In the latest episode of the TrueGotham podcast, we delve into one of New York’s favorite topics: unscruplous real estate brokers.
The episode is a little more than eight minutes long, and covers a lot of ground. Here’s an excerpt, about how selfish or desperate brokers (The New York Times reportedly recently that the vast majority of New York brokers have no listings) can cost sellers major time and money:
Often, a broker will have multiple offers on a property, and before they present all of these offers to you, they will go through those offers and they’ll say “which one of these is going to make me the most money?” And that’s the offer that they’re going to push on you as hard as they can. And that offer may not be in your best interest.
You may have someone who comes in and says “I’ll pay you two million dollars, cash. I’ve worked at JP Morgan Chase for the last 10 years, I’m a senior vice-president, I’m a managing director, I’ll close whenever you want.” And then you have someone else over here, a struggling artist, God bless them, but they’re not making a lot of money, they need a mortgage contingency, they have to get financing and the contract has to be contingent on that… if the broker stands to make a six percent commission with that person, and only a three percent commission with the other person because they’re working with a broker–I’m not saying all brokers, but many brokers are going to steer you toward that six percent person.
And it’s not in your best interest. It’s only in the broker’s best interest. And three months, six months down the road when you’ve gone through a board process, you know, you’ve been trying to get this person approved by a co-op board and you get a rejection, you’ve lost three to four months of income, or expenses that you’ve been putting out, and worse yet, now your apartment has been on the market for four months.
Statistics show that the longer an apartment has been on the market, the less its going to sell for. So you’ve lost money. And there’s nothing you can do to salvage that.
Listen to the whole episode by clicking here.