Choosing your broker is one of the biggest decisions you make when beginning the search for a condominium. A good broker will give you advice, always keep her eyes and ears open for new units and be patient as you extend your search. Your broker will also point out potential issues with a condo that you may not have noticed, help you negotiate once you decide to make an offer, and recommend good contractors.
So how should you choose your broker? There are a few things to keep in mind:
Brokers are paid on commission. Customarily, the broker for the seller receives a 6% commission. This commission is then split evenly with the broker of the buyer. In other words, when you eventually buy a condo, your broker will get 3% of the sale price, but you pay no commission, because that it all comes from the seller.
- What this means for you: Watch out for brokers who are pushy or impatient. Because they don’t get paid until you make a decision, some brokers will start pressuring you or get fed up if you don’t buy within a short period of time. You don’t need to put up with this. Your broker should help you find the best condo for you – that’s their job, and that’s why they’re paid a commission.
Many brokers are part-time, or moonlighters, or treat their job as a hobby because the hours are (theoretically) very flexible. Some brokers, though, do work full-time as brokers.
- What this means for you: Since you’re a first-time buyer, you’re going to need a bit of handholding. And, no matter who you are, you’re going to want a broker who’s dialed into the industry, committed to her craft, frequently looking at the market and making commissions from multiple clients. So avoid a broker who only makes a few sales a year, or who has another job that she cares about more. Instead, get a broker whose business is real estate.
Different brokers have different skills and specialties. There are real estate agents who sell only commercial properties, or who specialize in single-family homes or who work almost exclusively with the exceedingly well-to-do. Beyond this, most brokers have a comfort zone – neighborhoods they’re familiar with, types of clients they’re used to working for.
- What this means for you: You should find a broker who has experience with first time buyers – and who regularly makes deals within your price range. Also, if you have several neighborhoods in mind, make sure your broker has done business in the areas where you’re looking – the extra knowledge and familiarity will come in handy, particularly in a tight market.
You’ll need a pre-approval letter. Almost every broker requires that you have a pre-approval letter from a mortgage lender prior to your first meeting. If a broker does not require one, it shows a lack of professionalism and experience.
- What this means for you: It’s a bit of a pain, but getting a pre-approval letter makes sense. It’s a way for you to show a potential broker that you have the credit necessary to buy a condo, and it’s also a way for you to learn how large of a loan you’ll be able to take out when you do decide to buy.
Now that you understand these things, it’s time to start looking for a broker. Ask friends and family for their recommendations – and also check out online rating systems, including Zillow’s broker search function. Another good way to find brokers – or at least to test them out – is by going to open houses and talking to the listing agents (brokers for the sellers). Talk to several and see how you like their approach and style. You’ll find some are aggressive, some are relaxed, and some are gregarious. Choose a style that’s right for you.
In the course of your search for a condo, you’re going to spend a lot of time with your broker, and you’re going to ask your broker a lot of questions. So make sure that the two of you have a good rapport … and that your broker is able to answer your questions in a way that you understand. Also remember that you don’t have to go with the first broker you meet – wait until you find one that matches your needs and personality.
If you are looking for a co-op, working with the right broker is even more important. You’ll need a broker who not only knows the buildings in the area, but who also understands any special requirements each co-op’s board may have. A good broker will help you guide to a winning bid, but will also help you draft a compelling board presentation that gets you welcomed to the building.