Working directly with the sponsor instead of with a buyer’s agent is bound to split opinions. Agents will insist it’s better to work with them. However, this question can only be answered with another question. Have you already found a condo you want to buy? If the answer is yes, then part of the agent’s legwork is done. But before you call a developer’s sales office let’s examine the pros and cons of both options.
Working with an agent
Why it’s not always possible not to cut them out
Sometimes a developer will insist you go through the brokerage associated with the development. When you call the developer directly they may transfer you to the sales team and an agent will pick up. It’s still worth inquiring what their commission is and if it can be negotiated. Usually the early buyers in a new development get incentives others don’t.
How an agent can help
Not every agent is created equal. Make sure yours is experienced, knows exactly what you’re after and has contacts who can show them deals the general public won’t be able to find on the internet.
An agent will really earn their stripes when negotiating the deal for you. In a buyer’s market you will have a lot of leverage and an agent, should be able to push a developer hard to get you what you want. They may not only be able to get you a reduced price but extras such as upgraded finishings, storage space, parking space and a premium position in the building with great views.
Why to buy directly from the sponsor
In a buyer’s market, like New York currently is developers are willing to do deals to move their inventory. Dealing with their sales team directly could be a good move. If you know exactly which condo you want or at least the building you wish to live in, the process will be that much faster.
It always comes down to money
The immediate advantage to dealing directly with the developer is that it’s a big saving to them. They will no long have to pay 3 percent commission to a buyer’s agent. On a million dollar condo that’s $30K. If you are a good negotiator you should ask them what extras they can throw your way in lieu of this. The following should be up for discussion: sales price, closing costs (transfer taxes, attorney’s fee etc), upgraded finishes, prime location, square footage.
Make sure you have the right attorney
It’s vitally important to have a good attorney representing you, especially if you are not using an agent. You’ll need someone who is experienced in closing on condos, understands the loopholes of a condo offering plan and is a savvy negotiator. Some attorneys only want to handle the paperwork and not get involved in the deal. If you’re not using a realtor, you’ll need an attorney who is prepared to roll up their sleeves and go to battle for you.