Heads up, prospective homeowners – There have been some important changes effecting the home-buying process. As of last month, this new requirement, which follows a National Association of REALTORS® (NAR) lawsuit settlement earlier in the year, aims to improve transparency and ensure clear communication between agents and their clients.
But what does this mean for you? Read on to learn how these changes impact NYC buyers and the types of agreements you may encounter during your home search.
Why Work with a Buyer’s Agent in NYC?
Navigating New York City’s real estate market can be overwhelming. As one of the most expensive and complex markets in the country, it’s essential to have a buyer’s agent on your side. A buyer’s agent represents only you, helping you navigate specific neighborhoods and buildings, avoid potential pitfalls, and negotiate the best deal. Their knowledge of building policies, co-op and condo board applications/interviews, and home inspections can save you both time and money.
Here are 7 reasons you should consider working with a buyer’s agent:
1. They guide you through the entire process, from the first showing all the way to closing.
2. They provide expert insights into the local real estate market, down to the building level.
3. They collaborate with you to streamline your home search.
4. They accompany you on home tours, asking necessary questions and pointing out details you may overlook.
5. They negotiate on your behalf, putting you in the best possible position to win.
6. They assist with the involved co-op/condo purchase application and approval process.
7. They introduce you to essential professionals like mortgage lenders and inspectors.
Home buyers deserve to work with an agent they feel is a good fit for them and their specific real estate goals. This often means that a buyer might be inclined to meet with a few different agents before agreeing to work together exclusively.
What Documentation to Expect
A buyer’s representation agreement lays out the broader real estate services provided by the agent, as well as the required compensation and payment terms. We believe buyers deserve to work with an agent who is committed to their best interests and only works for them. As such, the agreement should specify that the buyer’s agent represents solely you — and not the seller — in the transaction.
Buyer’s representation agreements are important safeguards for home shoppers and agents alike. They are documents that ensure both parties understand exactly what each other’s tasks and obligations to one another are. They help prevent surprise fees, unplanned asks, or “gotcha” moments. They also create an opportunity for full transparency. Consumers should be aware of the exact commissions they’re paying an agent, and when those payments are expected, well before they get to closing conversations.
Exclusive vs. non-exclusive buyer’s representation agreements
The important thing for buyers to be aware of: Each NYC real estate firm is creating their own representation agreement, so they will appear different from each other. With that in mind, Buyer’s representation agreements are often exclusive, which means you’re agreeing not to hire another agent to represent you while you shop for a home.
You may also encounter a non-exclusive representation agreement, which can sometimes be referred to as a touring agreement. This type of agreement allows you to tour homes with an agent for a short period without committing to an ongoing relationship. It can be a way to get a feel for how the agent works before deciding to engage them long-term.
These agreements are crucial as they help set expectations, ensuring both you and the agent understand your roles in the process and gives transparency on your agent’s compensation.
Other Required Disclosure Forms
As part of working with a real estate agent in New York, you’ll also encounter two disclosure forms that continue to be required throughout the state.
- New York State Disclosure Form for Buyers and Sellers: This form clarifies the relationship between you and your agent, ensuring you know whether the agent is representing your interests or acting as a dual agent.
- New York State Housing and Anti-Discrimination Disclosure Form: This form outlines your rights under federal, state, and local housing and anti-discrimination laws.
What Does It Cost to Work with a Buyer’s Agent?
When starting to work with an agent, it is important to fully discuss their compensation and the different scenarios you may encounter. Typically, a buyer’s agent’s commission will be paid at closing, per the terms of your buyer’s agreement. While many sellers are still offering to cover the buyer’s agent’s commission in NYC, there are instances where the buyer may need to contribute. The commission terms are always negotiable, and your agent should clarify these details before you begin your home search.
Whether you’re new to NYC real estate or a seasoned homebuyer, it’s crucial to stay informed about the latest changes and how they affect your home search. Working with a knowledgeable buyer’s agent ensures you have the best possible experience navigating this complex market.
Feel free to reach out if you have any questions or would like to discuss your real estate goals!
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