Introducing Flat Fee Consulting for Manhattan Buyers
A: I am going live this week with what I think is an innovative new service for Manhattan buyers out there who do not want to take on a full buyers broker. A flat fee consult basically consists of all the 'meaty' parts of a buyer broker's job without the buyer broker. As the buyer, you will submit the offer directly with the listing agent while hiring me as a third party consultant for the initial property valuation, comps analysis, bidding strategy, negotiating strategy, etc.. The centerpiece of this new service is a new tool I just developed called The Digs Report. Let me formally introduce it this new concept today.
Go right to Flat Fee Consulting page for more details. The service was also featured in The Real Deal, "UrbanDigs founder launches flat fee consulting service":
Noah Rosenblatt, founder of Manhattan market trends analytics site UrbanDigs.com, launched a new flat fee buyer consulting service today. He said the service aims to help home seekers find properties' true market value, and will then guide them through the buying and negotiating process, starting with the opening bid. Rosenblatt said the service is aimed at buyers who don't trust brokers and want an independent adviser.The service was designed for buyers that are currently working 'on their own' yet would like an adviser on their team who does not have a vested interest in the transaction at closing. My fee for this service is $1,500 for 1 property consult, and an extra $500 if you need my services for a 2nd property consult.
The service will work like this:
1. Initial Property Valuation
The first step in the process is for me to verify that enough data exists to even run a comparable sales analysis with confidence. Generally, this means having enough sales data in the building that you wish to place an offer in.
Just like any buyer broker would require, I will need access to the target property to inspect: views/exposure, layout, condition, building amenities, etc..
2. Comparable Sales Analysis
What is the place you are about to bid on worth in today's market?? The meat of the buyer brokers job!
As your outside consultant, I will perform a Comparable Sales analysis using in-building sales as well as current inventory trends for your local Manhattan submarket. A two-page PDF report will be produced with my findings as well as Fair Market Value range estimates for where I believe the target property may trade in today's market. Below is a screenshot of this report; please click on the image below to visit the buyers consulting page where you can enlarge these images.
*Actual Digs Report for a client analyzing 77 Seventh Avenue, Apt 18DAs with any comps analysis, the following adjustments will be made:
a) Time Adjustment
b) Floor Adjustment
c) Renovation Adjustment
d) Size Adjustment
e) Special Features Adjustment (think terraces or fireplaces)
3. Devise a Bidding Strategy
The next step in the process is to discuss the analysis with you and devise an initial bidding strategy before submitting the offer. This includes getting to know how the analysis jives with your affordability and perception of the target property's value, as well as keeping in mind where you would like to go to get the deal done.
Since I am not representing you as a 'Buyers Broker', I will never have any contact with the selling agent. Rather, I will be the 'guy behind the curtain' advising you every step of the way as the negotiation begins.
4. Submit The Offer
Submitting your offer the right way helps your chances of getting the deal done immediately! At this stage we probably know where your initial offer will come in, which leaves writing up the offer letter the last job to do. I will help you to create your initial offer letter and ensure that you are being presented in the best light to the seller.
In the end, a motivated and well presented buyer will have more pull should the negotiation end with a gap. After all, you never really know how low the seller may go until the risk of losing the deal presents itself. Properly presenting your strengths and showing the seller that you are 'ready to go' with all ducks in a row is a vital piece to the puzzle.
5. Negotiating Strategy
In a perfect world, all negotiations will be straightforward and simple. Let me just say, its not a perfect world! Negotiating is an integral part of a real estate agent's job! There is a reason why we are called "brokers" and there always is a brokering element to the negotiating process.
Nobody expects buyers to be experts in negotiating, especially in a market as fast paced as Manhattan is. There is protocol here in starting the process out and there are varying strategies that could be implemented during a negotiation depending on how the process plays out. With years of Manhattan sales experience and 50+ closed deals, I will be able to pass on the experience gained from representing both successful and failed negotiations in the past. Even top brokers don't secure every deal and the key is knowing how to handle every twist and turn that may pop up during the negotiation process.
In this stage, I will act as your adviser behind the scenes as the seller counter's your initial and updated offers.
5. Sign The Contract / Walk Away
After the negotiation is complete and all terms are agreed to, you will face two choices:
a) continue and move forward with attorney phase
b) walk away
At this stage, my job comes to an end as your consultant. Of course, I will make myself available to the buyer as needed during the course of the attorney process should any hiccups arise and guidance is needed. Since there was no representing 'Buyers Broker' for the transaction, when contracts are executed the seller broker will be responsible for your board package preparation to get to the ultimate closing.
Simple. Clean. One-time service. Perfect for buyers that want to work on their own, yet feel they can use some assistance when the right property presents itself!
Any questions, please feel free to email me!
Posted by noneedforbroker
Wed Apr 20th, 2011 08:11 AM
Noah, it is an interesting idea from the standpoint of a buyer who from day 1 of looking at Manhattan property had zero interest in utilizing a buyers broker.
We already made our purchase so this idea is too late for us, but I can see the benefit of having your advice during the bidding and negotiating stage of the purchase process. $1,500? A bit pricey, but I guess if you are buying a million dollar property you can't make that argument. My only question I guess is how will this affect buyers out there that do want a full service buyer brokers? Would you still offer that?
Posted by urbandigs
Wed Apr 20th, 2011 08:48 AM
Yes, traditional buyer broker services are still my specialty. I no longer work with sellers, but that will change in about 6mos to a year or so when I'll introduce a fee service for sellers.
The way I view the buy side business in Manhattan RE is simple. There are three types of buyers:
1. Buyers that absolutely DO NOT want a buyer broker and want to work alone
2. Buyers that absolutely NEED a traditional buyer broker for the entire buying process
3. Buyers that are on the fence, are looking, and may or may not use a buyer broker depending on how things play out
This service is geared to #1. Thats clear. The buyer that never intended to work with a buyer broker anyway.
My current buyers, #2, have no interest in this flat fee service. Rather, they want to keep things the way they are now working with me as their buyer broker.
In regards to #3, I think this service will be of interest to them and they may convert to a traditional buyer broker type of service. The point is, YES, I absolutely still off traditional buy side broker services for Manhattan buyers and that is by far the preferred type of service as of now. The concept announced today allows the #1 buyers to stay as #1 buyers yet get my advice/guidance should they want it.
Posted by uwsider
Thu Apr 21st, 2011 05:51 PM
Just to clarify, whether the seller accepts the offer or not (or I get outbid by someone else), I still pay you $1,500.
Is it $500 for next ONE property, or $500 for each property until a bis is accepted?
Personally, my initial feedback for this service is not so optimistic given the number of bids a typical buyer goes through before an accepted offer. Not to mention, the majority of your clients (website visitors) are "value-based" so the the chances of below-ask being accepted are generally low.
Posted by urbandigs
Fri Apr 22nd, 2011 12:55 PM
uwsider - Yes, if I go in and do the property visit, the market analysis, the fair market value opinions, and consult throughout bidding process and buyer decides for whatever reason NOT to take sellers bottom line or walks away, I still get paid. Maybe they pay me the consulting fee to confirm what they though, that a property is way overpriced and sellers bottom line is not realistic at all with todays market. Who knows
Second, yes, each one thereafter would be $500.
This is targeted to a small subset of buyers that exist in all markets, hot or cold, who 100% want to work on their own but perhaps want access to me for help when they find the place they want to bid on. I expect this to be less than 5% of my business. I do not expect this to be an industry changing service, but I do expect fee based models to continue to evolve out there in this market.