Gea Elika's Blog, page 114
July 3, 2018
Things you need to know before moving to NYC
If the only knowledge you have of living in New York comes from watching friends or Sex and the City you could be in for a rude awakening when you make the switch to living there. There’s honestly no other place like the Big Apple, but it can be a little overwhelming for those new to it. To help you prepare, there are a few things it’s helpful to know before making a move. Whether you’re moving to the city to start a new job or in search of an incredible adventure, here are seven things you need to know first.
1. You’ll need to (and will) get used to the noise
On first arriving, the noise is likely to keep you up for the first few nights. In a city that never sleeps there is an almost relentless crescendo of jackhammers breaking through the pavement, car horns honking like no tomorrow and unruly pedestrians shouting at the top of their lungs. Give it time. Eventually, a strange thing happens: it will begin to soothe you. But if in case it doesn’t you can always invest in a good pair of noise-canceling headphones.
2. Subway journeys can offer more entertainment than any show on Broadway
The NYC subway can be far from pleasant at times with frequent delays and overcrowding at rush hour. But it can also provide some of the fascinating experiences of living in NYC. You’ll see the whole of the city passing by along with a fair share of oddballs and nonconformists. Whether it’s two total strangers having a saxophone battle or a Buddhist monk chanting sutras, time on the subway always offers something unique.
3. It’s pronounced House-ton, not Houston
There’s no faster way to mark yourself as an outsider than to mispronounce Houston Street. Don’t make the mistake of pronouncing it like the city in Texas. This might seem trivial, but Houston Street is a crucial point of reference when traveling through Manhattan.
4. The pizza and bagels truly do live up to the hype
Pizza and bagels are almost as synonymous with New York as the Brooklyn Bridge and Lady Liberty. After trying your first bite, you may discover a lifelong love affair. You’ll find pizza shops all throughout the city and with many places charging only $1 a slice you may soon want to consider a gym membership. Speaking of which…
5. You will do a lot of walking
The Subway may be very efficient for getting around, but once at your stop, you’ll most certainly have a bit more to walk before reaching your destination. Distances in NYC are measured in blocks, not miles, and you’ll soon get used to walking a lot of them. Make sure you invest in a good pair of shoes with thick soles. The upside to this being that you’ll burn a lot of calories.
6. Personal space does not exist
If you’re not used to walking busy city streets, then it may take some time before you get comfortable with walking New York’s. An average day walking down a busy street will result in upwards of 10 people crashing into you. Instead of viewing it as a hostel act try and trick yourself into seeing it as a friendly gesture and go on with your day. Some days on the subway can feel like being inside a car compactor while nightclubs tend to be like a fun version of Black Friday. You’ll quickly find that almost no one in New York pays any mind to the notion of personal space.
8. You’ll probably have to move at least three times while living there
Every neighborhood in the city is a little different, so it helps to do your research before choosing one to live in. Even with that, you may find yourself moving from time to time as your needs, tastes or expectations change. It takes a bit of time living in the city before you can tell what your ideal living arrangement and location is.
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July 2, 2018
Meet the Neighbors
It’s no secret that New Yorkers have the unfortunate (and undeserved) reputation for being unfriendly. Many people spend years living in the same building together without ever learning one another’s name. This anonymous state of affairs can make breaking the ice and making some introductions appear problematic and intimidating. Yet it needn’t be. Whether you’ve just moved in or have been sharing the building with the same people for years it’s all the same. Someone has to make the first step so why not put yourself out there. Who knows, you may even make a friend for life. Here are five creative and easy ways to meet your neighbors in NYC.
Be proactive
This is hardly groundbreaking but sometimes the most basic methods are ignored. A friendly smile and greeting at the entrance or hallway can be enough to put people at ease. This allows you to become a familiar face and makes it easier to talk with them next time you meet.
One resident in Cobble Hill made the rather audacious step of going out and meeting everyone in his building. He knocked on every door on every floor and introduced himself. To be expected, there were a number of no-shows, busy people and those with little interest in talking. Eventually though, he met some genuine people that were pleased to meet and invited him back (he also learned why those on the second floor wouldn’t talk to him).
Throw a block party
What better way to bring everyone together then to organize a block party. All you need do is get a permit from the city, spread the word and get planning. It will help a lot if you already know one or two other people in the building who can help with organizing and inform you of whether or not they feel the other residents would be receptive of the idea. You won’t know unless you try.
Make a little free library
If reading is a favorite pastime of yours this can be a great way to find out if others in the building share your passion. This website provides step-by-step instructions on how you can create a simple book exchange in your building. You could even take it a step further and sign the back pages of a favored book with your name and apartment number. This might even lead to a book club being formed.
Arrange a playdate
Kids are a great way to break the ice. Scope out the building and if you notice a neighbor with kids of similar age to yours, ask about an informal playdate. If the parent(s) isn’t busy or feels uncomfortable about leaving their child with a stranger, insist that they join as well. An hour or two of coffee and chit-chat while the kid’s play can be enough to cement a lifelong acquaintance.
Organize a potluck
If you have the space for it, offer to host a potluck at your apartment. If not, then there’s always the nearest public park. Any food lover in the building is sure to be interested and eager to contribute their signature dish. Just know that the key to a successful potluck is not the food but organization. As the host, you’ll need to be a little dictatorial in assigning dishes so there are no duplicates. What’s great about this option is that the food itself serves as an icebreaker, making conversation among everyone much easier.
Do you have any ideas or personal experiences to share from meeting your neighbors? Let us know in the comments.
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June 30, 2018
Moving to the NYC Suburbs: A Guide for Home Buyers
For many New Yorkers, cultural diversity, job opportunities, and endless entertainment options are what keep so many of them staying. But with all that also comes high real estate and rental prices. For those who can’t hack it anymore but wish to remain with a job, family or the city itself, a move to the outer suburbs could be the answer. Those in need of more space, lower housing prices or more quiet time at night will find all that and more in the suburbs. Whatever your reasons are for leaving the city for the burbs, there are a few things you first need to consider.
Decide what NYC suburb is right for you
The good news about any move from the city to the outer suburbs is that you have a lot of choices. Examine the reasons for why it is you’re moving, and you’ll know then what you’re looking for. If you’re planning on still working in the city, consider your commuting time and the access to public transport. Do you still want the hustle and bustle of city life? Then find a town where you have more things to do. If it’s peace and quiet you’re after, moving further afield to a smaller town is worth considering. The bottom line is, choose a location that suits both your personality and job requirements.
Research the tax situation as there can be variations from town to town
Escaping its steep taxes is undoubtedly a big reason for moving out of the city. But just know that the tax burden varies a great deal from one area to another and in some places can be quite high. In general, housing prices tend to be lower the further you are from the city. The downside to this though is that property taxes tend to be higher. For example, Westchester and parts of New Jersey have notoriously high property taxes.
It largely depends on the infrastructure and size of a town. For instance, Armonk has many businesses so the corporate tax offsets the property tax. As you evaluate the prices and location, don’t overlook the property taxes or you could be in for a nasty shock.
Closing costs will be lower outside NYC
You’ll be pleased to know that closing costs are substantially lower in New York State outside of NYC’s five boroughs. The reason being that while still subject to the NYS mortgage recording tax, you’ll be exempt from the NYC mortgage recording tax. This means big savings as your mortgage recording tax will go from 1.925% to 0.5% on mortgage amounts above $500,000.
You may even be able to completely forgo the mortgage recording tax depending on which suburb you move to. For instance, Connecticut does not impose a state mortgage recording tax. In addition, those making purchases of $1,000,000 or more outside the city limits can avoid the mansion tax.
You’ll have fewer financing requirements
If you’re already excited at the thought of lower closing costs, the news that you’ll also face fewer financing requirements may just seal the deal on a move to the suburbs. Mortgage approval takes far longer in the city thanks to the need for apartment appraisal and building approval. Not forgetting the board approval process either if you’re buying a co-op.
For a single-family house, so long as it passes the home inspection, you can expect approval in as little as 15 days compared to an average of 45 days for a property within city limits. It should also be mentioned that you can be allowed financing of up to 90% for many properties in the suburbs. Which is good news for anyone unable to meet the 20% down payment required for NYC purchases.
The post Moving to the NYC Suburbs: A Guide for Home Buyers appeared first on | ELIKA Real Estate.
June 29, 2018
Options for Dealing with a Low Appraisal
Your lender insists that you hire an appraiser to estimate the fair market value of the property. The appraisal is important to your bank since the home is the collateral backing the loan. It is not a simple matter in New York City since there are many factors.
Appraisers use their best tools to estimate the value, and they can come up with a different figure than you and your agent. There are times where it will be lower than your accepted offer, which presents a problem for your loan approval. However, there are certain actions you can take to rectify the situation.
Ask for a do-over
You can ask for a second appraisal from your bank. To do this, request your lender provide you with a list of approved appraisers. You want to make sure the new company is familiar with New York City’s market. Your agent can assist by providing the appraiser with recent comparable sales. Keep in mind that you likely need to pay the extra fee for another appraisal since buyers typically bear the cost.
Renegotiate
Typically, there is a mortgage contingency clause which allows buyers to get out of the contract without penalty if he/she does not qualify for a mortgage. This might prove a key negotiating point since the bank won’t loan you the amount based on your offering price. As a buyer, you can use this opportunity to revise discussions and obtain a lower price.
Naturally, sellers are resistant to take this step. You will need to show that the appraisal is not abnormally low but accurately reflects current market conditions.
Put more money down
The bank will only loan a certain amount based on the appraisal. However, you can still buy the apartment for the same price. After all, the bank is not interested if you pay more. It is only going to lend you a certain amount, though. The lender may cap the loan, but you can make a larger down payment. That way, the loan stays within the bank’s approved range.
There are a couple of caveats. Clearly, you do not want to overpay. Therefore, make sure your offer reflects the current market value, which your buyer’s agent can help ensure. Furthermore, if you are purchasing a co-op, check that you still meet the required post-liquidity requirement.
Challenge the appraisal
If you honestly feel the appraisal is too low, you can submit facts and figures that support your claim. The easiest is when there are factual errors, such as the number of bedrooms or square footage. You can also provide relevant comps, but you need to make sure these are recent and better comparables than what your lender used. For instance, a co-op unit has a different value than a condo, even in the same neighborhood. Units in the same building can have different valuations, depending on the size, view, and location. Still, this is not an easy argument to win.
Shop for another lender
You can always seek another lender, which conducts a new appraisal. This option presents several challenges, however. First, there is no guarantee that your new bank’s appraisal will come in any higher than your previous lender’s estimate. Second, you have to pay another appraisal fee. Third, there are other factors to consider, such as the interest rate and other fees. Fourth, your new bank may not approve of the building. Fifth, the seller may get spooked since you had pre-approval, and you are starting the process over. Lastly, your closing is likely to get delayed, further upsetting the seller.
Back out
If all else fails, typically you can back out of the deal without penalty.
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June 28, 2018
Knowing the Difference Between Real Estate Brokers and Agents
People often confuse the terms broker and agent. While they perform similar functions in the home buying and selling process, there are differences between the two. It is worthwhile to know what each entails to better understand his/her qualifications and what it means for you.
Real Estate Agents
While real estate agents encompass a broad category that includes brokers and salespersons, in practice people use the term to refer to the latter, specifically licensed salespersons. A real estate agent works for the broker and acts as his/her representative.
You need a license to become an agent. New York State imposes that someone completes a 75 hour, state approved, qualifying education course, and then pass an exam.
There are different types of agents, such as one representing buyers, sellers, or both (dual agent). The qualifications for each are the same, however. An agent cannot hold certain titles, such as president, vice president, senior vice president, or managing director since the state does not want people to think he/she holds a corporate position.
An extra level: Real Estate Brokers
A real estate broker is responsible for supervising the real estate brokerage business. If he/she holds the license for the brokerage, this person is known as the representative broker.
A broker has to have a certain amount of experience in real estate, and New York state has an application. The experience requirement is met either through two years as a licensed real estate salesperson or three years in real estate in another capacity (for instance, buying and selling your own properties or managing real estate). The state also allows a combination of sales and another real estate function. He/she must also pass the qualifying salesperson course and test, sit for another 45 hours in an approved broker course, and then take New York State’s exam.
The picture gets a little more muddled since associate brokers have the same qualifications as other brokers, including the experience and passing the exam, but he/she does not want to strike out on his/her own and works for the representative broker. This person is called a Licensed Associate Real Estate Broker. Agents might do this to gain extra knowledge, but he/she does not want the oversight responsibility that comes running the company.
Continuing education
Agents and brokers need to renew their licenses, which includes the completion of 22.5 hours of continuing education. This must consist of at least three hours relating to fair housing and discrimination, and one hour associated with the law of agency.
Should I work with the broker?
Generally, you deal with agents, which is fine. The most important thing is that you are comfortable with your broker or agent, and feel he/she is providing you with the proper expertise and level of service. The industry demands that agents meet a certain level of standards and ethics, which the broker will ensure.
At Elika Associates, we have a boutique real estate brokerage firm which allows a cooperative approach. Our principal broker, Gea Elika, works with clients and provide a high level of service. He also oversees five agents that have their own level of expertise.
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Renter’s Insurance 101
Purchasing renter’s insurance is a wise decision for anyone renting an apartment, but it’s especially necessary for residents in New York City. Because New York City has one of the most cutthroat real estate markets in the United States — if not the world — it’s essential for renters to protect themselves and their possessions. Between the threat of theft and potential damages, the New York City renter who doesn’t have insurance may find himself or herself in a very sticky situation.
Understanding Renter’s Insurance
Given that every homeowner needs homeowner’s insurance, it stands to reason that renters need insurance as well. The two aren’t that much different, after all. Renter’s insurance offers much of the same protection as homeowner’s insurance. At its base point, that’s what renter’s insurance is — protection.
The main difference is that renter’s insurance won’t generally cover the dwelling itself — that’s up to your landlord. That being said, if you make alterations to your rental property, your insurance may cover those things through liability insurance. The good news is that renter’s insurance does cover your own personal property. Your landlord has to take care of the home or building; that coverage won’t protect your personal belongings.
The Need for Insurance
Anything can happen in your home, whether you own or rent it. Just as you wouldn’t drive without insurance, you can’t live in a home without protecting your property. Renter’s insurance will cover damages caused by theft, vandalism, fires, or certain natural disasters. The liability insurance you receive with your policy can even protect you if you slip, fall, or otherwise, hurt yourself while in your rental home or on your landlord’s property.
Asking the Right Questions
You need to ask questions before you make an important purchase, including renter’s insurance. The fact is that some providers are better than others. Make sure you choose an insurance provider with a solid reputation. You have to trust them, or else you might end up left in the cold — literally. Before committing to any policy, ask these questions.
What’s covered, especially in terms of furniture, electronics, clothing, art, and other valuables?
Which perils does the policy cover, so you can make sure you’re protected against vandalism, fire, theft, smoke damage, explosions, water damage, and damages caused by natural disasters?
What will occur if you or someone else gets injured in your rental property?
Whom does your policy cover, such as in the case of roommates, long-term visitors, and pets?
Does your policy protect your belongings outside of the home?
How much does the policy cost?
What are the details about a provider’s reputation and experience?
The Importance of Comparison Shopping
Given the importance of your belongings and all the questions you have to ask, you need to comparison shop to get the best deal. You don’t want to sign with a provider in haste, only to discover that you’re paying far more than necessary. Take the time to choose a provider who offers everything you need at a price you can afford. You don’t want to get caught without insurance, especially in such a big, bustling city. Have you ever needed to make use of renter’s insurance? What was your experience like?
The post Renter’s Insurance 101 appeared first on | ELIKA Real Estate.
Renter’s Insurance: What You Need to Know
Purchasing renter’s insurance is a wise decision for anyone renting an apartment, but it’s especially necessary for residents in New York City. Because New York City has one of the most cutthroat real estate markets in the United States — if not the world — it’s essential for renters to protect themselves and their possessions. Between the threat of theft and potential damages, the New York City renter who doesn’t have insurance may find himself or herself in a very sticky situation.
Understanding Renter’s Insurance
Given that every homeowner needs homeowner’s insurance, it stands to reason that renters need insurance as well. The two aren’t that much different, after all. Renter’s insurance offers much of the same protection as homeowner’s insurance. At its base point, that’s what renter’s insurance is — protection.
The main difference is that renter’s insurance won’t generally cover the dwelling itself — that’s up to your landlord. That being said, if you make alterations to your rental property, your insurance may cover those things through liability insurance. The good news is that renter’s insurance does cover your own personal property. Your landlord has to take care of the home or building; that coverage won’t protect your personal belongings.
The Need for Insurance
Anything can happen in your home, whether you own or rent it. Just as you wouldn’t drive without insurance, you can’t live in a home without protecting your property. Renter’s insurance will cover damages caused by theft, vandalism, fires, or certain natural disasters. The liability insurance you receive with your policy can even protect you if you slip, fall, or otherwise, hurt yourself while in your rental home or on your landlord’s property.
Asking the Right Questions
You need to ask questions before you make an important purchase, including renter’s insurance. The fact is that some providers are better than others. Make sure you choose an insurance provider with a solid reputation. You have to trust them, or else you might end up left in the cold — literally. Before committing to any policy, ask these questions.
What’s covered, especially in terms of furniture, electronics, clothing, art, and other valuables?
Which perils does the policy cover, so you can make sure you’re protected against vandalism, fire, theft, smoke damage, explosions, water damage, and damages caused by natural disasters?
What will occur if you or someone else gets injured in your rental property?
Whom does your policy cover, such as in the case of roommates, long-term visitors, and pets?
Does your policy protect your belongings outside of the home?
How much does the policy cost?
What are details about a provider’s reputation and experience?
The Importance of Comparison Shopping
Given the importance of your belongings and all the questions you have to ask, you need to comparison shop to get the best deal. You don’t want to sign with a provider in haste, only to discover that you’re paying far more than necessary. Take the time to choose a provider who offers everything you need at a price you can afford. You don’t want to get caught without insurance, especially in such a big, bustling city. Have you ever needed to make use of renter’s insurance? What was your experience like?
The post Renter’s Insurance: What You Need to Know appeared first on | ELIKA Real Estate.
June 27, 2018
Why You Need a Real Estate Agent
With the proliferation of information, particularly on the Internet, there is a temptation to forgo a real estate agent. You should resist this urge, however. Buyers value real estate agents as advisors in the home buying process that use their expertise to help you find the right home in a great building while making sure you do not overpay.
We elaborate on the services you can expect, which are difficult for the average New York City homebuyer to replicate.
Knows neighborhoods
An agent has expert knowledge of New York City’s many neighborhoods. He/she spends his days with eyes and ears on the ground, which goes beyond simply looking online to research a neighborhood.
This also extends to providing advice on buildings, where his/her knowledge is even more crucial. Your agent knows whether the board is strict or laxer, including in their enforcement of the house rules. These are important considerations for you when deciding where to live.
Online searches are time-consuming, and may not reflect accurate or up-to-date information.
Helps with details
Your agent can help you narrow your search by focusing on what is important to you. He/she assists in separating your wants and needs. There are certain things you realize are a must have for you, while others are nice, but you can live without it. Your agent, through his/her experience, can help you distinguish between the two.
There are also the nitty-gritty details that an agent handles. These include picking apartments for you to see and making appointments. You can do this yourself, but it is time-consuming and an agent knows which apartments and buildings are worth your time, based on your search criteria.
Formulate an offer
A buyer’s agent has access to all kinds of information. He/she knows the fair value for a property, which is partly based on comps. You may have access to some of this information, but not all of it. Additionally, there is a certain art to this, particularly in certain situations and your agent has gained a lot of market expertise that can help you make sure you pay a fair price. A seller may accept a lower offer if you have a greater chance of passing the board’s muster, and your agent knows how to present this properly.
An exclusive buyer’s agent works for you and ensures you have proper representation. He/she will also advise you on when it is time to walk away. It is an emotional experience, and an agent provides expert and objective advice.
Recommendations
A real estate agent has built an extensive network of experts. You need a variety of people to buy a home, and even once you move in. This list includes a lawyer, lender, insurance agent, even a locksmith. Your agent likely has built an impressive array of contacts over the years and has multiple companies for you to interview.
You pay anyway
It is natural to think you can skip hiring a buyer’s agent and save your half of the commission. However, it does not work that way. In reality, the seller pays the fee, which is typically 4% – 6%. Should you forgo representation, the listing agent merely keeps the entire amount, rather than splitting it equally between him/her and the buyer’s agent.
You can search for sale by owners (FSBO), but there is no guarantee the seller is going to share the savings with you, and there is a lot more legwork involved.
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Postwar or Prewar? Choosing a Building That’s Right for You
In New York City, knowing some basic real estate language can help sell a place. However, architectural semantics are confusing if you’re new to the NYC real estate market. Ads and tours often use terms such as “postwar” or “prewar” to describe the style of an apartment’s construction, which may make you wonder what each of those terms means exactly. Read on for more on this architectural lingo and how to use it to choose the apartment that’s right for you.
Prewar Buildings
Image via Flickr by kimmah
Built Between: 1900 and the 1940s
Design Styles
Crown molding, the detailing that separates the top of the wall and the ceiling, is common in prewar buildings. Hardwood floors are a hallmark of prewar design as well. Other prominent features might include high (and even tin) ceilings, as well as French doors.
According to The New York Times, “prewar apartments can be further categorized as pre-prewar or even pre-pre-prewar. The former… refers to apartments from before World War I, typically with even higher ceilings of 10 to 12 feet, multiple fireplaces, and more ornate detailing.”
What they Offer
Cheaper costs sometimes come with the elaborate architecture. While prewar buildings offer a lot of charm, the bones (or “structure”) may require some mending. For this reason, home buyers and renters can expect deals on apartments and homes that are in need of a little love and care.
Made with nearly sound-proof, sturdy materials, prewar buildings last. In NYC, where noisy neighbors are a fact of urban living, prewar buildings include a welcome barrier.
Postwar Buildings
Image via Flickr by Barbara L. Hanson
Built Between: the 1950s and today
Design Styles
The postwar style incorporates much of modern architecture and amenities. Expect sharper lines and less ornate aesthetics. Postwar building designers also tended to experiment with different materials, so hardwood floors aren’t a given.
The New York Times notes, “Among postwar buildings, the more distinctive are those from the 1950s and ’60s, including the many white-brick buildings on the Upper East Side. They tend to have lower ceilings than prewar.”
What they Offer
While considering modern urbanites during the design and building process of the postwar buildings, these buildings usually include many luxuries that older, prewar buildings might not. These days, it’s fairly common for a new building in the middle of a neighborhood like Bushwick, Brooklyn to feature an indoor swimming pool or game room.
Postwar building materials can have a potential downside – more specifically, the details within each apartment. Sometimes the contemporary style is cheaply executed. Depending on the designer, everything from tacky kitchen countertops to poorly insulated walls might result in sore eyes and extra earplugs for the apartment’s resident(s). Note that not all postwar buildings feature these shortcomings.
Choosing the Right Building
The right apartment building for you likely won’t depend solely on your design preferences. Keep in mind these architectural aesthetics are particular to a historical period and to where, regarding boroughs and neighborhoods, the buildings’ construction took place.
Expect to find prewar buildings in Manhattan neighborhoods such as West Village and the Upper West Side, where NYC was heavily developed at the time. Postwar buildings are often found in up-and-coming areas of Brooklyn or Queens since the development in these neighborhoods is newer.
The right building for you, ultimately, may combine some factors, including the location and design, the school district, local shopping options, and more.
We want to hear from you. What architectural styles piqué your interest, and why? What’s your defining factor for finding your new housing? Share your thoughts in the comments below.
The post Postwar or Prewar? Choosing a Building That’s Right for You appeared first on | ELIKA Real Estate.
June 26, 2018
NYC Real Estate Agents: Defining Buyer’s vs Seller’s Agents
It is important to know the distinction between the different types of agents. We have discussed exclusive buyer’s agents, but it is worthwhile to understand the other types of agents, and which parties they represent. There are three types of agency relationships you should know.
A buyer’s agent
As the name suggests, a buyer’s agent represents the home buyer, and that is whom he/she owes a fiduciary duty. The National Association of Exclusive Buyer Agents is an organization comprised solely of brokers and agents that only represent buyers while following a strict Code of Ethics and Standards of Practice.
In representing a buyer’s interests, a buyer’s agent scours listings in search of those that are appropriate for his/her client, schedules showings, and, if you like the property, conducts a comps analysis in order to help you formulate an offer. He/she also negotiate the final price and advises you when it is appropriate to move on.
A home buyer does not pay the agent directly. His/her commission is split with the seller’s agent.
A seller’s agent
It is important to remember that the seller has his/her own representation. This person is called the seller’s agent or the listing agent. The listing agent and seller have a contractual arrangement. As a seller, if you do not like your agent or feel he/she is not doing the job properly, you are stuck with him/her for a period of time. The only way out prior to the contract’s expiration is for the seller’s agent to agree to end the relationship.
The listing agent markets the property, including helping the seller formulate a price, advertise the property, schedule open houses, and negotiate any offers.
The listing agent is seeking the highest price but will consider other factors in consideration of his/her client’s interest. These include the buyer’s ability to pass the board’s interview and the strength of his/her financials.
A dual agent
This is where things get murkier. A seller’s agent can also serve as a buyer’s agent, creating a dual agency. In this case, the agent owes his/her fiduciary duty to both parties. While this creates certain conflicts, New York allows it to exist. The agent must inform the buyer and seller of the dual agency, but it raises questions on if he/she can truly maintain impartiality.
This puts the buyer at a disadvantage. Remember, the seller compensates the agent, with the payout based on the sales price. The agent has an economic incentive to enter into a dual agency since he/she collects the entire commission, typically splitting it equally with the broker. This contrasts with the usual situation where the listing agent divides his/her commission equally with the buyer’s agent.
Our advice
We recommend buyers have their own exclusive representation. This way, there are clear lines, and it leaves no question of where the parties stand. Your agent, while collecting a commission, works solely for your interests. Similarly, if you are a seller, you want to ensure your agent has undivided loyalty to you. There is a temptation for a dual agent to recommend that you accept a lower price since he/she collects the entire commission.
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