How brokers beat the web
With real estate websites and blogs booming, anyone entering the NYC market has more than enough information available in a flash (often for free or a small fee).
It doesn't take a broker to figure that out.
But for the real brokers of New York City, that means having to reinvent themselves.
"Ten years ago, brokers were the guardians of information. That's just not the case anymore," said Gordon Golub, director of rentals at Citi Habitats. "There's a big impetus placed on the brokers now to prove their value and provide great customer service."
So is the market for real estate brokers going to collapse? Don't bet on it.
Here's how brokers are staying relevant in the digital age:
Putting the focus back on service
Because the average NYC dweller can do a lot of the apartment hunting on his or her own, agents need to assure clients that they're getting a service worth paying for.
"A big issue is saving people the time of poring over listings, but it's also about providing a level of service that technology can't provide," Golub said.
"People are willing to pay for good service, and when the consumer can get a higher level of customer service and hospitality, it makes all the difference."
Helping sellers price things right and stand out
While it's technically possible to sell an apartment by owner - sans broker - it's a very challenging process. Colby Sambrotto, founder of ForSaleByOwner.com, could tell you all about that: He actually gave up on his own Manhattan condo listing and hired a broker to do it for him.
"New York City is a very hostile FSBO [for sale by owner] market," said Teri Rogers, founder of BrickUnderground.com. "If you're going to sell by owner, you're going to cut out a huge audience of people who are looking for apartments with brokers. You'll also get a lot more low-ball offers, because buyers think you're saving so much money on the broker's fee."
"There's a real bias, and many buyers' brokers will blackball an FSBO listing," she added.
So when it comes to selling an apartment, real estate sites tend to complement brokers rather than replace them. They help sellers and brokers compare listings that are selling with those that are not.
"They've definitely made me be a better pricer," said Brian Lewis, an agent and EVP at Halstead. "A good agent will always advise a seller to price with the properties that are moving - not with the ones that are just sitting there."
Working with buyers to navigate the 'Wild West'
For buyers, there really isn't a reason not to use a broker, since the seller usually pays the fee. (Typically, the 6% broker fee is split evenly between the buyer's agent and the seller's agent.)
But real estate sites do help potential buyers compare prices and determine a proper bid.
"The Internet is the Wild West," Lewis said. "You still need a smart, aware, active and busy agent to put things in context and sort through all the data. We are the interpreters of the value. Sometimes a buyer will see that two apartments in the building are on the market for much different prices. They won't know the reason - whether it's light, view, renovations, whatever. That's for the broker to explain."
Andrew Barrocas, founder of the real estate brokerage MNS, said he tells his agents to focus on a niche.
"People don't call us asking to find them a two-bedroom apartment anymore. They call us and say, 'These are the 12 listings that we want,'" Barrocas said. "So in order for an agent to be extremely succesful, they need to be knowledgeable about a certain niche. They can be the pied-à-terre specialist on the Upper East Side, the Gramercy co-op expert ... people still want to work with specialists."