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How to Buy

A New York City Apartment

While the vast majority of NYC homes are represented by a listing agent (FSBO—or For Sale By Owner—listings are relatively rare in NYC) whose 5-6% commission is paid by the seller (and then split equally with the buyer’s agent if there is one), buyers do not have to pick one real estate broker with whom to work exclusively, nor do they have to work with one at all.

Some buyers fly solo and deal directly with the seller's broker because they believe it gives them an edge in a competitive bidding situation. They theorize that because the seller's broker won't have to split a 5% or 6% commission with a buyer’s broker, the seller's broker may subtly or not so subtly encourage the seller to accept their offer.  In a less competitive market, some buyers choose to work directly with the seller's broker in order to ask the seller's agent to kick in a percentage point of the commission toward the purchase price.

Whether most buyers successfully wrangle that extra percentage point is unclear. Moreover, as this New York Times article explains, working directly with the seller's agent--whose loyalties are divided between buyer and seller--is a bad idea in pretty much every other way. Among other things, you won’t have a real advocate during contract negotiations, and you may not hear about problems with the apartment or the building or resale potential.

ProTip: To reap significant savings while retaining the most vital services of an unbiased buyer’s agent...

...consider working with a brokerage that will rebate some of its commission if you do some of the legwork on your own. Prevu (a Brick Underground partner) will handle pretty much everything, including, scheduling viewings, determining comps, preparing the offer, negotiating with the seller, and assembling the board package you’ll need to prove your worth (literally and figuratively) to a co-op or condo board. As a participant in Prevu’s “Smart Buyer” program, you’ll pocket a rebate of two-thirds of the commission paid to the buyer’s broker at closing.  On a $1 million condo with a 6% commission (3% paid to the seller’s broker and 3% to the buyer’s broker), the rebate equals 2% of the purchase price…a not-too-shabby $20,000.