Cutting out the middleman

Editor's note: This article is reposted with permission by The Real Deal. Click here to view the original article.

By CANDACE TAYLOR

NEW YORK CITY -- For some buyer's brokers, it's their greatest fear come to pass. More and more apartment-hunters, armed with listing information gleaned from the Web, are representing themselves rather than using a real estate agent.

"I have buyers coming at me (at open houses), unrepresented, clutching fistfuls of paper," said Halstead Property Senior Vice President Charles Homet, who primarily works with sellers. "They pride themselves on their Internet acumen and they feel they have enough information."

This is the long-feared bogeyman of the Internet era for buyer's brokers: the idea that buyers will no longer need them because they can find listings online and deal directly with the seller's agent.

And while buyer's brokers clearly have an advantage right now in the soft market, the long term is a different story. In some ways, the changes are already afoot.

Prudential Douglas Elliman Vice Chairman Dolly Lenz said she is doing "a lot more direct deals," estimating that she may be working with twice as many unrepresented buyers now as in past years.

"If you're the exclusive agent, the buyers are calling you directly," she said. "It's becoming the wave of the future."

Upon closer inspection, however, the shift isn't the disaster for buyer's brokers that it may first appear. Many buyers start out unrepresented, but quickly discover they need help navigating the complexities of the market. And experts agree that the difficulty of assembling co-op board packages, in particular, assures co-brokering a permanent place in New York City real estate.

Still, the shift has significant ramifications for the next generation of buyer's brokers, who will have to be faster and savvier than in the past. "We have to work harder," said Klara Madlin, founder of Klara Madlin Real Estate, which often represents buyers. "If (agents) are going to be successful, they really need to be on top of this information, and it's not easy."

That's largely because over the last several years, real estate listing data in New York has become more plentiful and accurate on the Web, making for more educated consumers. Brokerages like the Corcoran Group, Halstead and Elliman have poured money into user-friendly Web sites, with high-resolution photos and even videos of properties for sale.

Meanwhile, sites like StreetEasy, Trulia and PropertyShark allow consumers to search nearly all of the market's listings at once.

Consumers' access to this information didn't seem to make much difference to brokers during the boom, when apartments moved so quickly that they were often sold by the time consumers found them online.

"People were afraid that if they didn't buy right then and there, someone else would outbid them," Madlin said. "They weren't doing as much research."

In the last year, however, the once-frenetic pace of sales in New York has slowed considerably, prices have fallen and a buyer's market has emerged. That has often given buyer's brokers an advantage over agents working with sellers, but it's also giving buyers the time to look for properties on their own.

Homet said many of the unrepresented buyers he sees are younger, first-time buyers. "It's mostly first-time buyers who are in their 20s and who are very Internet-savvy," he said. "They have a lot of knowledge at their fingertips. They have confidence that they can handle the negotiations themselves." ...CONTINUED

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