The NAR rules and rental broker commission debate dredged up a fundamental question: What value do brokers provide?
“What would you say…you do here?”
“I deal with the goddamn customers…I have people skills! I am good at dealing with people!”
That exchange is, of course, from the 1999 movie “Office Space.” I hear it in my head anytime someone suggests that brokers will need to prove their value to buyers under the new National Association of Realtors settlement rules.
The rules, which took effect on Saturday, require brokers to sign an agreement with prospective buyers — spelling out their services and how they will be compensated — before they even tour a home. With the possibility that the buyer will ultimately be on the hook for their agent’s commission, buyers may have more specific parameters for hiring a broker. They may interview more brokers than they would have under the old regime. Or they might try to go without one.
Zillow has offered an avenue for buyers to sort of flirt with brokers before taking the plunge: The company launched a short-term agreement that allows the buyer and broker to meet and tour a home without being exclusive. The agreement, which expires after seven days, is designed to let the would-be buyer meet the broker and tour a home before having to sign a longer-term, exclusive agreement.
Brokers in Chicago told my colleague Kelli Duncan that proving value to buyers could take various forms, including showing hyperlocal knowledge of the market and helping buyers navigate the mortgage lending process.
The idea of broker value has also been at the center of the debate over who pays rental broker commissions in New York. Brokers took issue with a TikTok video in which Council member Chi Ossé says New Yorkers can pay “thousands of dollars to someone who just opened a door to a place you found online.” During a heated debate on Ossé’s bill, the Council member asserted that he believes brokers provide a valuable service, but that renters shouldn’t have to pay for brokers whom they do not directly hire.
If you are a broker and figuring out how best to communicate the value you provide to prospective clients, I’d love to hear from you.
What we’re thinking about: Are you attending the Democratic National Convention? Are you hosting any fundraisers ahead of the presidential election, or do you know of real estate folks who are? Send details to kathryn@therealdeal.com.
A thing we’ve learned: Dr. Waheed Bajwa, who heads the city’s Office of Vector Surveillance and Control, is charged with combatting West Nile virus in the city. Crain’s refers to him as the city’s mosquito baron, an unofficial title that I hope catches on.
Elsewhere in New York…
— Gary Jenkins, who headed the city’s Department of Social Services for one year before going to work for Frank Carone’s Oaktree Solutions, is now joining a homeless services nonprofit, Crain’s reports. He starts at Urban Pathways next month.
— More than 500 bills await Gov. Kathy Hochul’s signature by the end of the year, Gothamist reports. Among the measures is one that would repeal a state law that classifies adultery as a class B misdemeanor. New York is one of 17 states with such a law.
— New York City Sheriff Anthony Miranda has been accused of using emergency lights and signals to avoid rush-hour traffic, the New York Daily News reports. One complaint accused Miranda of using sirens to help his adult son, who was driving in a personal vehicle behind him, to bypass traffic on their way to the Long Island Expressway, so his son could drive to work. This kind of thing has happened before.
Closing Time
Residential: The priciest residential sale Monday was $7.2 million for a 2,191-square-foot condo unit at 565 Broome Street in Hudson Square. Dana Romita, Marc Palermo and Andrew Anderson of Douglas Elliman had the listing.
Commercial: The largest commercial sale of the day was for $370 million for a 767-unit apartment building at 20 Exchange Place in the Financial District.
New to the Market: The highest price for a residential property hitting the market was $6.9 million for a 3,744-square-foot condominium unit at 535 West End Avenue on the Upper West Side. Philip Fatta, Alexandra Fatta and Darryl Sherman of Nest Seekers International have the listing. — Matthew Elo