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- Ed Clements, "Ed Clements"
- Contributions:6
It is true a Realtor does not make money unless they close the deal. A lot of home buyers don't realize they can negotiate with new home builders. They have a lot of incentives they can offer to make the deal better but aren't going to offer them unless you ask. Remember the sales people work for the builder and they receive a commission based on the sales price.
The builders in my area offer incentives but only if you use their financing.
The builders in my area offer incentives but only if you use their financing.
- Cheryl Talbot Real Estate, "Virginia Beach Homes"
- Contributions:674
I bet if you bring a Realtor with you before you even go to the site, you'll find that the Builder will still most likely give those incentives. You should be represented and the agent for the builder has their best interests in mind. That being said, take you Realtor with you before you ever step foot in the door. Everyone is out there trying to make it work for them so you do need someone who's looking for you. Thank you for your question.
- Whit Suber, "Top Broker in SC"
- Contributions:165
It's simple. The builder is just offering the buyer an option. A choice between representation and a opportunity to save money by taking on more responsibility, more risk.
It is laughable to hear these agents blather on as if the only risks in the world are associated with not having representation. A buyer could hire a lawyer to review the contract for $500. They would receive far more expert analysis on the contract and net $9500 for their "risk".
Agents spend two weeks in a tech-college class and come out believing they are the only people in the world smart enough to hire an inspector or read a contract.
Most clearly have no understanding of the balance of costs - benefit. In this case, if you use an agent you MIGHT avoid some risk - if you don't, you WILL SAVE $10,000.
Ultimately agents are truly focused in on only one risk... this risk that they don't get paid!
It is laughable to hear these agents blather on as if the only risks in the world are associated with not having representation. A buyer could hire a lawyer to review the contract for $500. They would receive far more expert analysis on the contract and net $9500 for their "risk".
Agents spend two weeks in a tech-college class and come out believing they are the only people in the world smart enough to hire an inspector or read a contract.
Most clearly have no understanding of the balance of costs - benefit. In this case, if you use an agent you MIGHT avoid some risk - if you don't, you WILL SAVE $10,000.
Ultimately agents are truly focused in on only one risk... this risk that they don't get paid!
- Linda Walters, "SageBuyerAgency"
- Contributions:11
You should NEVER buy from a builder without your own agent and/or attorney. Builders are smart, risk takers who have small profit margins and need to squeeze every cent out of the transaciton. So they can save half the commission if you do not have an agent. That is just the beginning, though. They will be able to use their contract forms, steer you to affiliated title and lending people where they can stand to profit, charge for extras that you did not know were not incuded, extend the closing date without your approval and the list of possiblilties for taking advantage of you goes on and on. I am not knocking builders--they are not committing any act that is not allowed. But they are better at this than you are. Get yourself an agent!
- LaNita Cates, "remaxagent33"
- Contributions:289
I think it would be a huge red flag to any smart buyer. If a builder is willing to offer $10,000 - they know that an agent could probably still get these things included in the purchase as well as more. And remember, $10K in "incentives" costs the builder a lot less.
- Kowitz & Freund Realty Team, "carlafreund"
- Contributions:61
Dear Richard,
Well, I think you might ask youself why a builder would offer you a discount if you don't have a Real Estate Agent Representing you and Looking out for your Best interest. What is the builder getting out of it?
After that, find yourself a very good Realtor with whom you can trust.
Well, I think you might ask youself why a builder would offer you a discount if you don't have a Real Estate Agent Representing you and Looking out for your Best interest. What is the builder getting out of it?
After that, find yourself a very good Realtor with whom you can trust.
- Fred Strickroot, "homenetyouteam"
- Contributions:47
I don't think it is good business for the builder to do this. Realtors are good allies to the builders, and there are a number of Realtors in any given area that have prospects that they can bring to the builders. Times are so tough for the builders right now, it does not surprise me that this is happening. Good business strategy, no.
- Dustin Miller, "Dustin Miller"
- Contributions:122
These things tend to divide the builder/realtor community more than unify. They can try it out though and see what the market bears...
- SouthBayProperty
- Contributions:60
Like representing yourself in a court of law to not pay legal fees. Foolish to not have buyer representation. The majority of real estate lawsuits in CA arise due to no buyer representation.
- Betty Duncan, "Betty Duncan"
- Contributions:29
In our market, most all builders are offering stronger compensation to agents for bringing them buyers. I would check on the financial health of the builder as this sounds concerning to me.
- Corey Toushin, "Corey Toushin"
- Contributions:31
The new homes industry has spiraled downwards since the beginning of the recession. Builders are trying to rebound financially and save anywhere they can. Everything is up for negotiation......dont take anything at face value in this industry. Find great representation who will negotiate the best deal possible for YOU!
- CulverCityRealtor
- Contributions:455
Oh YES it's good..Good for THEM !
- Brenda Thompson, "brenda.thompson71"
- Contributions:12
I believe this tends to happen with builders mostly, Saving money is always a good thing, I am VERY savvy and am always looking for the best deal I can get for myself or my Client. However.... I would step back and take a look at the big picture and ask myself what is really going on here.
Could it be that the seller who is offering this is just trying to get buyers and trying to save some money in a down market? YEP, MAYBE!! lets just say yes this is why.
So... with it being yes, what are the down sides for the buyer... They are the seller or are working for the seller, they are dong there job, having the sellers best interest in mind. don't think for a minute they have the buyers best interest in mind. if they do they do have the buyers best interest in mind are NOT doing their job, getting the best deal for the seller!!!
I would always recommend having a knowledgeable professional in real estate working for YOU!
How to chose the right agent?- there are many other post that address that issue and I recommend reading those.
As a side note- I would just like to add sometimes times new home builders will also recommend that having a home inspection on a new home is not needed and a waste of your money. (always pay the money and have an inspection done, it could save you thousands down the road! )
Brenda Thompson
Could it be that the seller who is offering this is just trying to get buyers and trying to save some money in a down market? YEP, MAYBE!! lets just say yes this is why.
So... with it being yes, what are the down sides for the buyer... They are the seller or are working for the seller, they are dong there job, having the sellers best interest in mind. don't think for a minute they have the buyers best interest in mind. if they do they do have the buyers best interest in mind are NOT doing their job, getting the best deal for the seller!!!
I would always recommend having a knowledgeable professional in real estate working for YOU!
How to chose the right agent?- there are many other post that address that issue and I recommend reading those.
As a side note- I would just like to add sometimes times new home builders will also recommend that having a home inspection on a new home is not needed and a waste of your money. (always pay the money and have an inspection done, it could save you thousands down the road! )
Brenda Thompson
- Joseph Moore, "Joseph F Moore"
- Contributions:71
I've seen these types of incentives before. It's not real common as usually builders are offering more incentives to the agents then the actual customers. Buyers agents bring in the business for most builders.
Without knowing any of the details I would think that most agents would be able to get you the $10K or more in incentives plus you'd benefit by the representation.
Usually incentives and additional features come during a negotiation. It almost seems like it's the best price upfront feature that the builder is trying to get you to buy into. Unfortunately this is not an automobile you are buying. Housing values move up and down.
Talk to a realtor in your area and see what they think.
Best of luck!
- Russell Jay
- Contributions:2
Hard to believe that WHIT SUBER... above... actually TOLD THE TRUTH.
READ HIS REMARKS CAREFULLLY... as anyone who can READ is capable of doing their own deal. IT's not like they write a contract using invisible ink. COMMON SENSE prevails... and the BUILDER WOULD HAVE TO PAY A BUNCH OF DOUGH to a realtor AGENT AND HIS BROKER.... to represent you. It's similar to you going to traffic court to pay a $50 fine... and NOT USING A $5,000 attorney to do so. After you read the contract... have an attorney REVIEW it... and pay him $50-$150
depending upon HOW IMPORTANT AND HOW GREEDY THE REAL ESTATE ATTORNEY IS... you will learn that the real estate attorney can not read any better than yourself... but this usually makes people feel COMFORTABLE with the deal. Buyers agents are strictly part of the GREEDY REAL ESTATE BUSINESS...as the supposed HELP they offer is very very little. You know how to say .... give you $180K for a $230K house... just as well as any buyers agent... (who would want you to offer MORE... to secure the chance of them making a commission... and really isn't representing YOUR BEST INTEREST... regardless of what they claim.... THEIR OWN INTEREST... is hard for them to ignore. The more you offer for a home... the better chance they stand of making a commission... The less you offer... the worst the chances of them getting paid a commission... as the deal must CLOSE for the realtors to get paid.
RUSSELL JAY
READ HIS REMARKS CAREFULLLY... as anyone who can READ is capable of doing their own deal. IT's not like they write a contract using invisible ink. COMMON SENSE prevails... and the BUILDER WOULD HAVE TO PAY A BUNCH OF DOUGH to a realtor AGENT AND HIS BROKER.... to represent you. It's similar to you going to traffic court to pay a $50 fine... and NOT USING A $5,000 attorney to do so. After you read the contract... have an attorney REVIEW it... and pay him $50-$150
depending upon HOW IMPORTANT AND HOW GREEDY THE REAL ESTATE ATTORNEY IS... you will learn that the real estate attorney can not read any better than yourself... but this usually makes people feel COMFORTABLE with the deal. Buyers agents are strictly part of the GREEDY REAL ESTATE BUSINESS...as the supposed HELP they offer is very very little. You know how to say .... give you $180K for a $230K house... just as well as any buyers agent... (who would want you to offer MORE... to secure the chance of them making a commission... and really isn't representing YOUR BEST INTEREST... regardless of what they claim.... THEIR OWN INTEREST... is hard for them to ignore. The more you offer for a home... the better chance they stand of making a commission... The less you offer... the worst the chances of them getting paid a commission... as the deal must CLOSE for the realtors to get paid.
RUSSELL JAY
[email removed by Zillow moderator]
- Michael Liew, "MichaelLiew"
- Contributions:33
Ask yourself, why would the builder do this? There must be something in it for him. In all probability the property is priced at least 10k over market, so he can offer you the 10k incentive. Just a marketing tactic.
- Teresa Tedder, "realtortto"
- Contributions:18
Its hard to say why a builder is really doing this. It could be that he has had a bad experience with an agent and doesnt want to deal with any Realtors as a result of this. Or it could be that he feels that the buyer would rather save 10,000 than pay a buyer agent for advice. Or it could be that the builder knows that a buyer agent could really cut into his profit by negotiating much more than 10k so he wants to try and keep the agents out so that there is one less opinion he may have to argue with.
I would get my warranty in writing and I would ask for referrals from other buyers he has built homes for and I would check with the Better Business Bureau to make sure this guy is on the "up and up". Buyers agents will tell buyers what a good and fair price for the home is, the agent will handle the negotiations and the details and ensure that the buyer isnt taken advantage of along the way. The agent knows that the builder is accountable not only to the client but to the governing board for general contractors. For some reason he doesnt want agents involved and I find it hard to believe that a buyer is going to walk in and pay exactly 10k less for the home and believe that they really got a steal because they "cut that expensive 10k agent out".
The builder probably may even take the same offer if an agent was involved to be honest. But this kind of marketing makes the buyer think that they are saving money. Who really knows if you are? Maybe you are dealing with an honest person who is genuinely trying to save you money, or maybe you are dealing with someone that has something to hide. Normally builders and Realtors work together in our area and have a great relationship and do honorable and ethical work for the buyer and all ends well. I guess it isnt that way in all areas? Good luck to you.
- Michael Helton
- Contributions:456
Whit, if I could give you 2 thumbs-up, I would have. Very well said.
- Whit Suber, "Top Broker in SC"
- Contributions:165
I would appear the developer is offering the consumer a choice.
For those buyers who place a value of $10,000 for the advice of an agent, they may choose to pay an additional $10,000.
For buyers who are comfortable in their research and their own ability to protect their interest, they can save $10,000.
There are plenty of buyers who have the good sense to conduct the due diligence and protect themselves.
It's hard for most agents to accept the fact that we are not brain surgeons. We sell houses and while I obviously have tremendous respect for the services and conveniences I offer to my clients, I'm not so arrogant to believe that it can't be done without me. There are many people who are fully capable of executing a successful home purchase on their own.
This developer is offering a choice with a cost-to-benefit risk paradigm. I say good for him.
And lastly, we all know that this has condition has been an absolute truth in on-site development sales for a 100 years. This guy is just taking the step to advertise it.
For those buyers who place a value of $10,000 for the advice of an agent, they may choose to pay an additional $10,000.
For buyers who are comfortable in their research and their own ability to protect their interest, they can save $10,000.
There are plenty of buyers who have the good sense to conduct the due diligence and protect themselves.
It's hard for most agents to accept the fact that we are not brain surgeons. We sell houses and while I obviously have tremendous respect for the services and conveniences I offer to my clients, I'm not so arrogant to believe that it can't be done without me. There are many people who are fully capable of executing a successful home purchase on their own.
This developer is offering a choice with a cost-to-benefit risk paradigm. I say good for him.
And lastly, we all know that this has condition has been an absolute truth in on-site development sales for a 100 years. This guy is just taking the step to advertise it.
- Melissa Woycechowsky, "Melsky"
- Contributions:26
Also you might want to get a home inspection before you close on the house. New homes frequently have issues that should be corrected.
- Brian&Kelsey Johnson , Broker Associate, "BrianKelseyJohnson"
- Contributions:41
usually a testament to how they conduct the rest of their business. How do they handle their warranty work when they undercut one of their biggest allies?
- Jennifer Finger, "CharlestonRealEstate"
- Contributions:103
Sounds great! However, Buyer's Agents have helped clients negotiate/save much more than $10,000 between upgrades, lot premiums, purchase price, closing costs paid on Buyer's behalf from builder, unforeseen mistakes from contractors, repair items caught before closing and last minute errors that need immediate attention. If the builder is so quick to offer $10,000, how much more do you think they may be willing to do? Your Buyer's Agent would find out.
- Glenn Thomas, "Glenn E. Thomas"
- Contributions:45
Contact a Real Estate Attorney
- Chris Wilson, "SothebysRealtor"
- Contributions:81
Unfortunately it could be. This is generally accepted as a bad practice here and developments behaving this way will eventually lose more then they will earn by cutting other professionals out of the process. However you would be giving up having a professional on your side whose sole purpose is to negotiate on your behalf. The developer is working for their best interest not yours. The Buyers agent works soley on your behalf and can generally save you thousands of dollars. Statistics have shown that those who use a buyers agent save money.
- Sharon Lewis, "Sharon Lewis"
- Contributions:3914
I am surprised to hear that , all the home communities I know of here in the Greater Raleigh area, are considerate of realtors because we generally bring the buyer. I think thats a lot of cutting off your nose to spite your face. I would bring the agent anyway and negotiate the 10K into your price or go elsewhere. The thing is, what is to stop that community from selling a few homes and then having a low ball sale after you purchase? Be very careful here. You can 'hire' your realtor for an agreed on sum and go in and negotiate that way too....I see a lot of cautions signs here.
- shasta_steve
- Contributions:448
I could not agree with Roberto more on this one. As long as the older house is in a decent neighborhood you are usually way better off buying an older house. There are tons of houses, only a few years old, in most places. Hell when they build most new houses they put crap carpet and appliances anyway. Things always look great in the model homes until you realize everything is an upgrade. You can do so many things yourself and even if you want to hire it done now is a great time to hire people cheap.
In most parts of the US, ANY new development is a bad deal. I drive buy new homes listed as "low 120's" all the time in parts of south Phoenix, when just across the street, I can find a home twice as big for 100K.
Honestly, carpet and paint are cheap, so don't be fooled by the new home smell!
Honestly, carpet and paint are cheap, so don't be fooled by the new home smell!
- Michael Helton
- Contributions:456
Connie, I think you should make the argument; it is always good to hear both sides.
Richard, you could always negotiate a contract with an agent on the side where they give you advice and review the contract for a flat fee or commission and you pay them out of pocket (you will be saving 10K).
Just negotiate well because I do not think a 3% commission is deserved. Maybe $1000 or so, depending on how much time they spend.
Richard, you could always negotiate a contract with an agent on the side where they give you advice and review the contract for a flat fee or commission and you pay them out of pocket (you will be saving 10K).
Just negotiate well because I do not think a 3% commission is deserved. Maybe $1000 or so, depending on how much time they spend.
- ConnieK_Oklahoma
- Contributions:2896
I'd be cautious as well. While it's easy to believe that this is just because that's money they wouldn't be paying a buyer's agent, it's not money that they are saving- they are passing it on to you (which sounds great and might really be).
but ...I can't help but think a person should be very careful. if the bottom line is the same for the builder, they have no real incentive to go either direction...that's motivated by something else.
it could be that it opens up the field of potential buyers. it could be something else.
I definitely wouldn't move forward without having an attorney review the contract and I wouldn't sign on the spot. I'd take a copy of teh contract, pay an attorney a flat fee to explain it and review it with you and remember...when buying a house, YOU the buyer make an OFFER to them based upon perceived value etc. it's not like grabbing a gallon of milk at the grocery store. don't pass up your opporutunity to negotiate just because they tell you there's an incentive.
I can make an argument for still using an agent, but I think such argument loses some credibiility given that I am one.
but ...I can't help but think a person should be very careful. if the bottom line is the same for the builder, they have no real incentive to go either direction...that's motivated by something else.
it could be that it opens up the field of potential buyers. it could be something else.
I definitely wouldn't move forward without having an attorney review the contract and I wouldn't sign on the spot. I'd take a copy of teh contract, pay an attorney a flat fee to explain it and review it with you and remember...when buying a house, YOU the buyer make an OFFER to them based upon perceived value etc. it's not like grabbing a gallon of milk at the grocery store. don't pass up your opporutunity to negotiate just because they tell you there's an incentive.
I can make an argument for still using an agent, but I think such argument loses some credibiility given that I am one.
- Bill Smith, "billsmith."
- Contributions:37
If you buy without an agent, request your down payment be placed in an escrow account, not the builder's general fund. Also, be sure to think about getting an extended title policy. Laws vary by state, but those 2 things may give you more protection. The builder won't mention those items in most cases, if you don't ask. The homes are probably fairly high priced if the builder offers that incentive to not use an agent, so they can save some money. I would recommend you consider a knowledgeable agent.
A new development is offering $10K in incentives if a buyer agent is NOT used. Is this good?
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