honestly this sounds like a lot of work and a lot of money if all your doing it for is this single transaction. Don't forget you can also try to sell FSBO (for sale by owner) if you want. A better idea might be to use a discount broker that charges 2.5-3%. Then again a regular broker might be better as they can use their expertise to leverage better offers. You can always bargain then down to 5% for sure I've never in my life paid 6%. So I'd talk to some brokers get an opinion as far as value and take it from there.
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