Issue 108 - To Use a (Buyer’s) Broker or Not to Use a Broker — That is the Question

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Issue 108 – To Use a (Buyer’s) Broker or Not to Use a Broker — That is the Question

April 1, 2025

Becoming a buyer in NYC is a process in which you learn what you are made of. Creating something valuable, enjoyable, and worthwhile requires fortitude, guts, and a little imagination. Not only is the endeavor highly emotional, but it is also nuanced and can be expensive if mismanaged. It requires having the right supporting players in place, from your mortgage broker to a fantastic attorney as well as a broker who truly serves your best interests. Someone who says what they think, not what you want to hear, differentiates a salesperson from a trustworthy advisor.

The right team is vital in helping you deal with potentially rigid co-op boards and the legal intricacies of financing, negotiation, and comparative market analysis. An experienced broker will also know how to structure your bid to stand out amongst a sea of others.

Adding to the confusion is a new variable regarding which party pays the commission on a real estate transaction. What once was a seller’s responsibility has now become an open forum for discussion and negotiation. But pushing the commission onto buyers, who already bear significant friction costs associated with purchasing, has serious repercussions. That additional ‘hit’ can prevent them from meeting the price a seller will agree to — especially given the continuation of higher interest rates, which further diminishes the buyer’s purchase power.

Based on that fact pattern, we see that everything is status quo: sellers are still paying the commission because they recognize it’s the smartest thing to do. Because they are vested in getting the highest price possible and protecting the building’s value, sellers have essentially boycotted the idea of reallocating the commission.

According to a report by The New York Times last spring, 85 to 90 percent of home buyers in New York City used a buyer’s broker. More recently, StreetEasy published a Zillow research report showing that 88 percent of buyers nationwide used a buyer’s agent the previous year.

There are so many reasons a buyer’s broker is essential. When people buy a real estate asset, they generally want to avoid buying a lemon. They typically wish to have the ‘blessing’ of a trusted residential broker to ensure what they are looking at is sound.

A broker can advise on certain things that a third-party website cannot, such as the nuances and underpinnings of the neighborhood and the building—including whether you can hear the train or subway rumble underneath the unit, whether there’s a history of water or gas leaks that hasn’t been fully disclosed in the building minutes, or whether the next-door neighbor is a heavy smoker. All these factors are material and set the tone of who your broker is and how they serve you.

Most buyers recognize the value of bringing in an advisor to provide comparable analysis, conducting proper due diligence surrounding the building’s financial history, and determining how the unit will hold value over time and what sets it apart from other properties. An expert will also be able to ascertain whether the property is in a ‘fringe’ neighborhood that will recede quickly in a soft market, or one that will take off. A qualified buyer’s broker can genuinely understand how to structure an offer properly and illicit a deep counter from the seller to get what the buyer wants, all while creating an environment that will allow both parties to feel like they have won.

A buyer’s broker understands that they aren’t just helping them obtain a home; they are helping to secure an asset that must perform well over time.

They can prepare some of the most laborious but necessary documentation, framed in a way that fully discloses the buyer’s identity to the board, the managing agent, and the seller — without their meeting the buyer.

The skill with which a broker curates that narrative is among the most critical components in the sales process, given this will determine whether buyers are granted a board interview and get approved to buy in the building.

The buyer’s broker should prepare you for a co-op board interview protocol and detail what you can and cannot say during that interview (if you are lucky enough to get to that point.)

Buyers who choose to represent themselves forfeit valuable support and assurance in how and what they present to ensure a successful transaction and the long-term protection of their purchases’ value.

My chief point is that there are some things that money can buy, and one is a level of experience and acumen, showcasing what a broker’s value truly is. Brokers who have been through many different market cycles recognize and know how to leverage those opportunities in their client’s favor. A seasoned pro can find inherent value where others may panic and mistrust the opportunity in front of them. Having an advisor guide you in going against the market’s grain is where the value proposition of a great broker lies.

Moreover, an established buyer’s broker can often ‘part the sea,’ if you will, getting their clients’ offers considered first by the seller, who can rely on the broker’s consistency and track record in seeing the deal through to the end without any issues.

Sadly, buyers often feel they cannot trust a broker based on negative prior dealings. I spend much of my time cleaning up what others have overpromised and underdelivered. It is a trust exercise in convincing the client to believe that what I say, I will do.

I also spend time clearing up falsehoods, such as that buyers believe because they don’t have a broker, they will have more leverage to offer by applying commission points to incentivize the broker to move forward with their offer– even if it’s not at the same price–or that the commission adjustment allows the seller to have more to take home.

Most people don’t realize that when a buyer doesn’t have a broker representing them, two things happen: The listing broker has no issue driving that bid up whether they have a broker or not and most likely will still increase the bid to maximize the seller’s profit. They may not always disclose transparently to the seller that the buyer has come in without representation. Therefore, they are capitalizing on the additional 1.5 or 2 percent it may have saved and allocating it to their own pocket.

While we recognize it is a conflict of interest, it is the fiduciary responsibility of both the buyer’s and seller’s broker to disclose if a dual agency has been created.

Without using a buyer’s broker, the listing agent’s fiduciary responsibility remains with the seller, not the procuring buyer, so the buyer entering the transaction is walking into a situation where they have no one advocating on their behalf.

The bottom line is that when you are putting a substantial amount of cash into an asset, it is incumbent on all parties to have a representative looking out for their needs to ensure they are getting the most value for their asset, whether on the buy or sell side.

As a real estate advisor, I am very uncomfortable ‘selling’ my value to anyone. However, I am a big believer in actions speaking louder than words. Anyone wishing to enter into a real estate transaction should look very carefully at their agent’s actions to appreciate best what they bring to the table.

Issue 125 – The $5 Million Question: What’s Actually Worth Owning in New York Right Now?

September 1, 2026

The New York real estate market is entering a period where the old rules of valuation are becoming less reliable. Price per square foot and comparable sales still matter, but buyers are weighing those factors differently — rewarding some attributes while quietly discounting others. The question is no longer simply, “What did the apartment downstairs sell for?” It’s “What are buyers willing to pay a premium for now — and what have they stopped paying for?”

I could identify at least seven factors being repriced in Manhattan right now: outdoor space, views/greenery, turnkey condition, monthly carrying costs, new development versus resale, second-home ownership, and the increasingly important distinction between a great apartment and a great building.

Confusing matters for buyers is that the NYC market is sending contradictory signals. Manhattan inventory is changing by price band, mortgage rates remain challenging nationally, and NYC’s new pied-à-terre tax is creating another potential dividing line in how buyers assess ownership costs.

In the luxury zone, one way to test those shifting valuations is what I call “The $5-Million-Question.”

I can take $5 million and show clients what that buys today in six completely different versions of New York: Think:

$5M on Central Park West
$5M downtown
$5M in Brooklyn
$5M in a new development
$5M in a great prewar co-op
$5M for something compromised but spectacular

Same amount of money. Same city. Radically different value.

The questions to ponder are:

Which one would I buy?
Which one would I avoid?
Which one has the greatest upside?
And which one will be easiest to sell five years from now?

That comparison is more revealing than a market-wide statistic because it shows what the same $5 million actually buys — and what it might be worth to the next buyer.

On the surface, the questions are simple. In practice, answering them requires a sophisticated analysis — price per square foot, carrying costs, taxes, liquidity, buyer pool, neighborhood trajectory, architectural quality, and exit strategy. Buyers should seek out an expert broker not only for information but also for interpretation.

For a long time, value was assessed through familiar metrics: price per square foot, comparable sales, neighborhood, floor, light, views, condition, and building pedigree. Those factors still matter. But buyers are now weighing them differently. We are in a repricing phase — not necessarily of New York City as a whole, but of the individual components that define its value.

At Central Park West, $5 million typically trades square footage for permanence: park frontage, architectural significance, scarcity, and long-term stability.

Downtown, the same budget may secure a more contemporary product — larger windows, amenities, and outdoor space — but often at a higher price per square foot and with higher ongoing costs.

In a new development, $5 million buys condition, services, and immediacy. The question is how much of that price reflects a “new development premium,” and whether the resale market will recognize it when the time comes to exit.

In Brooklyn, the same capital can deliver scale, outdoor space, and architectural character that would be significantly more expensive in Manhattan.

None of these is inherently superior. The real questions are: What are you actually buying, and who will want it next? That second part is often underweighted: Which market is offering more rewards?

Based on buyer behavior, several attributes are becoming more defensible:

Light and views are not replicable. While layouts can be changed, exposure and outlook cannot be transformed.

Functional outdoor space is valuable. Usable terraces connected to living areas are materially more valuable than secondary or awkwardly accessed outdoor areas.

Strong floor plans are key. The pandemic reinforced that usability matters as much as size. Proportion, flow, and flexibility are now critical.

Condition has always mattered — now more than ever. High construction costs and uncertainty have increased demand for finished product. However, there is a ceiling — buyers will not indefinitely overpay for someone else’s design choices.

Low carrying friction is persuasive. Taxes, common charges, assessments, and long-term building health are now central to valuation. High monthly costs can materially impact resale liquidity.

Scarcity can be the tipping point. A strong apartment does not need to be perfect. It needs to be difficult to replicate.

So, where would I be most cautious today?

I would be disciplined about paying a premium purely for newness. New does not hold value on its own — architecture, location, and scarcity do. I would closely evaluate buildings where carrying costs are disconnected from underlying asset value. I would avoid trophy pricing unless there is a true trophy attribute. And I would be careful about pricing that is anchored primarily to renovation cost.

A $2 million renovation does not translate into a $2 million increase in value.

The market does not reimburse cost. It prices outcome.

If I were allocating funds at this level, the guiding principles should be: light over finishes, proportion over decoration, irreplaceable views over amenity packages, and ultimately, best-in-class units in proven buildings over average units in trending ones.

The strongest purchases do two things at once: they function as exceptional homes today and remain desirable assets tomorrow. That means thinking about the exit before the entry — and recognizing that New York isn’t one market, but a collection of micro-markets defined by neighborhood, block, building, floor, and orientation.

While real estate is inherently emotional, value is what remains when emotion fades.

Whether the budget is $1 million, $5 million, or $25 million, the question is ultimately the same: What is actually worth owning?

That is the question the next phase of the market will answer — and it will reward analysis over generalization.