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Can an agent typically get a better price on a builder's existing new home than I could?

clydesim
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clydesim

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The agent selling our current home feels he can do better than we can on a new home purchase.

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September 13 - Austin

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socal_engr
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socal_engr

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"Typically?"...I'll have to say a qualified "yes". But, only because way too many buyers are ill-informed and unprepared for the experience.

Just like any purchase, if you walk in the front door without having done your homework - you're going to get hammered.

With all of the resources available today, it doesn't take much effort to get a feel for prices of new and existing homes. With this information and just a little bit of actual footwork (i.e., visiting various new home constructions in the area), it is very feasible to get a feel for how quality, level-of-amenities, lot size, applicable HOA fees, etc. are going to affect the basic cost/sq/ft.

The real effort is in following through on the build-out and making sure that you get what you paid for, that all agreements and concessions are in writing, etc.

If you're willing to educate yourself, then the answer changes to "no".

p.s. Whether you go it alone or with a realtor, think about getting your own home inspector to periodically check on progress and let you know if they see anything that should be questioned. The cost is minimal, but having the pair of objective eyes can be extremely valuable.

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October 21

Terry Williams,GRI,CLHMS, "Terry Williams GRI"
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Terry Williams,GRI,CLHMS, "Terry Williams GRI"

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I would say almost 90% of the time, we can usually negotiate better pricing and terms for our buyers. I just closed one where my buyer didn't think she needed an agent, and she probably didn't. However, it wasn't until after she got her tax bill and caled me for comps to protest her taxable value that she realized how good of a deal I was able to negotiate her. She spoke with her neighbors who did not use one, and found they all generally paid much more for theirs, and also then owed much more. However, if it is a brand new agent who doesn't know people higher up with the builders, then, probably, no, they won't get a better deal... We experienced agents know where to look at the comps, what builder books to preview that we subscribe to, to find the best deals. We also get paid out of their "advertising" budgets, not out of the sales price. So, in essence, it doesn't cahnge what you pay for it at all.

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October 21

Don Groff, "Austin Texas Realtor"
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Don Groff, "Austin Texas Realtor"

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Unfortunately you can never know the exact answer to that question. As a Realtor I am very good at negotiating for my clients and that is a big part of the service I perform for them. Talk directly to the builder and ask them if they would reduce the price without using a Realtor. Most will tell you there is no further price reduction for not being represented but even if they do how would you truly know you are getting a good deal?

Realtors have access to the MLS (not the public version but the full MLS) so they can pull up recent and past sales that do now show up in the consumer MLS on many sites. It's information like this along with the ability to strongly negotiate for their clients that is the true value a Realtor brings. Make sure your Realtor is well versed in the market you are looking to buy in.

Most builders also try to force you to use their financing. Using their lenders, appraisers and title companies... With all the new regulations coming into play I still can't believe they still allow this.

So there you go... you may never know the answer to your question but the more people you have on your side and the more information you can obtain the better deal you will get in the end. I like those odds... but of course I am also a Realtor.

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October 20

LiveHereNext
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LiveHereNext

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I would like to add to this topic this very small but hopefully impactful message.

"When purchasing from a Builder, a buyer that uses a Realtor compared to a buyer that comes in themselves will spend the exact same amount of money on the very same home."

I believe new home purchases work on a very different playing field than just purchasing any other home on the market. Just my opinion.

But we dont lower our listing price, even if an agent is involved,

Wynter

Rausch Coleman Homes

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October 07

Isklopot
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Isklopot

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The key to this is the "new home purchase" phrase--I interpret this to mean a new construction home, for sale by the builder. The builder knows exactly what he spent on the land, site prep, and house (both base and options) and what he needs to cover overhead and profit. He also has strong incentive not to lower his "list price" and anger all those who have/are buying from him, hence the normal tactic of keeping prices untouched but adding $20k in "free" options.

For the realtors listing the benefits of using them to negotiate--can any give real-life examples (not the chaff posted) where they saved buyers money based on posted builders prices? i.e. "house plus options priced at $387K list; negotiated selling price of $349K, for a savings of 9.8%"? If you didn't reduce the costs the buyers paid by more than the 3% they could get by not using a realtor all you did was skim something off the process.

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September 30

stephen holben, "holben building corp"
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stephen holben, "holben building corp"

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I'm in the foruitous position of being both a (33 year) custom builder, and a (37 year broker). I find that NO, NONE, ZILCH, NADA brokers ever learn my products (or any other builder's products that I know) before they show them.In this market they seem to have adapted a one price fits all mentality, and take no (I've had this happen to my face many times) interest in learning what goes into my products or what it takes to build. This has shocked me for all of my 33 years as a builder, and absolutley confirms that a knowledgable buyer is far better off learning the product directly from the builder, settling on a price pending the appraisal, and asking for the co-op commission to be deducted or that the money be used to buy down the mortgage rate. I do and have always left the door open for any broker to prove me wrong. My contact information is on my web site: http://holbenhomes.com

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September 30

Nasta Sham, "Shamn"
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Nasta Sham, "Shamn"

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Yes an agent exposes the property to a wider market, geting the highest possible price, also because a good agent is more experienced and trained not to leave money on the table, in setting the price, quicker sale, negotiations, and getting feedback, and seperating fact from fiction, the seller could get a better net price.

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September 30

jkonstant
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jkonstant

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"for the love of all that is holy in the world" - Destined to be a Zillow classic.

A buyers agent will not necessarily save you any money. There is no proof in that whatsoever. None. Yes we can spew all these great things about training and negotiation, etc, etc but the reality remains the reality.

Call the builder and ask him straight out whether you will save money buying direct or will an agent "negotiating" on your behalf save you money. If the builder has 3% built into the price (they all do) to cover an agents pay, then I'm fairly certain you can cut that right off the top or add a few upgrades or whatever you want.

I find it humorous that agents talk about negotiating skills all the time. Well if two agents with all these skills are negotiating for their clients, how do we know if the one you have is actually the better? You don't. We all use the same lines and have the same information.

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September 13

NTETS, "Caveat Emptor"
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NTETS, "Caveat Emptor"

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by charging 1/10th the commission on a 250,000 dollar home.

the thing about using an attorney, its still up to the buyer to make the deal, you just let the attorney handle the paperwork, and yes, i have met attorneys with highly acute knowledge of investing to go with their knowledge of RE

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September 13

Hamp Yonce
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Hamp Yonce

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Have you ever even talked to a Real Estate attorney. Most are bumbling idiots with more overhead to cover than your average agent. They also have 8 years of school to be compensated for enduring. Please explain exactly how they are going to save a buyer money. Exactly.

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September 13

NTETS, "Caveat Emptor"
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NTETS, "Caveat Emptor"

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NO. a builder knows EXACTLY what their bottom line is, always. coming in without an agent(use a re attorney out of pocket, for the love of all that is holy in the world), you can get better concessions because they get to skip the extra 10,000 expense. you know it, they know it

its a business to them. they knew before they even bought the land what their costs and profits would be.

of course whether YOU can get you a better deal than an agent is a more personal question.

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September 13

Allen Shipman, "Allen Shipman"
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Allen Shipman, "Allen Shipman"

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Yes. A full time agent has typically negotiated hundreds of deals over their career and know all the appropriate techniques to apply to the particular situation. The agent will also have access to sold data for the area which can be used to base negotiations on. Many agents have extensive training specifically related to negotiations. Another aspect to consider is that builders typically offer agents bonuses for selling one of their homes. Many agents (including myself) pass this bonus along to the buyer to use for closing costs or a price reduction. Finally, there are many aspects of the purchase agreement to consider in addition to just the sales price. A qualified agent will be able to get you the best terms on all aspects of the contract and not just the sales price. Let me know if I can be of further assistance.

Allen

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September 13

Marice Bock, "marice1"
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Marice Bock, "marice1"

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A Buyer's Agent knows the questions to ask and the specs to look for. We have been trained to help to protect the interests of the Buyers - above our own; thus, yes, in many cases we can save money and spot problems prior to them happening and even at closing make sure you have gotten what you paid for. For example, prior to a settlement for a new construction home for over $1.5 million, where the buyer paid for an extended, flagstone, rear patio, the seller/ builder was pushing the buyer to forgive it. Had I not been there representing my client, the client would have lost a considerable amount of money and not gotten what they had wanted. Even in the case where the home is built, we are there to represent the buyer and their needs...and know how to negotiate with the builder.

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September 13

Ofe Polack, "Ofe Polack"
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Ofe Polack, "Ofe Polack"

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One of the duties of a buyer agent is to represent the interests of the buyer. If your buyer agent is a Certified Negotiations Specialist or holds any other certification like CRS Certified Real Estate Specialist, he/she would have taken courses that enable them to negotiate a better deal for you. Unless you are also a real estate agent, I dare say that probably your realtor can negotiate a better deal for you.

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September 13

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Can an agent typically get a better price on a builder's existing new home than I could?

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