With all of the parties that are involved in a New York City real estate transaction, it still amazes me that when anything becomes uncomfortable, everyone looks to the broker’s commission to make things right.
Consider this: there are a minimum of eight (8) parties involved in an all cash transaction (9 if buyer has a broker) and twelve (12, 13 with buyer’s broker) in a financed transaction.
- Seller
- Buyer
- Seller attorney
- Buyer attorney
- Seller’s agent
- Buyer’s agent (90% of the time)
- Building property manager
- Closing agent for management
And if financed, we add on:
- Mortgage broker
- Underwriter
- Bank Attorney
- Payoff bank attorney (just shows up at closing to collect outstanding mortgage balance from seller)
This is a lot of hands in the pot to get a deal from inception/offer all the way to the closing table. What continues to baffle me after 22 years in this industry is that when any of the above parties makes an error (and it does happen), the seller consistently goes after the commission of their broker.
I suspect, well rather I know that this is in large part due to the size of the fee that the broker yields from the transaction. And it is human instinct to want to point the finger at someone when things don’t go our way. The big fee often brings with it a certain resentment when things don’t go as smoothly as everyone had planned.
Recently, one of my agents at CORE recently closed on a transaction in which the seller was furious that the closing took so long. An email string from months ago showed how incredibly well the agent managed expectations, worked diligently on the seller’s behalf, operated with integrity, and tried to persuade the bank and buyer to close as soon as possible. All of that and the seller was furious demanding a reduction in commission. She didn’t attack the bank, her attorney, or management all of whom played a part in the delays. She came after our agent who was consistently working in the seller’s best interest.
The moral of the story: agents must manage expectations, deliver on their promises (think Amazon) and sellers must understand that with so many hands in the pot, it is very possible that someone other than the agent is to blame for any mishap.
Food for thought.
