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Buyers/Listing Agent for a new construction ?

Hello,

I am looking for my first home. I contacted a listing agent who is about to show me some new homes. She also told that her builder can build some new floor plan houses if I am interested. 

I was thinking of getting a buyers agent for my first home, but now I am confused. Should I just have the listing agent and talk to her builder for any new floor plan houses or go for a buyers agent to help me ?
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January 22 - Nashua
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Answers (16)

Thank you all for the comments.

Honestly now I am more confused. But at the same time, it made me to read more about the legal terms and processes involved.

>>Please excuse me as I am going to ask some really silly questions as a first time buyer. 
Your questions are just, this is not an easy subject to understand on the first go round.

>>>Here is my scenario:

>>>Lets say I am going to a real estate agency and meets an agent. I put forward my future home requirements.

>>>1. If the agent already has some listings in hand, will that agent be my " buyers " agent or represent the     listing as a " sellers " agent ?
The agent can be a dual, but cannot tip any info one way or another to make the playing field unfair. Think of this as two lawyers representing someone in court. You have an attorney for the plaintift and one for the defendant. In this case, the judge is weighing in, with no attornies present. And his utmost responsibility is that both parties walk away with a fair shake.


>>2. If the agent is showing his listing as a sellers agent, I suppose I should go for a buyers agent to             represent my interest. But is it recommended to hire a buyers agent from the same agency or should     I go with another agency ?
   You can certainly go to the same office and hire a buyers agent. The name of the game is a level playing field. Otherwise, everyone works for the seller, no one works for the buyer and the buyer, first time buyer, with no knowledge, gets burnt. The game is to assure that YOU get a fair shake from get to go. That house is a darn big investment you are about to make.

>>>3. If the agent does not have any listings in hand, and agrees to find some houses for me, does it mean     that agent can be my " buyers" agent if we have an agreement in paper ?
In paper. And most shops will show you a place or two then discuss the sellers then the buyers side of the game. The reason for a buyers agent is in past everyone worked for the seller because they were paying the bill. Now everyone pays and everyone wins and no one gets hurt.



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May 07
The listing agent represents the seller/builder and will look to get the best deal for the seller. Not only is it important to use a buyer Agent but one who is WELL experienced with new homes. not all agents have worked new construction. It calls for specific tasks re-sales on existing homes do not have. Most builders will not come down on their base price, the key is to negotiate on lot choice, extras and upgrades. Once you start looking at homes with a builders agent, it may be too late to bring in a buyers agent without costing more money. A Buyer agent gets paid in most cases a fee from the listing agent. Some may charge extra so be careful. Once you see a home with a builder, they often will not pay a buyer agent a fee for that buyer.and would come out of your pocket. If you have any questions or need any assistance please feel free to contact me. 
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January 26
Those are some fantastic follow-up questions and those are the scenarios where it gets complicated. In NH here is what you are looking at.

First thing to keep in mind is that until you have signed a Buyer Agent Agreement, any agent you speak is working for the Seller. DO NOT share any information that you would not want the Seller to know as they are required to share that information. NO CONFIDENTIALITY!

1. In this situation, it would depend on the office and the way they are set up. NH allows for Designated Agency, meaning that a person in the listing office can act as a Buyer's Agent if they have followed the requirements for firewalling the potential Buyer's Agent from the listing. Something to ask about when you get there. If they do not do Designated Agency, then Disclosed Dual Agency is a possibility. Our office doesn't allow for either as we do not want the appearance of a potential conflict of interest. Ask them what they are willing to offer should you decide to offer on one of their office listings and bring in a Buyer's Agent. Many have a recommendation for a Buyer's Agent that they have some sort of compensation agreement worked out for this situation.

2. See most of what I said in #1. I personally am a believer in a different agency when it comes to having Buyer Representation just so there is no question of a conflict of interest, but a proper Designated Agency could work as long as the Broker and Agent can keep their perspective on who they are working for.

3. Yes. That agent can definitely be your Buyer's Agent.

Two more things to keep in mind.
1. If you see a listing with one agent/agency and then bring in another agent/agency, compensation for the late arrival can get complicated. Unless the late arriving agency is able to make some arrangement with the listing agency (or agent that showed you the property) then you may have to pay their compensation. This is the most important reason to not set up a showing, call another agent or go to an open house once you have started working with an agent that you like. Ask the agent you speak to about the best way to protect your position.
2. When you sign a Buyer's Agent Agreement, the technicality is that you are signing it for that entire office. With the exceptions of Designated Agency, every agent in that office is working for you. So, if do not like that particular agent, but are ok with the agency, you could ask the Broker to assign you to someone else. Doesn't happen very often, but it is a reality and your right should you feel it is warranted.

I hope that helps. You can also ask these questions to the agents you call and see how they answer.

Good luck!
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January 24
Profile picture for Aparna Vysakh
Thank you all for the comments.

Honestly now I am more confused. But at the same time, it made me to read more about the legal terms and processes involved.

Please excuse me as I am going to ask some really silly questions as a first time buyer. 

Here is my scenario:

Lets say I am going to a real estate agency and meets an agent. I put forward my future home requirements.

1. If the agent already has some listings in hand, will that agent be my " buyers " agent or represent the     listing as a " sellers " agent ?

2. If the agent is showing his listing as a sellers agent, I suppose I should go for a buyers agent to             represent my interest. But is it recommended to hire a buyers agent from the same agency or should     I go with another agency ?

3. If the agent does not have any listings in hand, and agrees to find some houses for me, does it mean     that agent can be my " buyers" agent if we have an agreement in paper ?

Again, I appreciate the kind of response I got for my question. 

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January 24
I highly recommend having a Buyer's Agent, also called Selling Agent.   Do so with an Exclusive Buyer Representation Agreement or equivalent.

A quantity builder has a "Marketing Budget" and your agent is paid from that budget, it only makes sense from an accounting/tax rule.   A custom builder may only build a few houses a year and not have a marketing budget  but they would be well advised to have one.



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January 23
You realize that the listing agent represents the seller / builder, so I guess the answer is: are you tied to living in this development? Because, if you are, then basically, you are a customer and the real estate agent is the salesperson, just like in a store.

All the best,
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January 23
Profile picture for SteadyState
Jim -

I stand corrected. It says under Buyer Agency from NH:

"A buyer agent is a licensee who acts on behalf of a buyer or tenant in the purchase, exchange, rental, or lease of real estate. The buyer is the licensee's client and the licensee has the duty to represent
the buyer's best interests in the real estate transaction"

1. A licensee can only be a SALESPERSON!
2. More over a licensee's only obligations are Confidentiality (even here NH advises clients NOT to disclose to agents  any information that harms the bargaining position of the customer), b) Loyalty, c) Lawful obedience, d) Promotion of client's best interest, and e) For a buyer - put the buyers/sellers interest first!


NH is better than most states, something I need to concede as it actually defines a "buyers agent" as a salesperson who should consider the buyers best interest. But this definition also fails to legally define the obligations beyond the vacuous, subject to the readers interpretation, "buyers best interest". But the definition does exist in NH wheras in most states (for example California) in the agency declaration legal RE contract, there is no mention of buyer agent. Only selling agent and listing agent can be found.

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January 23
SteadyState would be absolutely correct if we were discussing the types of LICENSE that the NH Real Estate Commission issues. They do issue only two types of LICENSE. One if for a Real Estate Agent  and one for a Real Estate Broker.

HOWEVER, a Buyer's Agent is a different type of RELATIONSHIP allowed by the NH Real Estate Commission. It is not a specific LICENSE that is issued. This link will take you to the Brokerage Relationship Disclosure that the NHREC requires to be provided to a Consumer at the first meeting. It does a quick description on the 2nd page of each of the types of Relationships that are practiced in NH.
Here is a list from the back of that disclosure.
1. SELLER AGENCY (RSA 331-A:25-b)
2. BUYER AGENCY (RSA 331-A:25-c)
3. SINGLE AGENCY (RSA 331-A:25-b; RSA 331-A:25-c)
4. SUB-AGENCY (RSA 331-A:2, XIII)
5. DISCLOSED DUAL AGENCY (RSA 331-A:25-d)
6. DESIGNATED AGENCY (RSA 331-A:25-e)
7. FACILITATOR (RSA 331-A:25-f)
8. ANOTHER RELATIONSHIP (RSA 331-A:25-a)

I hope that clarifies any confusion. If you want to know more you can also click on the Consumer Information link off http://www.nh.gov/nhrec/. That has more information on how to protect yourself as a consumer.

Again, best of luck!
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January 23
Profile picture for SteadyState
Jim writes:
"A Buyer's Agent (when you have a contract for representation) is NOT just a marketing term, but a legal description of the Fiduciary Relationship that a Buyer's Agent has with the Buyer. That includes confidentiality and reasonable care in protecting and helping you in the homebuying process. This is actually a legal term set by the NH Real Estate Commission with minimum standards of conduct."

I went through the site http://www.nh.gov/nhrec/. I believe that you are uninformed or deliberately made a false statement of fact. The NH Real Estate Commission issues only two types of licenses for individuals:

1. Salesperson license
2.  Broker license.

As I said there are Brokers, selling agents that list properties and selling agents that sell properties.

Care to admit that you misled us when you claimed that the NH Real Estate Commission has a legal term for buyers agent?

Is there anything else we should fact check when you post?
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January 23
Wow, there is some good information in this thread and some not so helpful.

Since I do close to 80% of my business as a Buyer Agent and work in NH I have a little bit different take on this.
1. I agree with a number of posters that if you are thinking that you may want a Buyer's Agent it is a good indication that you should have one!
2. If you think you want to have a Buyer's Agent and you have not seen the house(s) yet, then you need to cancel the showing until you are represented. If you see a property with the listing agent and then bring in a Buyer's Agent, the compensation for your agent becomes complicated. Better to wait and see it with your representative.
3. A Buyer's Agent (when you have a contract for representation) is NOT just a marketing term, but a legal description of the Fiduciary Relationship that a Buyer's Agent has with the Buyer. That includes confidentiality and reasonable care in protecting and helping you in the homebuying process. This is actually a legal term set by the NH Real Estate Commission with minimum standards of conduct.
4. You MIGHT have to pay compensation to your Buyer's Agent. The compensation of your agent is negotiated between you and your agent/agency. How much they get paid and how that pay is netted out over the transaction is set when you negotiate a Buyer's Agent Agreement. There is no standard commission (that would be a violation of federal law), but each office sets their expected commission structure based on the type of transaction.
5. Depending on your situation, you may ask for the Seller to contribute to your closing costs (including your Buyer's Agent compensation) or not. Just because you have a Buyer's Agent, doesn't mean that Seller will automatically raise the price.
6. If the builder is using an agent then there may already be compensation built into the Listing Agreement for a Buyer's Agent (Standard NH Listing Agreement from NHAR has that possibility built into the contract). Not using a Buyer's Agent doesn't necessarily reduce the amount that the Builder is paying to sell the property, but may mean a larger commission to the listing agent showing you the house. It is all part of the negotiations that the listing agent and the Seller had when the Listing Agreement was signed.

I know two agents in that area that might be able to help you. They work for different agencies, so if 1 of them is representing the Seller you can go to the other.
Peter Schwartz of Coldwell Banker Residential Brokerage
Tiffani Frisella of Keller Williams Realty Metro
NO Referral Fee. I know each of them from work with the MLS and have found them to be honest, thoughtful and caring for their clients. I have not spoken to them, but you can google their contact info if you choose.

Best of luck!
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January 23
I would recommend that you get a buyer's agent.  The listing agent, by law, has to look out for the best interests of the builder.  The buyer's agent will be able to get plans from the listing/agent builder for you to review.  I would go with your intuition and hire an agent to look out for YOU.
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January 23
Profile picture for sunnyview
"I was thinking of getting a buyers agent for my first home"

If you are confused or have questions, then hiring a good, honest buyers agent is a better way to go than using the builder's agent to buy. It's true that builders may make up some of the commission cost at your expense, but relying on a dual agent when you are inexperienced in real estate is a bad idea. Your gut is telling you that already. Listen.
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January 22
Profile picture for SteadyState
For a new home you do not need a selling agent (this is legal term used in RE contracts - buyers agent is just a marketing term used by agents to make consumers less anxious about the inherent conflict during the home purchasing process).

Note: If you hire a selling agent ("buyers agent") the new home development company will have to pay your agent a commission (typically 3%). Guess how the new home developer will make up this cost? From you - either increasing the cost price or reducing the features/functions in your home.
Your options:
1.If know the market and fair market value of the property and are comfortable negotiating; arm wrestling with the sales person of the new home for price reductions/concessions/enhancements, etc.)
 then  you can visit one or more  new developments without an agent. Once you identify the home you like ask a RE attorney to review the contract.

2. If do not know the market and are not comfortable with negotiating then hire a selling agent.
 
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January 22
You should absolutely have your own buyer's agent! A buyer's agent is of no cost to you, and they will represent you and negotiate for you with the builder and/or listing agent. 
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January 22
Hi,

I would suggest getting a buyers agent to represent you as the listing agent primarily works for the seller. [self promotion deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
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January 22
Depends, you have to trust your gut.  If you bring in a buyer's rep it will cost the builder more money which of course is passed off on the consumer, i.e. not as many free up grades.  
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January 22
 
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