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Get a buyer's agent that will rebate you back part of the commission. It's not too tough in today's market to find one.
That's probably the worst piece of advice I've seen on this forum to date.
We can differ on the value of a buyers agent in any particular case. I feel they are usually a benefit, IF you do some work to choose a good competent agent. You know the reasons. Knowledge, experience, skills, connections, yadda yadda. Some people will feel, however, that they can do the job by themselves. Some of those people will be right. So be it.
What is the purpose of hiring an "agent" who is so unsure of his ability, and so desperate for your business, and the attendant paycheck, that they'll simply hand a piece of it back to you? You end up getting shoddy representation from a guy hoping to get 65% of whatever he can manage, instead of a good confident competent professional who will work to protect you & your interests. Either do it yourself and try to negotiate down because the builder or his listing agent won't have a buyers agent to pay, or hire a listing agent who is actually worth the fee you agree to pay.
Get a buyer's agent that will rebate you back part of the commission. It's not too tough in today's market to find one.
I don't think it's too hard either...but I personally wouldn't trust one that agreed to it.
At most, an agent might kick back 1% of his commish...about $4000 on the kind of house PJames is looking at. That might sound pretty nice, but it'll only cover about eight letters between attorneys. Lord help him or her if they end up in court, losing all or a portion of a deposit, or get damaged in any of the other myriad ways that it can happen.
Ch123, I completely recognize how frustrating it is to see all that money going to an agent when a transaction goes smoothly. Perhaps you've never been involved in a nightmare transaction, but they are far more common than people realize.
I personally think that the extra 1% or 1.5% that a good agent makes over that of the plain vanilla agent (the kind who may be more than willing to rebate you) or a bad agent is worth it far more often than you realize.
In my previous post, I mentioned my friend that I helped out of a contract on a Miami condo. She's much, much brighter than the typical buyer and had made many very good changes to the original builder's contract. She even changed a line that said any interest earned on her $100,000 deposit would be payable to her, rather than the builder. But what she didn't know to do is to provide a specific written instruction that the account was to be deposited in an interest-bearing account. After two years, there was no interest earned.
Why didn't the escrow attorney put it in an interest-bearing account? Well, without any written instruction to the contrary, he's not required to. Care to guess who his local banker uses when it needs a variance to add additional drivethrough lanes? Gee, could it be the escrow attorney that deposits hundreds of thousands or millions of dollars for which the bank pays no interest? It's simply the way it's done.
A simple sentence in the purchase contract, a follow-up letter to the escrow attorney, and my friend would have been $5000 richer...on a deal that did not close and on which no agent received any compensation.
Mjames, Can you tell us what state you are relocating to that you are considering building. I ask because as someone mentioned, the laws can be different from state to state. Also, an agent in that state may be able to point you to specific resources.
You have received some really good advice here in this column, the only thing I would add is to talk to your LOCAL REALTOR and ask them to help you find and interview a REALTOR in your new area of choice. The Certified Residential Specialists (CRS) have an amazing network as an example.
Your decision and a tough call. I guess it depends on the builder reputation and their subs.
Recently, I represented buyers who live outside the US on a build that took almost 2 years to complete. I made regular trips to the job site; took progressive photos of the home and the community; kept close contact with the construction super, the county code and permitting people, and the home inspector. I think there were 4 inspections at various stages of the build cycle. After the CO in Sept 2007, I worked with the landscaper, the interior decorator, and a gutter installer.
They had also visited the builder prior to contacting me. When it came time to contract, the builder waffled something about procuring cause. The buyers told the builder there were enough other builders and homes they could get and if they didn't co-op me as their Realtor that they could and would go somewhere else. The buyers were unable to negotiate the builder on the co-broke, but they said I have saved them that amount and more in the long run.
P.S. The home inspector we used had a builder background and a contractor license.
Last edited by TampaKaren; 12-02-2007 at 03:17 PM..
Oh my goodness, I just remembered a military relocation. It was Florida in 2004, hurricanes Ivan, Frances, Charley & Jeanne. The buyers were in Illinois. I made my regular treks out to the construction site for followup. One week, the roof trusses were delivered. Two weeks later, the trusses were still on the ground and sitting in water. I told the buyers. They flew out for a site inspection and spoke to the builder. New super, new subs, new trusses delivered and stored high and dry.
P.S. And I personally cannot reduce fees unless I do less work. Beware of the agents who will discount and then disappear.
Last edited by TampaKaren; 12-02-2007 at 03:24 PM..
In many cases it does not cost you anything to use a buyers agent. Some companies charge an admin fee which can range up to $500. I don't but I know they are pretty common. What a buyers agent can do is get a better deal for you in some cases and what I do is work as the home is being built to inspect it along the way. I find many things that need to be fixed that others don't. When we work with homes we tend to know areas to look out for. I had one that they had not insulated the home which was going to stand in the way of the Certificate of Occupancy. My early detection had us close on time.
When it doesn't cost you anything why not use the experience to your advantage? SO the answer is Heck yea use a buyers agent.
Just to clarify: in my state, Vermont, (and many others) it's typical for the agency representing the buyer (a "buyer's agent" or "buyer broker" would be what the agent would be called) to be paid out of seller's proceeds...the same dollars are offered 2 ways for the convenience of the buyer. If the buyer is represented, the fee is called a "buyer broker offering" if not, it's called a "broker agent offering".
So typically (in fact in my experience, universally) the buyer can designate my company and me as having fiduciary duties to the buyer, and allow us to be paid with somebody elses money.
I tell buyers whether they use me, or another agent, they really should use a buyer's agent. In fact the State Of VT feels so strongly about the value of consumer choice in these matters, that I'm required by law to begin a discussion about "agency" (who represents whom) "at first substantial contact".
Best of luck, MJames...let us know how it goes!
David Beckett, Realtor, CBR
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buyers agent
