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Since there are real estate professionals on here... Please help me with the decision I'm faced. We're planning to build in a few months. After eliminating national builders due to the problems that seem to occur with them and lack of service, we've decided to check into local custom home builders. We're in contact with some, one of them told me even though getting a buyer's agent is a decision that's recommendable, "somebody" has to pay for the agent. I told him that from what I know the seller/builder pays for the agent. Well, he told me that a "custom home builder" will subtract the agent's cost from the final price of the house if no agent is used, which can be as much as $10k.
My question would be... this being our first home, we don't have any experience in purchasing or building. I am a very involved person though, I do my homework and research, but I'm not too confident that I'll be able to deal with it all myself. I do want to be able to communicate with the builder directly, not having to rely on a 'middleman' all the time.
Do we absolutely need an agent? Do we miss out on so much stuff we don't know to ask for if we don't get an agent that it would be worth not getting one? Or would the benefit of getting one offset the cost?
Thank you for your opinions and answers in advance
Honestly, no you do not 'absolutely' need an agent. Also, the buyer does pay for the agent no matter what you're told.
I didn't have one and squeezed the builder extremely hard. Now, if you're not a good negotiator or if you don't have the time to invest 24/7 in the whole process, then yes I would get an agent.
Since there are real estate professionals on here... Please help me with the decision I'm faced. We're planning to build in a few months. After eliminating national builders due to the problems that seem to occur with them and lack of service, we've decided to check into local custom home builders. We're in contact with some, one of them told me even though getting a buyer's agent is a decision that's recommendable, "somebody" has to pay for the agent. I told him that from what I know the seller/builder pays for the agent. Well, he told me that a "custom home builder" will subtract the agent's cost from the final price of the house if no agent is used, which can be as much as $10k.
My question would be... this being our first home, we don't have any experience in purchasing or building. I am a very involved person though, I do my homework and research, but I'm not too confident that I'll be able to deal with it all myself. I do want to be able to communicate with the builder directly, not having to rely on a 'middleman' all the time.
Do we absolutely need an agent? Do we miss out on so much stuff we don't know to ask for if we don't get an agent that it would be worth not getting one? Or would the benefit of getting one offset the cost?
Thank you for your opinions and answers in advance
I find it interesting that your custom builder didn't bring up reducing the price of the house by 10k until you mentioned realtor representation. Almost sounds like he would prefer you did not have representation. If you do decide on representation, get a realtor who is very experienced with new home construction and will also lay out their plan as to what they will do during the process to insure that you are getting what you are paying for(i.e., quality of materials, workmanship, etc.). This also might involve hiring a certified home inspector to check out the construction during a few key phases of the process such as a pre-drywall inspection as well as a final inspection once contruction is completed. If you don't get representation, I agree with a previous poster that you will need the time and knowledge to be very involved.
I think there should be consideration to whether or not the builder is working with a listing agent in a subdivision, or is just being hired to build a home on land that the OP already owns. If the builder is already represented by an agent handling the subdivision, then the buyer should get their own representation.
My question would be... this being our first home, we don't have any experience in purchasing or building.
Customer builders in my area differ greatly. A Realtor in your area would know more about the builder, how they work, their reputation for the contractors they use, their ability to finish on time, how they live up to their contracts, if there is an hub-bub about difficulties they are having financially, etc than you can research on your own. That said, while you don't NEED to have a Realtor, you really should have someone experienced with the whole process on your side. Make sure you have an attorney look over the contract so you know you are covered fully, what your rights are according to the contract and what the consequences are if they or you do not perform. You have no experience. Find someone who does, first in the contract, and then someone who does in the construction arena, such as a construction manager who will watch the building process from start to finish. The cost will be well worth it. You'll learn from both of them and the next time you won't need anyone...you'll be experienced.
Texas,
If you already own the property the home is being built on, I would recommend hiring an attorney to screen the contracts and a construction consultant to oversee the building process.
Sandy
Texas2008,
You absolutely need to hire a Realtor that is a buyer's agent and also knowledgeable with new home construction. You must also check the builder. Speak to the last 5 jobs he did. Building a house if you are not prepared can be a nightmare. Lots of custom builders had a different name, had too many complaints against them, they declare bankrucpty then they come back under another name and start over. Everything you agree to has to be in writing. Most builders have their own contract and they are written up so they are protected... not you.
I agree. Also get the builder to post a performance bond. And I would have a lawyer look at the builder's contract. As with most contracts, they are one sided as they are written to protect the builder not you and generally there is no recourse if the builder defaults. In today's market it could happen to the best of them. And there is no protection against that no matter how diligent a real estate agent is.
I am a realtor, and a decent person, and there's a lot of us out there that are decent. I thought I'd get that out of the way because some people think everybody's the same once they have bad experience. Anyway, my advice is for you to have a buyer's agent, especially if you have gone to a model and the agent there took care of you. They make commissions too even if they are employees of the builders. Try to remember that whatever price the builder has posted on their flyers applies whether you go thru a buyer's agent or not. So commissions are built in to their pricing. The law does not allow different pricing just because you have an agent to represent you, unles of course it's a custom home where you can negotiate personally, or understand construction better than a clueless realtor does.
If the buyer's agent you have is familiar with the builder and their homes, there's a lot that they can do for you. They can ask for some upgrades, some customization, or break in the price, because of the rapport that has been established with the builder or the inhouse agent. They also can find you inspectors that will check on the construction while being built, or barring that, check on it themselves to make sure that you are kept abreast of the development, etc.
Although the realtor's fee is earned already once they bring you to the builder and you go into contract to build and not do anything else afterwards, there's a lot that a buyer's agent can help you with.
I have been known to house plans out of town to my clients where they are if there are customization involved that has to be worked out and they can't come to us. But then of course it depends on the realtor you find, if he/she is more service oriented. You can find this out right away when you first interview somebody who's after the job by throwing questions, testing the answers...I also enjoy shopping and looking for beautiful things, so I go and help them do this, and no I don't get referral for this, thank you very much, although I have been offered to register for it by some furniture store. By the time the house is finished, I have become friends with the homeowners and would rely on that goodwill for referral, I wouldn't squeeze them anymore, I'm pretty satisfied having earned my commission and their friendship and goodwill. I have earned well enough to have a quality of life for me and my family, and will not endanger that relationship with a few more bucks to earn some baubles. It's hard enough for these people to find all the money to build their new home. I know because I have done it for myself before I became a realtor.
Good luck to all of you out there who's building or looking to build one!
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