Do you need a Reltor for new construction? (buyer's agent, commission, contracts) - City-Data Forum

jimwdata · 05-04-2010, 10:05 AM

How can a Realtor help if constructing a new home through a National builder with a "fixed" advertised price?

I am thinking couple of the following might apply:
- Realtor can negotiate a lower price?
- Realtor can help negotiate "free" upgrades
- Realtor can help with paperwork, financing, inspection etc.

What else?

-Jim

MMichelle · 05-04-2010, 10:38 AM

Frankly, you will pay the same amount with or without a buyer's agent - so, you might as well have one. Yes, a good buyer's agent can do a good job for you - as you listed in in org. post - there are several area where your buyer's agent can be worth their weight.

Here in Colorado, the most compelling reason to use a buyer's agent with new construction is that the builders are not required to use contracts approved by the Colorado Real Estate Commission. In other words - they can put anything into the contract - aka buyers beware! It's no surprise that their contracts are slanted to their advantage. A good buyer's agent can spot "non-standard" clauses. Based on my exp., I have found builders will go an extra mile to remain on good terms with the local realtors - and the buyer's advantage is increased as a result. The best part, the buyer doesn't have to pay the realtor - the builder pays! Happy days!!

FalconheadWest · 05-04-2010, 10:40 AM

We help point out which lots have the best resale value. People think a corner would have a better resale than an interior lot, but it all depends with each subdivision.

We help coordinate all dates and appts as the sales rep has 20+ other home buyers he's trying to keep straight in his head as well.

We help the sales guy realize that he works for the builder and not in the best interest of the buyer, so the sales guy is NOT your best friend.

There are so many things we do, a comprehensive list would be hard to type out as it's a lot of little things buyers don't even think about. Right now, I'm helping some clients get some warranty work done that the builder is denying as part of their warranty.

TheyCallMeDerek · 05-04-2010, 10:45 AM

Quote:

Originally Posted by MMichelle

Frankly, you will pay the same amount with or without a buyer's agent - so, you might as well have one. Yes, a good buyer's agent can do a good job for you - as you listed in in org. post - there are several area where your buyer's agent can be worth their weight.

Here in Colorado, the most compelling reason to use a buyer's agent with new construction is that the builders are not required to use contracts approved by the Colorado Real Estate Commission. In other words - they can put anything into the contract - aka buyers beware! It's no surprise that their contracts are slanted to their advantage. A good buyer's agent can spot "non-standard" clauses. Based on my exp., I have found builders will go an extra mile to remain on good terms with the local realtors - and the buyer's advantage is increased as a result. The best part, the buyer doesn't have to pay the realtor - the builder pays! Happy days!!

MMichelle is right on on this one!

It's worth noting that the sales rep represents the Builder and not you. It's free to have a Realtor represent you. Builders come to brokerages all the time (Here in Austin Texas at least) asking for our business. When it comes down to it, they'd perfer that you use a Realtor because some buyers shoot from the hip at times, asking for the impossible then the deal falls apart. On top of that having an expert negotiator couldn't hurt!

MikeJaquish · 05-04-2010, 06:50 PM

Quote:

Originally Posted by Naptowner

I disagree you should pay a realtor (because you will pay, one way or the other). Some of the things the realtors here are saying they can do constitute the practice of law, and they're not lawyers, so they can't advise you on what's in the contract or whether you should sign it, and they're not qualified to interpret your warranty, although they do these kind of things all the time. The idea that you don't pay the realtor because the builder has to pay is fiction - that commission has to come from somewhere, whether it's on the back end or the front.

Realtors can be valuable in helping you gauge the market, and of course they can help make the transaction go more smoothly, but even at 3% of the purchase price, are those services worth the $6,000 or so you'll pay in connection with a new home purchase? If it were truly "free" to use a realtor, then why not, but anyone with more than a couple brain cells can see it's not . . .

The last ground-up build I worked, for some reason, the clients turned to me after closing and said, "We don't care how much you made, it wasn't enough."
It felt good that they recognized the value of all the work I did, all well within the bounds of agency law.

But, yes, one of the huge lies promoted by agents is that agency costs the buyer nothing.
When buyers start writing the agents' paychecks, they will have a better grip on it.

jimwdata · 05-04-2010, 07:53 PM

Thanks for all the responses.

Rakin · 05-04-2010, 08:48 PM

I help buyers build about 12 to 20 new homes a year. I personally have custom built 2 very nice high $$ homes to personally live in in the last 6 years.

I know the questions to ask the builder, where to cut expenses and where to spend your money that will add value to a home. I go over every 2 weeks to take pictures and walk through the home, I know how to flip a house to take advantage or avoid the hot TX Sun or where to put the pool so you don't kill the yard.

I could go on but as your buyers agent I guarantee I'll make your home 30% nicer, better laid out, ask the right questions and have the right answers that most buyers never consider. I attend as many builder / new construction seminars and classes as possible every year. I know the good builders and who to avoid.

About 5 agents out of 50 that can probably add a lot of value to your new home construction process. The others will just show up. Find someone who has a background and has helped at least 50 people build a home.

Those agents are worth their weight in gold and know that building is an art and not a mass produced commodity.

twinmma · 05-05-2010, 07:00 PM

I used my Realtor when we built new construction and I am glad we did. Wouldn't pull my own tooth and wouldn't go on my own in a real estate transaction. (I am now licensed but I would still hire someone else to do deals for me personally...just too much emotion when dealing with your own home and money!)
Anyway...He helped read over the contract and helped us understand what it meant. He kept track of deadlines and helped steer us in the right direction in terms of financing and getting home owners insurance. Stuff you sometimes don't think about.
He helped negotiate a good price. He helped pick out upgrades and was able to recommend what would add value and what would not. (granite is nice but he had us go with corian where we were and he was right...we sold less than a year later and we never would have gotten the money back on the granite)
Agents are there to have your backs. Have you ever read through a new construction contract? Do you understand everything it says? An experienced agent has and will help you. And it doesn't cost you a PENNY!
Good luck!

skchi · 05-05-2010, 08:28 PM

We bought a new construction condo without a buyers agent. We had a real estate attorney review all of the documents for us, so we weren't totally unrepresented.

If I had to purchase a property pre-construction again, I would definitely have a buyer's agent. Maybe an agent would have steered us away from a shady mortgage broker that we worked with (a family member of a coworker.) Maybe they could have negotiated some free upgrades. Most importantly, it wouldn't have cost us anything to have an agent look things over for us. So, why not?

Dee2e · 05-06-2010, 06:26 AM

With out a Realtor, remember the contract for you is written by the seller (builder). Do you think they have the buyer's interest at heart? There are many things that a Realtor can add to the process on the buyer's behalf to keep things on track. Many have added things like, shady mortgage pros, also, if your build requires you to pay for title insurance, you can select the title agent (in Florida). Mostly, be wary of price. A Realtor can help you establish the going price for that area. In our market today, this can be very important to your negotiations due to market conditions.