Hello Jackson Heights Community,
I have been living in Jackson Heights for a number of years now. It's a neighborhood I wanted to live in since I first moved to NYC and started work on my Masters at Columbia. It's an amazingly vibrant community, and I love being a part of it!
From repeated conversations with friends and acquaintances around the community, I've been hearing time and time again that people are having difficulty finding and purchasing in JH, as well as selling their apartments.
This has left me puzzled.
For the past eight years, I've worked as a Real Estate Broker with the firm Cooper & Cooper.
It's a really great firm - all of the agents are articulate and well educated. I've made many life long friends through my work at the company.
While I've primarily worked in sales in both Manhattan & Brooklyn, I've recently started working with clients who are interested in Jackson Heights. The basic profile of these clients is similar. They are usually renting in Manhattan or Brooklyn and want to look in Jackson Heights to buy, as they can get more for their money here. As a member of the community, I see this as a huge benefit and an exciting opportunity for our neighborhood to grow and improve.
However, in setting up tours to view properties in the neighborhood, I've been frustrated and displeased with the resistance by some listing agents here in Jackson Heights to work with cooperating brokers. This is not common in most neighborhoods in New York City. The vast majority of sales transactions in NYC are what we call a “Co-Brokeâ€. For example, when a seller negotiates an exclusive contract with a sales agent, the commission paid to the listing broker upon completion of the sale is typically 6% of the sales price (although that can be negotiated in some cases).
In the case of most sales in NYC, that 6% commission will be split between the listing broker and the broker who brings the buyer (thus encouraging more buyers to see and bid on your property). However, if a client comes and sees the apartment directly, with no broker representation, the listing broker is entitled to keep the entirety of that commission as the selling broker. As you can imagine, the ability to collect the full commission on a “direct†deal (unrepresented buyer) becomes very attractive to a listing broker, but does not serve the client’s best interest at all!
As I mentioned above, in most cases interested clients looking to buy will come with their own broker, called a buyer’s broker. This agent represents them, not just helping them find an apartment, but also aiding them in negotiation, in contracts, finding a lawyer and mortgage broker, assembling the board package, etc.. The buyer’s broker will co-broke the commission with the listing agent, splitting it 50/50. So if the commission listed in the contract is 6%, the listing agent gets 3% and the buyer’s broker gets 3%. This is also beneficial to the seller because the apartment is advertised without hesitation to the entire brokerage community, bringing more buyers to their property. Additionally, represented buyers are often better qualified since they have been prepared and educated by the broker with whom they are working. This reduces time lost with board turndowns, drawn out contract processes, etc.
If I was a seller, and I was paying a listing agent 6% of the sales price, I would be enraged that a well qualified client was unable to have representation of their own and see my property, because my agent refused to split the commission I was paying them. It does not matter that the listing agent's company splits their portion of the commission through their company. It's in fact, irrelevant. At my own company, we often have commission splits that extend between multiple agents. But we would never misrepresent our clients and/or not co-broke an apartment because of our commission split. That would be unethical and sometimes worse, illegal.
That said, I understand that this is not only a “broker†issue in Jackson Heights. I have heard of situations in which listing brokers are only offered 2-3% commission to represent an owner. On the face of it, this seems like a great way to save some money on the sale of your home. However, in reality this rarely benefits the seller for the same reason listed above. If a seller is “forcing†a listing broker to accept a 2-3% commission, they are essentially ensuring that the listing broker can (and will) only show that property to unrepresented or direct purchasers. Anyone working with a broker (which is the vast majority of buyers – especially those looking to move from one neighborhood to another) is completely shut out of the process. You end up with lower purchase prices, more difficult deals, unqualified buyers and frustration with your representation (who’s hands are tied)..
In Jackson Heights specifically, I have been surprised to see that many brokerage firms will not co-broke with buyers agents. As an owner, or potential buyer, this should not be allowed to continue in our community.
My hope is that this post will explain this concept of co-broking to unknowing apartment owners here in Jackson Heights. I want to educate both brokers and sellers in order to make our neighborhood an attractive and accessible one to buyers and renters alike.
If anyone here has any questions regarding this and would like to reach out to me, please don't hesitate to!
I'm happy to be a resource and to help in any way that I can.
Best,
______________________________
Aram Bajakian
Senior Associate Broker
Cooper & Cooper Real Estate
Residential Sales & Rentals
341 West 38th Street, 10th Floor
New York, NY 10018
aram.bajakian@coopercooper.comwww.CooperCooper.com/AramBajakian