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Replies (21)
- James Allen, "jallentre"
- Contributions:5
That's interesting. Especially since buyer representation is free. That is the job of the agent to be able to properly represent the client without the client having to do "homework". I've stopped doing my own taxes years ago. I enjoy letting the experts handle my affairs that could cost me thousands of dollars. We need to get back to the consumer feeling the need for a Realtor and regain credibility.
I close a lot of builder loans & a good 70% don't use a realtor. The advantages I see are dollar obvious. The new buyer receives more incentives which can be down payment assistance, closing costs or upgrades(stainless pkg.,granite counters etc.). It really just depends on the builder. Not all builders compensate realtors the full 3%.
The huge down side to not using a realtor is the market analysis. A warranty comes with the home, so its not like a realtor is going to find something majorly wrong with the property.
Someone purchasing new construction needs to be dedicated to staying in the neighborhood a good 2-5 years after the builder closes out. Especially if the new buyer only puts 10% or less down. After all, they do control the value of your home until neighborhood is closed out. Scary ain't it?
- Dianne McKnight, "dimc"
- Contributions:123
Why would a consumer need an agent to represent them when building new construction?
1) The site agent represents the builder, they are not there to "help" the consumer.
2) A buyer's agent can inform the client of issues in construction, knows what questions to ask, you don't always get what you see.
3) How many of those foreclosures were with customers that had no representation? A lot of them! Funny how a house appraises for the builder, but when you go to resale, it doesn't, ever wonder how that happens?
4) An experienced agent will save the consumer money building with new construction, builders do not discount the price because the consumer has no representation. Real Estate is a huge investment, why not use a professional that has years of experience and knowledge to put to work for you. It is like trying to be your own attorney. Not usually a good idea.
- Robert Janezic, "JanezicRealty"
- Contributions:31
A common misconception when purchasing new construction is that you don’t need an agent.
- That friendly and helpful salesperson works for and represents the builder’s interest and the builder’s interest only. Shouldn’t you have independent representation?
- An agent can give you objective professional advice and insight during all phases of the process, such as contract, construction, walkthrough, and closing.
- An agent is your exclusive advocate and will help you understand your contract and obligations including when to schedule construction inspections.
- While the sale representative will always give the appearance that sales prices are non-negotiable, and experienced agent can use recent and historical sales data to aid in the negotiation. Data that is not always readily available during new construction.
- An agent has knowledge of and can leverage contracts, real estate law and the real estate community when things go awry with the builder. AND THEY CAN AND OFTEN DO.
- A buyer’s agent costs you nothing as the builder has allocated a sales commission to be paid to a buyer’s agent as most consumers are represented for the above reasons. When a buyer does not use a buyer’s agent, the builder either pays their sales representative a higher commission or pockets the savings.
I have dozens of examples of situations where my clients were better off having me on their side. Once just the mention of a good faith estimate saved my client $4500 when buying new construction when the builder's inhouse loan have an unexpected charge.
- Nathan Wolf, "natewolf"
- Contributions:1825
Looks like all the Realtors want you to use a Realtor.Â
How convenient for them.
But the reality is this. A Realtor is a professional who will represent YOU. And the builder is NOT working for you, and they are NOT your friend. PLUS, did you know that builders often pay bonuses to Realtors for bring in a Buyer-- in ADDITION to the regular commission.
You can negotiate all of these items with the Realtor up front... and if you hire a good Realtor, then they really will work hard for you. PLUS, the builder is NOT going to give you a reduction in price if you DON'T use a Realtor, so you're just paying them even more to NOT work for you... why would you want to do that?
How convenient for them.
But the reality is this. A Realtor is a professional who will represent YOU. And the builder is NOT working for you, and they are NOT your friend. PLUS, did you know that builders often pay bonuses to Realtors for bring in a Buyer-- in ADDITION to the regular commission.
You can negotiate all of these items with the Realtor up front... and if you hire a good Realtor, then they really will work hard for you. PLUS, the builder is NOT going to give you a reduction in price if you DON'T use a Realtor, so you're just paying them even more to NOT work for you... why would you want to do that?
- Nathan Wolf, "natewolf"
- Contributions:1825
Many builders are now employing Realtors as their sales agents. This reduces their liability and their insurance.
REMEMBER, the seller's agent works for the seller. ONLY.
They are not required to tell you about any special deal, or option, or anything else that is not in the seller's interest. In fact, they are REQUIRED BY LAW in North Carolina, NOT to offer these facts to you, since they REPRESENT THE SELLER ONLY.
If you are you are on your own, it is up to you do know what you are doing. And if you don't hire a professional.
In my market in Charlotte NC, where most builders are represented by their own Realtor, it is a VIOLATION of the Realtor Association for them to reduce the sales price by the commission you would "potentially" save by not having your own Realtor. In other words, if there is 5-percent overall commission on a home, then the Seller's Agent will get ALL OF THE 5-PERCENT, and cannot / will not reduce the rate in half if you don't have your own agent.
REMEMBER, the seller's agent works for the seller. ONLY.
They are not required to tell you about any special deal, or option, or anything else that is not in the seller's interest. In fact, they are REQUIRED BY LAW in North Carolina, NOT to offer these facts to you, since they REPRESENT THE SELLER ONLY.
If you are you are on your own, it is up to you do know what you are doing. And if you don't hire a professional.
In my market in Charlotte NC, where most builders are represented by their own Realtor, it is a VIOLATION of the Realtor Association for them to reduce the sales price by the commission you would "potentially" save by not having your own Realtor. In other words, if there is 5-percent overall commission on a home, then the Seller's Agent will get ALL OF THE 5-PERCENT, and cannot / will not reduce the rate in half if you don't have your own agent.
- Terry Rogers, "T D Rogers"
- Contributions:26
Would you go court without bieng represented by an attorney? Of course not. Buyers are represented without charge by a Realtor®. The builder represenative works for the seller/builder not the buyer. Are you paying more for the home if you use a realtor. The answer is again NO !
The builders have a marketing fund that the commissions are paid from.
Please contact me if anyone would like a more detailed reponse to this question.
The builders have a marketing fund that the commissions are paid from.
Please contact me if anyone would like a more detailed reponse to this question.
- Nathan Wolf, "natewolf"
- Contributions:1825
Let me give you an example of a situation I've seen this last week:
Home by a major home builder is on the market.
Client walks into sales center. Sales Agent (who works for the builder) knows the builder can take a $10,000 reduction on a particular home. But if the Sales Agent makes the sale on that home, the agent gets the bonus of $10,000. And remember, the Sales Agent is LEGALLY REQUIRED BY STATE REGULATION to REPRESENT THE SELLER.
The Agent is not legally bound to tell you about the price reduction. The Agent is only legally bound to make the sale that is in the best interest of the seller.
The Agent Remarks in the MLS System state that the builder will consider an offer $10,000 Less than asking price. But this information is not represented in the Sales Price that an online buyer will see. So, the only way to know about this is to have a MLS Member (Realtor) as your Buyer Agent.
So, sure, you can do it yourself. You can also do your own inspection, and you actually don't even need an attorney to close the transactions-- all you need is a notary public. But they fact is that Realtor/Brokers are required to pass strict courses and yearly update education to help you with all aspects of real estate transactions.
- Nathan Wolf, "natewolf"
- Contributions:1825
The only reason I hear from buyers not wanting a Buyers Agent involves their desire to "save" the typical 2.5% commission on a sale. But that 2.5% commission is either paid to YOUR agent or it's paid to the Seller's Agent. So, it's a "use it or lose it" situation-- not actually a "savings" situation. It's more like "buy one get one free"... And if you don't use your own agent, the other agent makes the whole commission. And don't think that Sales Agents who work for the builders don't make commissions and bonuses for reaching their sales goals. This is a business transaction for the builder. And the builder is out to make a profit. They even want you to use thier lending companies, because they can make even more money off of you-- for the next 30-years.
Buyer beware.
This is why many reputable builders are actually hiring Realtors to represent them as Seller's Agents. And they are suggesting and some even REQUIRING, that the Buyer have an agent. Because it is a double liability for the company to deal with a Buyer who is unrepresented.
Buyer beware.
This is why many reputable builders are actually hiring Realtors to represent them as Seller's Agents. And they are suggesting and some even REQUIRING, that the Buyer have an agent. Because it is a double liability for the company to deal with a Buyer who is unrepresented.
- Thomas Hoffman, "Thomas Hoffman"
- Contributions:31
've sopld many new construction homes, and there is always issues. Not that anyone could not figure it out, bu t often when we are tied up emotionly to a property, we may not make theright choice. A Realtor will walk you throught what is resonable, will be aboe to help your hire a trusted proffessiona inspector that willact as your expert eyes, will talk you off the edge if the deal gets rough, and most importantly will be able to tell if the price oiffered is really a deal. If not, they will help you get it.
The friendly folks in the sales office work for the sellers. NOT YOU. I beleive forly that they are not out to get you, but in the end they do not represent your interests, a buyers agent is.
The friendly folks in the sales office work for the sellers. NOT YOU. I beleive forly that they are not out to get you, but in the end they do not represent your interests, a buyers agent is.
- Nathan Wolf, "natewolf"
- Contributions:1825
One lender responded to this post, that 70-percent of the loans he does on new construction are "dollar" evident in the incentives that are afforded to buyers who "go it alone."
I'm not surprised at his response. Many buyers who are represented by a Buyer's Agent are recommended by their agent to shop around. Just because a builder wants to give you "incentives" does not mean the loan you are getting is the best loan for you. If a lender is a "builder lender" you might want to shop around.
This is why so many buyers were talked into bad loans. NOT because their Buyer Agent talked them into it... just the opposite: Because 70-percent of those new construction buyers were NOT represented by a Buyer's Agent, and the Builder and the Lenders were conspiring to put people in homes they couldn't afford, and in loans that were to the benefit of the Builder/Lender and not in the best interest of the client. You can Google search "Beazer" and read case studies of Major National Builders who have caused these problems for buyers.
Having a Buyer Agent can help you avoid these situations, especially if you're a first time homebuyer with lots of questions.
I'm not surprised at his response. Many buyers who are represented by a Buyer's Agent are recommended by their agent to shop around. Just because a builder wants to give you "incentives" does not mean the loan you are getting is the best loan for you. If a lender is a "builder lender" you might want to shop around.
This is why so many buyers were talked into bad loans. NOT because their Buyer Agent talked them into it... just the opposite: Because 70-percent of those new construction buyers were NOT represented by a Buyer's Agent, and the Builder and the Lenders were conspiring to put people in homes they couldn't afford, and in loans that were to the benefit of the Builder/Lender and not in the best interest of the client. You can Google search "Beazer" and read case studies of Major National Builders who have caused these problems for buyers.
Having a Buyer Agent can help you avoid these situations, especially if you're a first time homebuyer with lots of questions.
- Lori Bee, "LoriBee"
- Contributions:19
I totally agree that you really need to have an agent represent you, the buyer. I have been a new home sales specialist for years (CSP designation by the Nat. Assoc. of Homebuilders) and I am a REALTOR(R).
However, I will disagree with Nate on one important point. MOST new home sales agents in Charlotte are NOT LICENSED. They are employees of the builder, and do NOT have to disclose they represent the builder only. Otherwise, they'd also have to disclose that when you don't come in with an agent, they get "both" sides of the money. So who do you think the better deal is for then? Certainly NOT the consumer!
I will probably take heat for this, but I feel that all builder's salespeople should be licensed. Until then, they will not disclose who they represent, and the disadvantages of that to the consumer.
CAVEAT EMPTOR ! Buyer Beware! And get a Buyer's agent! :-)
However, I will disagree with Nate on one important point. MOST new home sales agents in Charlotte are NOT LICENSED. They are employees of the builder, and do NOT have to disclose they represent the builder only. Otherwise, they'd also have to disclose that when you don't come in with an agent, they get "both" sides of the money. So who do you think the better deal is for then? Certainly NOT the consumer!
I will probably take heat for this, but I feel that all builder's salespeople should be licensed. Until then, they will not disclose who they represent, and the disadvantages of that to the consumer.
CAVEAT EMPTOR ! Buyer Beware! And get a Buyer's agent! :-)
- Lori Bee, "LoriBee"
- Contributions:19
Oh and Nate... what some builders have done is hired licensees (NOT necessarily REALTORS who adhere to the code of ethics!), to be the BIC's of their sales offices, just to gain MLS access. That does not mean the sales staff are licensed.
The more reputable builders may be, but I have not seen that trend myself.
The more reputable builders may be, but I have not seen that trend myself.
- Michel Thonissen, "Michel Thonissen"
- Contributions:28
The disadvantage is that the sales person works for the builder and has the builders best interest in mind not yours. Because the builder is dependend on Realtors to bring them buyers they need to maintain good relationships with those Realtors. This gives the Realtors more cloud in case something needs to be fixed. Do you think I would bring another buyer to a builder that is not sensitive to my client's concerns? Also we do know who the good and bad bilders are and can prevent a lot of grief. So getting your own Realtor involved is important and so is getting a professional home inspection.
- Nathan Wolf, "natewolf"
- Contributions:1825
Sounds like Chip doesn't like getting referrals from Realtors, if he thinks it's advantageous to buy without one. The fact is that most reputable Builders now have their own agents become Realtors. Even the BUILDER wants good representation by a Realtor.
So, buyer beware, NOT using a Realtor can be a hazzard.
In the past few months, I have had to -- successfully -- negotiate with builders to break their contracts and refund monies, while their contracts clearly state that they will not do so. And have -- successfully-- negotiated for items not in their contracts to be included in the contracts, to favor my buyers... BEWARE OF BUILDER CONTRACTS.
Why can we do this for our clients? Because we have clout. We do talk about builders to our colleagues and no Builder wants a whole bunch of Realtors pissed off at them because they are taking advantage of our clients. They WANT our business and our clients. The trend is actually to WANT Realtors involved-- it reduces the Builder's liability to have an agent represent the Buyers. One VERY large builder in Charlotte claims that over 80-percent of their Buyers use a Realtor.
Which stands to reason, because over 95% of Real Estate Home transactions in Charlotte involve a Realtor. It makes sense.
So, buyer beware, NOT using a Realtor can be a hazzard.
In the past few months, I have had to -- successfully -- negotiate with builders to break their contracts and refund monies, while their contracts clearly state that they will not do so. And have -- successfully-- negotiated for items not in their contracts to be included in the contracts, to favor my buyers... BEWARE OF BUILDER CONTRACTS.
Why can we do this for our clients? Because we have clout. We do talk about builders to our colleagues and no Builder wants a whole bunch of Realtors pissed off at them because they are taking advantage of our clients. They WANT our business and our clients. The trend is actually to WANT Realtors involved-- it reduces the Builder's liability to have an agent represent the Buyers. One VERY large builder in Charlotte claims that over 80-percent of their Buyers use a Realtor.
Which stands to reason, because over 95% of Real Estate Home transactions in Charlotte involve a Realtor. It makes sense.
- Sergio Hernandez, "Sergio Hernandez"
- Contributions:619
The simple answer is no!
The developer/builder wants you to buy his product and get you to pay top dollar.
If you want to pay top dollar without the benefit of comparing what a similar resale property will cost you, deal directly with the developer/builder, without the use of a Realtor.
If you want to see how much money you're likely to save buying a similar resale to the new construction product, work with a Realtor.
The developer/builder wants you to buy his product and get you to pay top dollar.
If you want to pay top dollar without the benefit of comparing what a similar resale property will cost you, deal directly with the developer/builder, without the use of a Realtor.
If you want to see how much money you're likely to save buying a similar resale to the new construction product, work with a Realtor.
- Clarence Williams, "Clarence_Williams"
- Contributions:10
I will only speak from the experience of working for the builder and also
the consumer.(NOT AT THE SAME TIME) They both need help! The idea is to be fair and bring the standards to the table. I will not allow my buyer's to miss out on anything that saves them money and protects their interest. I will not allow the builders to give away everything just because someone ask for it. The standards we create to govern these new contruction transactions will help keep this realestate market active. (Keeping a pulse!)
the consumer.(NOT AT THE SAME TIME) They both need help! The idea is to be fair and bring the standards to the table. I will not allow my buyer's to miss out on anything that saves them money and protects their interest. I will not allow the builders to give away everything just because someone ask for it. The standards we create to govern these new contruction transactions will help keep this realestate market active. (Keeping a pulse!)
- Miriam Peters, "petersteam"
- Contributions:310
Disadvantages, I see none. Builders are not allowed to offer a reduction of price or an extra incentive by not using an agent. However I have seen this done.
Advantages, countless. We can run a CMA to base a reasonable offer (never pay list), help with selections, walk through, inspections, lenders, closing, the list is endless.
A good real estate agent can make the buying process a dream come true vs a job.
Advantages, countless. We can run a CMA to base a reasonable offer (never pay list), help with selections, walk through, inspections, lenders, closing, the list is endless.
A good real estate agent can make the buying process a dream come true vs a job.
- workabee
- Contributions:1030
Digging up crap from 2008. I'm impressed. Just how slow is your market in Charlotte?
- Sharon Lewis, "Sharon Lewis"
- Contributions:3916
I have so many potential sellers who when they moved here, dealt directly with the friendly sales person on location who seemed to be on their side. Now those sellers cannot compete with the sales in their own community because they paid too much and they don't have the upgrades...yes, use a realtor who protects only your interests.
Do you really need a Realtor when you buy New construction?
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- 0.0/5.0
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Contributions:104There is lots of new construction in Charlotte. Most buyers walk in and decide to buy without consulting a Realtor of their own. I'm curious if you would buy new construction without using your own Realtor and why? What are the advantages and possible disadvantages?
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