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I suspect bringing a realtor to a new home purchase will likely increase the price I have to pay to cover their commission. It would be nice to have advice but if it costs me thousands then I might try to wing it myself?
I suspect bringing a realtor to a new home purchase will likely increase the price I have to pay to cover their commission. It would be nice to have advice but if it costs me thousands then I might try to wing it myself?
Thoughts?
Are you talking about a NEW home (builder) or existing?? The answer is "it depends". More details please..
Builder homes, it seems to me any additions to the "bottom line" will be paid by the purchaser. Given all the builders' assessments for new schools, roads, environmental mitigation, etc. that are passed on to the buyers I probably should engage an attorney?
Another thought is whether there is bargaining room on the often ridiculously over priced "options" like $20K to be on a pond and charges for "designer paint colors" for any color than off white?
Builder homes, it seems to me any additions to the "bottom line" will be paid by the purchaser. Given all the builders' assessments for new schools, roads, environmental mitigation, etc. that are passed on to the buyers I probably should engage an attorney?
Another thought is whether there is bargaining room on the often ridiculously over priced "options" like $20K to be on a pond and charges for "designer paint colors" for any color than off white?
It's a tough market!
Generally speaking, if you are dealing with a builder, he or she may hire an agent. Some builders will deal with you "direct" (and bypass their hired agent) which normally gets 3%. Some may not want to deal with the consumer direct (bigger builders) and they have that fee included. Now if you bring in an agent, those $4's have to come from somewhere.
My advise is make darn sure you know the builder you are working with has a financial backing. I'd be nervous about plunking down a big down payment in 2010 to anyone. So there is some comfort in working with a National builder for this reason. I see the value of an attorney specifically to understand the contract you are signing and making sure you have the least skin in the game as you can. Other than that, you need to understand the market by lots and lots of questions.
Also, change orders are where builders make their money. Have every single building detail down before signing a contract. If you move a wall later when you start, it may cost you bigtime after you sign on the dotted line. If you decide on a better window or better roof, it might cost them $400 but charge you $5K. If you did your homework ahead of time, then they cannot get at your wallet once they start.
I would be doing a lot of talking to builders and learn learn learn about the market. Subcontractors are hungry. So if they charge for "designer paint" get an idea of the cost of the paint supply difference and offer them that price. If they balk, tell them to hire a contractor that understands that it costs the same in labor to paint different colors (other than cleaning some rollers out). So give them an extra few hundred for that headache.
Re: a pond. $20K might be reasonable to others so that might be the market for a view. If you have all of the "tweaks" down on paper you can have a better idea when comparing projects. Tap a freind's expertise to see if the numbers make sense. I'd also be concerned on a quote that is too low. There can be big variations on the price and quality of windows, quality of cabinets etc.
Good luck!
I suspect bringing a realtor to a new home purchase will likely increase the price I have to pay to cover their commission. It would be nice to have advice but if it costs me thousands then I might try to wing it myself?
Thoughts?
The buyer doesn't pay a buyer's agent. It comes out of the seller's profit. Considering that this is a buyer's market, the chances of a builder jacking up the price to cover that commission (which is not set, by the way) are slim.
It is always a good idea to have a trained professional represent you and the fact that it is free is an added bonus.
The buyer doesn't pay a buyer's agent. It comes out of the seller's profit. Considering that this is a buyer's market, the chances of a builder jacking up the price to cover that commission (which is not set, by the way) are slim.
It is always a good idea to have a trained professional represent you and the fact that it is free is an added bonus.
If I am a small builder (seller) and someone wants there best deal, it can only happen if they don't have an agent. It doesn't matter who pays for it because the money comes from somewhere. If the buyer got scr_ewed because they were not savvy in building and the builder attempted to take advantage of them, then it would pay to have an expert along. But who says the person that gets paid 3.5% ($3K-$10K) has your best interest in mind?? I'm not saying that the agent won't have the best interest in mind but at the end of the day, they may NEED that $3K-$10K to make ends meet.
If it was me, I'd learn the market myself, research the builder and hire an real estate attorney to look over the contract. That's not for everyone but the OP wanted to save $$'s. You don't save money by hiring a person at 3.5% that may not be much more savvy that an average buyer.
If I am a small builder (seller) and someone wants there best deal, it can only happen if they don't have an agent. It doesn't matter who pays for it because the money comes from somewhere. If the buyer got scr_ewed because they were not savvy in building and the builder attempted to take advantage of them, then it would pay to have an expert along. But who says the person that gets paid 3.5% ($3K-$10K) has your best interest in mind?? I'm not saying that the agent won't have the best interest in mind but at the end of the day, they may NEED that $3K-$10K to make ends meet.
If it was me, I'd learn the market myself, research the builder and hire an real estate attorney to look over the contract. That's not for everyone but the OP wanted to save $$'s. You don't save money by hiring a person at 3.5% that may not be much more savvy that an average buyer.
Not to belabor this, but I want people to understand.
If you hire an attorney to look over your contract the buyer is paying money.
If they have a buyer's agent it is free. They are not paying money.
The chances that the developer is jacking up the price because the buyer has an agent and will have to pay a commission are not good. It's a buyer's market. He will pay that money, and gladly, just to have a buyer.
It is never advisable to walk into a situation like that without representation. You are dealing with a developer and possibly his/her agent. They have their best interests at heart. Not yours.
Folks should do themselves a favor and bring a buyer's agent. It is free and they now have someone that is looking out for them.
Of course they have your best interest in mind. It is how they build their reputation. And if they save you $10,000, it is a difference of about $100 in their pocket. Believe me, it is better to save the client $10,000, walk away with $100 to $200 less, and create a lifelong client that will tell others. It's how it works.
I have a friend that bought a new home without an agent. I still hear about that and it has been years. They took him, the developer and his agent, and they took him good. He will never buy a new home without an agent again.
Not to belabor this, but I want people to understand.
If you hire an attorney to look over your contract the buyer is paying money.
If they have a buyer's agent it is free. They are not paying money.
The chances that the developer is jacking up the price because the buyer has an agent and will have to pay a commission are not good. It's a buyer's market. He will pay that money, and gladly, just to have a buyer.
It is never advisable to walk into a situation like that without representation. You are dealing with a developer and possibly his/her agent. They have their best interests at heart. Not yours.
Folks should do themselves a favor and bring a buyer's agent. It is free and they now have someone that is looking out for them.
Of course they have your best interest in mind. It is how they build their reputation. And if they save you $10,000, it is a difference of about $100 in their pocket. Believe me, it is better to save the client $10,000, walk away with $100 to $200 less, and create a lifelong client that will tell others. It's how it works.
I have a friend that bought a new home without an agent. I still hear about that and it has been years. They took him, the developer and his agent, and they took him good. He will never buy a new home without an agent again.
By definition, it's not free if someone gets paid. Plus, a RE Agent isn't a RE Attorney. In 2010 ESPECIALLY in FL where builders are limping you NEED to protect yourself on paper with a Shark (a.k.a. a paranoid RE Attorney). So if someone asks an agent to come with them to take a look at a property that I want to buy and they give advice they expect to get paid (and rightly so). But why not drag along a friend who is savvy for free and hash through the numbers. If it looks good, pay an attorney and move forward. If you are not trying to get your “best” deal who cares or if you are out of state attempting to look for a property it would be beneficial to hire a local RE agent to check on the progress etc.
I understand it is a buyer’s market. But if you are negotiating to get a better price and there is a realtor in the middle, he or she may prevent a better deal. If I am a builder I can promise you that if a buyer’s agent comes along, that person would not be getting as good of a deal when they ask for one (and assuming I could afford to give a better deal and the price wasn’t as low as I could go). With me as a builder, they would be costing themselves that "free" amount you are talking about. I’m not a builder but I know a thing or two about building. I’d personally never bring along a RE agent for “free”.
I completely get the fact that if you don't understand the market it can cost you a lot more than 3.5%. But that is not the same thing as attempting to say that a buyer’s agent is "free". I'm sorry but that's complete non-sense.
If it was me, I'd be visiting a lot of properties looking at homes to get a complete sense of what things are going for. I'd be picking a solid builder (not necessarily a desperate one that is going to "save" me $$’). Ethics and financial stability correlate pretty strongly.
Getting to the point of “best interest in mind”. When a lot of money is involved and a person gets paid on a sale going though, compromises happen to various degrees all the time. It’s just the matter of degree. And if you are human and honest with yourself, you should understand what I mean. I’m own a company and I sell. While I do my best to be ethical and honest, I am not going to lie to you and say I am not human.
I've tried my best to stay out of this discussion, but I can't resist.
Every situation is different. Some builders pay a set amount to a buyer's agent. Others might not want a prospective homeowner to be represented by his own agent. I recently drove to a community and went into the office and asked about this very subject. I was told by the builder's agent that it didn't matter. However, when I asked about discounts for buying directly from the builder, he said it never hurts to ask about getting a few upgrades.
I wish I didn't need to use a real estate agent to look at a house, but I understand why there can't be 100 people walking through a property unescorted. However, I can honestly say from experience that some agents I've met don't know the answers to basic questions. I've also found numerous errors in listings. It's no different from any other profession. There are really great people who have a thorough knowledge of the real estate market in their communities and there are people who don't know what the heck they're doing and make up stuff as they go.
I've tried my best to stay out of this discussion, but I can't resist.
Every situation is different. Some builders pay a set amount to a buyer's agent. Others might not want a prospective homeowner to be represented by his own agent. I recently drove to a community and went into the office and asked about this very subject. I was told by the builder's agent that it didn't matter. However, when I asked about discounts for buying directly from the builder, he said it never hurts to ask about getting a few upgrades.
I wish I didn't need to use a real estate agent to look at a house, but I understand why there can't be 100 people walking through a property unescorted. However, I can honestly say from experience that some agents I've met don't know the answers to basic questions. I've also found numerous errors in listings. It's no different from any other profession. There are really great people who have a thorough knowledge of the real estate market in their communities and there are people who don't know what the heck they're doing and make up stuff as they go.
Caveat emptor.
Well said. Addationally some builders don't want to be the conduit between the client and them as the RE Agent can buffer conversations to make the builder more productive.
I've sold three properties myself. It's a pain in the butt even in a hot market; so now I just hire someone. I've also bought properties with and without RE agents. When things were red hot, I picked the biggest "player" RE Agent in the area to work with (I was one of those evil flippers but more often than not a rehabber). If you didn't have an RE Agent (and pick the best) you didn't hear about properties before they hit the MLS. I'd get calls up in Northern MN from an Agent who did the biggest numbers and she knew exactly what I was looking for. I got 1st look at the property and more often than not I bought because she knew what I was looking for and why. For the record, was the the sellers best interest in mind (by not listing it on MLS). I think not.
When I am looking to contract out a home to build, I personally don't want or need their services unless I was out of state. Service and expertise costs money. Hence, to save the most (not in every situation but most) you go direct and bypass "free" advice.
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I'm not saying that the agent won't have the best interest in mind but at the end of the day, they may NEED that $3K-$10K to make ends meet. 
