Agent represent to build house

[Houston321]

Most reputable builders won't give extra without an agent.

[Bily Lovec]

I just bought a house in Cross Creek, I got a better deal with my Realtor than w/o...

[Supermac34]

Most builders have sales people with pre-determined commissions whether you have an agent or not. The builders' sales person will get their 2-3%, but nothing more even if there is no other agent. This is unlike resales where the listing agent gets more (usually 5% I think) if there is no buyers agent. This usually leaves you an additional 3% to play with when negotiating with the builder.

Most builders are happy to give you all or part of that other 3% rather than pay it to your agent.

The agents on this board will be happy to tell you that they will be able to negotiate so well that they will get you MORE than the 3% back that you would have saved if you were negotiating on your own. This actually might be true, I have no idea, but go into the discussion knowing that there is 3% on the table to get split up between you, the builder, and your own agent (and not the builder's agent) when buying a NEW home.

[Houston321]

Most builders are happy to give you all or part of that other 3% rather than pay it to your agent.


Actually, I have worked for several builders and most of my good friends work for builders and this is a false statement. I would change the "most" to "some"..then it would be a fair statement.

Most reputable builders who have sustained business over time will not give a customer extra discount without a realtor. The reason being is that realtors bring most builders more than 70% of the business, therefore why would you risk your reputation within the realtor community? Most of the builders factor the realtor commission in their marketing budget so that realtor commissions don't factor into the margin calculations of the home.

In actuality it is the opposite. Most reputable builders go out of their way to attract realtor business. They sponsor realtor lunches, sponsor realtor company meetings, sponsor realtor networking events, give big bonuses on top of the standard 3% commission, give prizes at events, sponsor charitable events...etc.

So sure, if you are a short-sighted builder, saving that 3% on the single deal is great, but in the long term it isn't a smart business move for sustainability.

[City Love]

Originally Posted by Houston321

Most builders are happy to give you all or part of that other 3% rather than pay it to your agent.


Actually, I have worked for several builders and most of my good friends work for builders and this is a false statement. I would change the "most" to "some"..then it would be a fair statement.

Most reputable builders who have sustained business over time will not give a customer extra discount without a realtor. The reason being is that realtors bring most builders more than 70% of the business, therefore why would you risk your reputation within the realtor community? Most of the builders factor the realtor commission in their marketing budget so that realtor commissions don't factor into the margin calculations of the home.

In actuality it is the opposite. Most reputable builders go out of their way to attract realtor business. They sponsor realtor lunches, sponsor realtor company meetings, sponsor realtor networking events, give big bonuses on top of the standard 3% commission, give prizes at events, sponsor charitable events...etc.

So sure, if you are a short-sighted builder, saving that 3% on the single deal is great, but in the long term it isn't a smart business move for sustainability.

Points well made. This is very true.

And someone else also made a good point, that if anything, it's good to have a Realtor to bounce ideas off of. I have plenty of clients ask me for opinions on insurance rates, upgrades, elevations, appraisal issues, lender opinions, etc. This is AFTER a deal has been negotiated. I'll be honest, pick a recommended Realtor or one with reviews. Not just any person. It does help to have someone familiar with it who does it for a living and deals with builders.

[cheryjohns]

Originally Posted by Houston321

Most builders are happy to give you all or part of that other 3% rather than pay it to your agent.


Actually, I have worked for several builders and most of my good friends work for builders and this is a false statement. I would change the "most" to "some"..then it would be a fair statement.

Most reputable builders who have sustained business over time will not give a customer extra discount without a realtor. The reason being is that realtors bring most builders more than 70% of the business, therefore why would you risk your reputation within the realtor community? Most of the builders factor the realtor commission in their marketing budget so that realtor commissions don't factor into the margin calculations of the home.

In actuality it is the opposite. Most reputable builders go out of their way to attract realtor business. They sponsor realtor lunches, sponsor realtor company meetings, sponsor realtor networking events, give big bonuses on top of the standard 3% commission, give prizes at events, sponsor charitable events...etc.

So sure, if you are a short-sighted builder, saving that 3% on the single deal is great, but in the long term it isn't a smart business move for sustainability.

Originally Posted by City Love

Points well made. This is very true.

And someone else also made a good point, that if anything, it's good to have a Realtor to bounce ideas off of. I have plenty of clients ask me for opinions on insurance rates, upgrades, elevations, appraisal issues, lender opinions, etc. This is AFTER a deal has been negotiated. I'll be honest, pick a recommended Realtor or one with reviews. Not just any person. It does help to have someone familiar with it who does it for a living and deals with builders.

There is also a thing of trust. I have had numerous dealing with trusted builders/salespeople. I know I can trust those guys that deal well with my clients. That is priceless. I have also had dealings where it has been a guarded situation from the word "go". Other times, a delight. Builders where it has been good - a Houston premium. Here is a clue - good builders - no problems.

[Supermac34]

Originally Posted by Houston321

Most builders are happy to give you all or part of that other 3% rather than pay it to your agent.


Actually, I have worked for several builders and most of my good friends work for builders and this is a false statement. I would change the "most" to "some"..then it would be a fair statement.

Most reputable builders who have sustained business over time will not give a customer extra discount without a realtor. The reason being is that realtors bring most builders more than 70% of the business, therefore why would you risk your reputation within the realtor community? Most of the builders factor the realtor commission in their marketing budget so that realtor commissions don't factor into the margin calculations of the home.

In actuality it is the opposite. Most reputable builders go out of their way to attract realtor business. They sponsor realtor lunches, sponsor realtor company meetings, sponsor realtor networking events, give big bonuses on top of the standard 3% commission, give prizes at events, sponsor charitable events...etc.

So sure, if you are a short-sighted builder, saving that 3% on the single deal is great, but in the long term it isn't a smart business move for sustainability.

This is what bothers me a little bit about the real estate business.

I read the above statements as:

Builders (and buyers) better do business with realtors so they can get their 3% OR ELSE...

[City Love]

Originally Posted by Supermac34

This is what bothers me a little bit about the real estate business.

I read the above statements as:

Builders (and buyers) better do business with realtors so they can get their 3% OR ELSE...

I can see why you say that. But real estate is like all other businesses. A builder looks at it like all businesses do, if they get more business from certain places or people, then that crowd is more inclined to receive preferential treatment, discounts, or incentives. For instance, if you go to get lab work done as a walk-in, prices are more expensive than if you get refereed by a doctor. If you purchase cars through a broker or in bulk, you're likely to get better prices. If an attorney refers you to a doctor, you tend to get preferential treatment or billing deferment as opposed to just setting up an appointment directly.

Builder are more than happy to work with walk-in's and offer them deals if it's negotiated properly. But if Realtors bring in a bulk of the customers, then they tend to want to keep them in the loop and invite them to bring more business.

[Cbink]

Originally Posted by City Love

I can see why you say that. But real estate is like all other businesses. A builder looks at it like all businesses do, if they get more business from certain places or people, then that crowd is more inclined to receive preferential treatment, discounts, or incentives. For instance, if you go to get lab work done as a walk-in, prices are more expensive than if you get refereed by a doctor. If you purchase cars through a broker or in bulk, you're likely to get better prices. If an attorney refers you to a doctor, you tend to get preferential treatment or billing deferment as opposed to just setting up an appointment directly.

Builder are more than happy to work with walk-in's and offer them deals if it's negotiated properly. But if Realtors bring in a bulk of the customers, then they tend to want to keep them in the loop and invite them to bring more business.

We were walk ins and the builder recommended us a realtor to deal with (there happened to be a realtors lunch when we were viewing the show home so they went and grabbed one for us). It worked out in our favor as the builder actually negotiated for the realtor to cover some additional costs (we got an additional price discount and then also the cost to break our lease) that the builder said could only come out of relators commission and not from their discounts. Between the builder and the realtor we got a stellar deal.

I'm not a realtor so can't comment specifically on that, but my customers who bring me the most work get price favors now and then when they need them as they bring me a large percentage of my income and sometimes you have to give a little to maintain a really good relationship. I could see how this would be the same with realtors. An individual buyer is not that likely in the grand scheme of things to purchase multiple houses from one builder, therefore the relator is the valuable customer as they're the person the builder needs the relationship with to sustain business.