Brokers: Who Needs Them?

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

Paul Guzyk, and his wife, Dottie Adams, are brave souls who stood up to one of the most ruthless breeds of human beings to walk the planet: Manhattan real estate brokers.


When Mr. Guzyk and Mrs. Adams decided to sell their two-bedroom, 850-square-foot East Village apartment, they considered working with an agent. After a barrage of calls from aggressive brokers who demanded an exclusive listing, they decided to sell the place on their own. By doing so, they also figured they could save more than $50,000 in commission fees.


“We didn’t meet a whole lot of brokers we felt comfortable with in New York,” Mr. Guzyk said. “A lot of brokers had bad vibes. They didn’t know what they were selling, they were too pushy, and the only thing they seemed to care about was themselves.”


The decision hasn’t made life easy for Mr. Guzyk and Mrs. Adams. Clamoring brokers have bombarded the couple with calls every day. Some have been downright obnoxious.


“You are NOT going to EVER sell a 5th floor walk-up in Alphabet City without giving a REALLY good brokerage firm an exclusive listing,” one broker e-mailed the couple.


Still, they went ahead and marketed the apartment on their own. They researched sales prices of comparable apartments in the neighborhood, and came up with an $863,000 asking price. They’ve spent about $600 in ads on the New York Times online and in print, and they built a Web site with software they bought for $79. They staple fliers in areas where they know there are other open houses, and in spite of snowstorms, Super Bowls, and other major events, about 40 people have seen the apartment since it was listed in January.


While real estate brokers historically have been considered a necessary evil – selling a property without one was as inadvisable as representing yourself in criminal court – a rising number of property owners are branching out on their own, and some say that it’s never been easier.


Mr. Guzyk and Mrs. Adams have had more success than Manos Pantelidis, a university instructor who signed a six-month exclusive contract with a broker at a large, unnamed firm. On the broker’s suggestion, he listed his Chelsea one-bedroom condo at $725,000. Over the course of six months, and after 15 open houses, Mr. Pantelidis estimates 30 people came to see the apartment.


Before he listed it, he wanted to rip out the carpet and freshen up the paint job, but his broker insisted it was unnecessary. During the time the condo was listed with her, the price was reduced twice, to $699,000 from $725,000, and down again to $685,000, where it remained until the contract expired. Not only did the brokerage firm fail to sell the condo, he thinks it may have deterred potential buyers.


“A few brokers listed the apartment on their Web site with an inflated price. When I had a friend call to inquire, they said it had already gone to contract, but they were happy to show him similar properties in other buildings,” Mr. Pantelidis said.


After the contract was up, Mr. Pantelidis installed bamboo floors, whitewashed the apartment, updated the bathroom, and dropped the price to $635,000. He had three offers to buy at the asking price within a month.


Sellers like Mr. Pantelidis now are finding more help.


Roger Crandall, co-founder of the brokerage firm Urban Address Real Estate, started NYCFizbo.com, a Web site for home sellers, to take advantage of the trend. The site, launched roughly four months ago, currently has 42 listings of New York City properties being sold by owners, and allows sellers to create virtual tours or post photos of their apartments.


Mr. Crandall’s idea was to give fizbos (short for “For Sale By Owner,” or FSBO) a place to market their homes, and if they give up in frustration and decide to work with a broker, Mr. Crandall’s firm, Urban Address, will be there to scoop up the business.


“A few years ago, on any given weekend you might see less than five fizbo listings,” Mr. Crandall said. “Now there are hundreds of fizbo listings. I think it’s a self-generating thing – people see that other people are doing it, and they think they can, too. Although I would bet the vast majority will eventually go with a broker, if they haven’t already.”


The primary advantage in listing with a broker used to be that he or she could market a property to the most appropriate buyers, and therefore fetch the most desirable price. That’s a dated notion now that anyone can advertise a property on the Internet, and home- buyers shop for property on the Web without the help of a broker. So why bother with one at all?


Rob Anzalone, co-founder of Fenwick-Keats Realty and one of the founding members of the Manhattan Association of Realtors, argues that home owners may undersell their property, and that even if they save money on the commission, they could make that money back, and then some, if they work with a broker.


“Without a broker, sellers may save themselves the 6% commission, but they may undersell the property by 15%, so is it worth it?” Mr. Anzalone asked. “I’m starting to see more FSBOs list with brokers now, and I’m sensing more and more frustration. Properties that would have sold very quickly six months ago, and that might have sold with competing bids, are starting to sit on the market. Brokers are working harder now, and sellers need brokers more now than before.”


In a softening market, it takes more than a Superbroker to save the day, though. Gustave, a 28-year-old who declined to give his last name, listed his Prospect Heights condo with a broker last fall. Six months earlier, a neighbor sold a comparable apartment for $415,000, so Gustave thought he would sell quickly with a discounted price of $385,000. He signed an exclusive two month contract with the broker, and during that time, he dropped the price on his one-bedroom condo to $375,000. After the contract expired, he began to market it on his own, and although he has had offers, none have closed. Now he has two brokers showing the condo, but he hasn’t had any more luck selling with a broker than he did on his own.


“It’s a different market now,” Gustave said. “I don’t think I would have had a problem selling six months ago. I liked working with a broker, but I would have liked it a lot better if they sold it.”


The New York Sun

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