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Answers (25)
- Linette Carroll, "Linette Carroll"
- Contributions:17
I get the impression that some writers think that they are getting taken advantage of by realtors. Most of us are here to do a good job. To look out for our buyers interests and yes at the very end, if everything goes well (which isn't a given these days) we get a commission check. We bring that check to our broker who gives us a percentage. Then we put aside 1/3 for taxes and the rest goes to bills that have to be paid.
An agent who does not treat their client correctly does not stay an agent long. If you have had a bad experience, please don't lump all of us together. Thanks.
To answer the question, representation in any thing that you are not totally versed on is absolutely necessary. And it really doesn't cost you anything. If anything it may save you a bunch of money.
I feel better now!
An agent who does not treat their client correctly does not stay an agent long. If you have had a bad experience, please don't lump all of us together. Thanks.
To answer the question, representation in any thing that you are not totally versed on is absolutely necessary. And it really doesn't cost you anything. If anything it may save you a bunch of money.
I feel better now!
- Georgia New Homes
- Contributions:68
If you already narrowed down the home you want to purchase and the builder accepts broker cooperation, can you cut a deal with agent so you get half of the commission the agent gets from the builder?
Yes, you can if your state law allows it. But, in reality, the commission, along with all seller-paid closing costs and incentives, are being paid by the buyer through the sales price.
Yes, you can if your state law allows it. But, in reality, the commission, along with all seller-paid closing costs and incentives, are being paid by the buyer through the sales price.
- David Shedd, "dshedd"
- Contributions:17
My 2 cents on the "chumminess" issue is simply that any buyer should do their homework BEFORE hiring a buyer's agent. If you feel confident with the agent, if you've asked them for references from buyers they've worked with both in new construction and resales, if they make sense in talking to you about how they represent you and not the builder...then sign. If you don't feel that kind of confidence after doing your due diligence, then don't. I wouldn't expect my attorney to dislike people that I'm in an action against, I'd simply expect him/her to know who the principal is and act accordingly. Talk to friends who have had houses built, see if they feel that they were well served by their agent...those may be some of your best referrals.
- Deby Ross, "Deby Ross"
- Contributions:81
I understand the question K101, and perhaps worded my answer incorrectly. I still think it is a question of perceived value.
- sunnyview
- Contributions:25139
Wow that's a great tip. I think that end of the year buying idea is threadworthy on it's own. It makes sense though. Almost like getting a deal on last years clothes or the end of the year for some stores.
I like that word "chumminess". I think it cuts both ways. You would like an Agent who is close enough to the builder, as Joshua pointed out, that they might get the first call on new deals, but you don't want close enough to the Builder that it interferes with their ability to negotiate the hardest for you....
How would you know if your Agent was too close or just close enough? That's the million dollar questions.
It really depends on how comforatable you (the Buyer) are in your own personal assessment of the development and to know how what the value of the product is... if you are comfortable then possibly the
"chummy" buyers agent could be for you, because you will not let them cut you short...
I don't know how close the Agent is to the Developer has its pros and cons, it really depends on the Agent (if they are going to negoatiate hard for you) and on you (the Buyer) how much do you know, just in case the Agent is blowing smoke up your A$$.
Also little hint on developments. If the company is publicly traded (maybe even large private company) even to some degree smaller companies... Find out when the end of their fiscal year is. The closer it is to the end of the fiscal year and if you have the ability to close before that end of the fiscal year.... That is where you get the highest reductions.
I've seen over 45% reduction on price for quick closing for National Development company.
- Deby Ross, "Deby Ross"
- Contributions:81
A realtor can provide great value in new construction transactions. There are some upgrades that enhance the value of a property and some that do not. An experienced agent can help you with those. Lots and lot premiums are also something that should be carefully considered. I have dealt with many individuals with re-sale needs who have purchased substandard lots from the builder and have trouble re-selling their properties. Also, the builder tie-ins that now exist with mortgage and title are being re-examined and the laws may be changing. An agent can help you find an affordable and advantageous way of financing your home that works in the interest of the buyer and not the builder (remember Beezer homes)? I have seen developments where the builder will undercut re-sale to get houses sold. It is not legal in my state to cut deals with the builder to take away commission from an agent. Procuring cause laws are something to consider before you undercut anyone. Also, the idea of respect and consideration in business is important. You wouldn't want someone to go to your boss and undercut you for your paycheck. Working with an agent can help you navigate through the homebuying process and look out for your best interests in the long run.
- Richard Rosa, "RichRosa"
- Contributions:16
The mistake many unrepresented home buyers make with new construction is not having all, and I mean all, the specifications on the property before making an offer and beginning negotiations.
Builders love it when buyers are not represented.
Find an exclusive buyer agent who has experience helping home buyers purchase new construction. You'll be glad you did.
[content removed by moderator for being self promotional]
Builders love it when buyers are not represented.
Find an exclusive buyer agent who has experience helping home buyers purchase new construction. You'll be glad you did.
[content removed by moderator for being self promotional]
New construction comps are good for 3 months only.
Joshua,
Let everyone know you dont get $1000.
Half goes to the broker and 35% goes to Uncle Sam and you also have insurance and other cost of doing business fees!
So you get more like 300.00 when everyone is else paid!
They are is an awful misconception that it is easy money, it's so not.
Let everyone know you dont get $1000.
Half goes to the broker and 35% goes to Uncle Sam and you also have insurance and other cost of doing business fees!
So you get more like 300.00 when everyone is else paid!
They are is an awful misconception that it is easy money, it's so not.
If a builder in Phila. Market was ever caught paying a buyer from thier commission fund, they would be "BLACK LISTED" by every self respecting agent and brokage!
This is why I left the business as a REALTOR. You are not a view as a professional, your just a guy that shows homes and has all the paperwork. The real estate business model is ourtdated and flawed. This is only indsurty that makes you work for FREE and pay for EVERYTHING UPFRONT to sell a home or shlep buyers around town. They should be a intial retainer and contract then pay by service. If you want little to now help pay me less. You want full service pay me more!
I cant stand people like this!
Does you boss ever asked you to take half pay at your job?
I cant stand people like this!
Does you boss ever asked you to take half pay at your job?
- Joshua Hanoud, "HernandoLuxuryHomes"
- Contributions:330
(continuation) Absolutely. Call me any time and say "Josh - I want to give you $2,000 but I want $1,000 of it back from you" If that's all you want me for, that's fine with me - but what if that builder is having quality control issues? Well, their sales rep surely isn't going to speak up and let you know...and at that point, you didn't hire me for my expertise, you hired me to filter some extra cash your way (that's called a "no brokerage relationship" here in Florida and I would have no responsibilities to you whatsoever aside from sticking my name on the paperwork - by all means verify it with your lawyer because I'm not an attorney).
My value as a buyers agent (this is how I earn my full commission) with regards to new construction is that I know every builder in my area - from the local custom builders to the sales reps and regional managers at the national companies. In fact, I've got builders keys for most of their inventory (so I can get you in after-hours or early morning if it's more convenient for you). I can also tell you the pros and cons of each builder and let you know who might be the best fit for your particular situation (price, amenities, quality, personality).
My full commission gets you my full attention, knowledge, and expertise regardless of what the builder is offering (be it 1% or 7%). But like I said - we can negotiate and I'll absolutely take a quick $1,000 so long as your expectations are commensurate.
- Joshua Hanoud, "HernandoLuxuryHomes"
- Contributions:330
I have to chime in regarding K101's comment that you don't want a realtor who is chummy with the builder...I disagree wholeheartedly on that one.
If you're looking for a great deal on new construction, my "chumminess" with the builders reps means I get the first phone call when there's a new deal or incentive and my buyers get first crack at it. A big part of my job is networking with both professionals and customers/clients in all aspects of my industry from builders reps, to mold remediation companies - part of my job is to "know the right guy for that".
So, sure - go with the realtor who's not on good terms with the builder's rep...I'll have gotten that "steal of a deal" to one of my customers 2 weeks before your agent even knew about it.
And in response to the OP - if you already knew the builder and floorplan and location and had the deal all worked out - there's no need for a buyer's agent, but I think you knew that...all you wanted to know was could we work it out so that the builder pays me and I give you a cut...(post continued)
If you're looking for a great deal on new construction, my "chumminess" with the builders reps means I get the first phone call when there's a new deal or incentive and my buyers get first crack at it. A big part of my job is networking with both professionals and customers/clients in all aspects of my industry from builders reps, to mold remediation companies - part of my job is to "know the right guy for that".
So, sure - go with the realtor who's not on good terms with the builder's rep...I'll have gotten that "steal of a deal" to one of my customers 2 weeks before your agent even knew about it.
And in response to the OP - if you already knew the builder and floorplan and location and had the deal all worked out - there's no need for a buyer's agent, but I think you knew that...all you wanted to know was could we work it out so that the builder pays me and I give you a cut...(post continued)
You should be able to find a realtor willing to give a substantial amount of the commission back in such a situation. However, keep in mind that most builders, at least here in AZ, have a stipulation that the agent must accompany you on the first visit to the site, and have sign in sheet and records for that purpose.
Here in AZ, despite all the price drops, buying from a new home builder could possibly be the worst decision you could make; The new homes are all out on the fringes of the valley, where prices are being killed the hardest by foreclosures. And magically, the new home's appraisal always comes in at value, a value that in no way in heck the home could be sold for, so you start out way underwater. Its quite a bit worse than buying a new car, but I'm cheap, I always buy one year old cars and save tons of money!
Here in AZ, despite all the price drops, buying from a new home builder could possibly be the worst decision you could make; The new homes are all out on the fringes of the valley, where prices are being killed the hardest by foreclosures. And magically, the new home's appraisal always comes in at value, a value that in no way in heck the home could be sold for, so you start out way underwater. Its quite a bit worse than buying a new car, but I'm cheap, I always buy one year old cars and save tons of money!
- Karen Parsons Fiddler, "Karen Fiddler"
- Contributions:189
Hi,
In real estate, everything is negotiable. So, you can ask your agent to share the commission with you. However, even though it's new construction, you still have a normal escrow and with a builder, you would be dealing with the all the "seller's people." This is especially true if you use their lenders as well. This is a huge purchase and you should have someone looking out for you.
Real estate commissions might seem like a big chunk of money, but we do work 100% on commission. And then we pay for our own expenses and taxes. It's not the freebee it might seem like from the outside. A great real estate agent works hard for the business and also for their client....they are worth paying for...which as a buyer, you don't pay for.
[content removed by moderator for being self promotional]
In real estate, everything is negotiable. So, you can ask your agent to share the commission with you. However, even though it's new construction, you still have a normal escrow and with a builder, you would be dealing with the all the "seller's people." This is especially true if you use their lenders as well. This is a huge purchase and you should have someone looking out for you.
Real estate commissions might seem like a big chunk of money, but we do work 100% on commission. And then we pay for our own expenses and taxes. It's not the freebee it might seem like from the outside. A great real estate agent works hard for the business and also for their client....they are worth paying for...which as a buyer, you don't pay for.
[content removed by moderator for being self promotional]
- Maureen Thelen, "Maureen Thelen"
- Contributions:158
The advantage to the Buyer who uses an agent to buy a home (either a new build or a resale home) is that the Buyer has someone representing them that is looking out for their interests in the transaction. Some Buyers who have experience buying real estate, have the time and willingness to deal with all documents, are good negotiators, and also know the current local market that he or she plans to buy in, might be able to represent themselves. Those with less experience may do better with a Realtor.
- Dawn Rupersburg, "dawnrupe"
- Contributions:22
You can if the agent will allow it. I know I work for my commission and my education is valuable to a client. The value in a good agent is their education on the communities, finance,property taxes, and contracts. The builders out to paint a rosy picture for you and the agent is going to tell you the pros, and con's so you make the right decison. I have one sales office that tells clients they have no closing costs and they believe it. Property Taxes is always a different answer, and the list goes on.
Once you decide on a community your Realtor will know when a good deal comes up from the builder and you will be the first to know instead of the last if you have a relationship. Deals don't go to buyers who don't have a strong relationship with a Realtor. Deals go to buyers who Realtors know are going to buy from them. Off the subject a little.
It's the qualify of our education to the buyer that earns our commission.
Your Realtor may know a very important fact about that community that if you knew you would change your mind and that can be worth 1000.s of dollars to you. Like a prison is going to be built next door or a new garbage dump is going in. You would not believe how many investors built houses next to the garbage dump in our area becasue they know it all and a Realtor doesn't deserve a commission. Some of them still don't even know the dumps in their back yard of property they bought.
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- Angelo Davis
- Contributions:2
I would recommend using a realtor, but ensure that they have experience working with builders. I have worked as the agent representing the builder and was always surprised at how many people don't use a realtor. Presently, most builders are offering some great incentives but people do not realize that they can negotiate for even more. Your agent must know your goals and financial situation to ensure that they are representing YOUR best interest. Knowing you, they can find you the best situation and get the deal structured to work best for you.
Your relationship with your realtor must always have trust, respect and great communication. If you are misssing any of those ingredients, I recommend finding a realtor with whom you will have that relationship.
Your relationship with your realtor must always have trust, respect and great communication. If you are misssing any of those ingredients, I recommend finding a realtor with whom you will have that relationship.
- Andrew Himes, "Andrew Himes Group"
- Contributions:233
The bigger question is why wouldnt you want representation? The builder or the represenative for the builder is exactly that. They are not looking out for your best interest, they are looking out for theirs. That interest is getting the best possible price for them not you. They will not give answers to questions that you wouldnt think/know to ask.
On the commission note, do you go to the Doctor and say "Hey Doc I know i have the flu but can you just give me some antibiotics and then charge me half since i already knew what was wrong with me"? It doesn't happen with them so why should we not be held to that same standard?
On the commission note, do you go to the Doctor and say "Hey Doc I know i have the flu but can you just give me some antibiotics and then charge me half since i already knew what was wrong with me"? It doesn't happen with them so why should we not be held to that same standard?
it is a known fact that when a buyer uses an agent that is knowledgable in their market area, a better price is obtained.
I'm not sure its a known fact. I would doubt that there is any credible data which compares the price negotiated by unrepresented Buyer's and represented buyers and correlating those transactions that have had the Buyer's side commission negotiated out and those that have not (maybe NAR has run studies, but they are somewhat biased to the argument).
I'm not sure its a known fact. I would doubt that there is any credible data which compares the price negotiated by unrepresented Buyer's and represented buyers and correlating those transactions that have had the Buyer's side commission negotiated out and those that have not (maybe NAR has run studies, but they are somewhat biased to the argument).
- Trina Wyatt, "Trina Wyatt"
- Contributions:30
It is a known fact that when a buyer uses an agent that is knowledgable in their market area, a better price is obtained. Agents due their due dillegence in working for the buyer such as obtaining taxes, covenants, potential sids/rids in the area, future improvements in the vicinity that can greatly affect ones purchase, professional lenders, recomend a home owners title policy which proctects from any missed liens, encroachments, easements, etc, and can pull comparables to make sure the buyer is getting their monies worth. The disadvantage is of course getting a realtor that does not know their market area and poor communication skills. In this market more builders have turned to agents Sorry about the any mis-spelled words.
I didn't see the last sentence. I guess the answer is "yes".
Who negotiates to give back 1/2 their commission? I know people do, but how do they expect to make a living ;0
Who negotiates to give back 1/2 their commission? I know people do, but how do they expect to make a living ;0
It really depends on your capabilities. If you are a shrewd negotiator, know your market and know what you can ask for (stay emotionally detached) then I'm sure you could do it without representation.
I do not know you personally so whether or not you will get a better deal really is going to depend on you.
I will say this, most people think they are better negotiators then they really are, so... its hard to say.
If this is your first house, I'm sure even some Doomer's will tell you that you might want to have some sort of representation. Although if you are a good negotiator you might only want an RE attorney to give you legal advice on the contract.
I do not know you personally so whether or not you will get a better deal really is going to depend on you.
I will say this, most people think they are better negotiators then they really are, so... its hard to say.
If this is your first house, I'm sure even some Doomer's will tell you that you might want to have some sort of representation. Although if you are a good negotiator you might only want an RE attorney to give you legal advice on the contract.
What is the advantage/disadvantage of retaining an agent when buying new homes?
Most folks negotiate directly with a builder. What value can an agent provide?
An agent generally get 3% fee from seller/builder. If you already narrowed down the home you want to purchase and the builder accepts broker cooperation, can you cut a deal with agent so you get half of the commission the agent gets from the builder?
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