The role of the broker - real estate broker - Column

Broker - an individual who arranges the sale or locates tenants for a person wishing to sell or lease property. While there was a time when this definition was sufficient to explain the responsibility of the broker, today it's just a small function of an expanding role. The most valuable brokers, those with the right experience, market knowledge, contacts and hands-on involvement can mean the difference between success and failure for a developer and ultimately, a purchaser.

Before a shovel is even placed in the ground or a wall is torn down, a developer will create his project team. Traditionally, the individuals essential to the success of a venture included: the architect, attorney, zoning expert and finance source. What sophisticated developers now realize is that the broker is essential to this list. While it was once acceptable to bring the broker into the fold as the project was nearing completion, progressive developers are saving time and money by recognizing the value of the on-site residential broker to the team sometimes before a site is even selected.

The broker provides an expert pair of eyes and ears for the development team and communicates the expectations of the current purchaser to the developer. The developer is provided with insights into the purchaser's needs and wants and the purchaser has a representative who can walk them through the complex purchase process (especially for a new development which bears so many different facets than a regular resale). The relationship between a broker and a purchaser, and a broker and developer consequently translates into a level of trust between the developer and purchaser.

At 19 Beach St. in Tribeca, I was able to take the experiences learned from clients at other similar projects to maximize the marketability of the units. Many of my clients over the previous 12 - 18 months had purchased smaller units at buildings throughout Tribeca. The natural next step for many of them was to purchase a larger, more permanent unit. 19 Beach Street provided the perfect opportunity. I was able to advise the developer on not only the layout configuration, but on finishing details and amenities that would be more attractive to the purchaser. Details like wiring all of the ceilings for light fixtures and offering an ample second bedroom were key to selling the units.

Today's purchasers are much better educated to the home buying process. When it comes to new development, they know what they want and what questions to ask in the pre-construction and construction phases. It's the broker's responsibility to be able to provide the answers. I'm providing consulting services for several developers of East Village projects. Most crucial to the purchasers, especially since September 11th, is the build-out. They want to see and touch their future homes. My being able to make suggestions to the developer and play a role in selecting finishes, moldings and colors for each project ultimately provides the purchaser with an end product that is unique, yet not too over customized for the developer.

Based on years of experience on current and past projects, the broker can offer input on specifics often overlooked by the rest of the development team. For example, something as simple as a bathroom door that swung in being replaced by a pocket door to maximize space can make a significant difference. I have been brought into projects where based on my consultation the units ultimately needed to be redesigned. The developer in some cases is building yesterday's request instead of tomorrow's desire. These adjustments end up costing the developer extra time and money. It's more cost effective to have the broker as part of the team from day one.

Sometimes the developer won't just listen to one expert but needs an echo from another.

"An experienced and knowledgeable broker adds tremendous depth to the development team," said Nancy J. Ruddy, president of Cetra/Ruddy Architects, a firm with extensive housing experience currently with 1,400 units on the drawing board."

In many cases, the broker provides a second "voice" for the architect in guiding the developer towards vital design/space decisions. By offering the purchaser's point of view, the broker is able to provide vital insights into the needs and wants of the consumer concerning everything from layout decisions to bathroom finishes."

For the purchaser, it's crucial to select a broker who has the ear of the development community, who knows the neighborhood you're interested in, and who is willing to make the time consuming commitment to serving as your advocate. Today's purchasers and developers can't settle for anything less than a broker willing to play a complete hands-on role in the success of a project.

I'm currently working with a developer whose experience is vast when it comes to rental properties, but limited in terms of condominium development and sales. The plans for his latest venture, two East Village condominiums, needed some fine-tuning.

The original floor plans for the property called for five units, one on each floor. I was able to advise the developer that due to the property's location, he would be more successful with a layout that offered ten units, two on each floor. We redesigned the building while the foundation was being poured.

The role of the broker is further intensified when it concerns development projects in the $10 to $40 million range. The limited budget that often accompanies smaller development projects doesn't allow for the extras -- a public relations budget, sales office support and a marketing team to show the units. In these situations the right broker is even more crucial to the project's outcome. A broker who has a strong referral base, a substantial client following and the respect and trust of his/her peers in the brokerage community, provides the developer with a built-in marketing campaign. The purchaser gains an extra level of confidence and benefits from the broker's experience and knowledge.

COPYRIGHT 2002 Hagedorn Publication
COPYRIGHT 2002 Gale Group