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We're looking at switching from buy to build, land prices here are ridiculously low and builders are chomping at the bit to get someone signed up. We have a non-contracted agent who's showed us 10 properties or so... we came across the builder by way of a sunday ad and wend and checked out their gig, the builders agent asked about ours so we volunteered his information as our agent which was fine. Now talking to another builder we found ourselves a friend... Do we have to keep our agent? Can we expect hell for severing the relationship and going it alone?
If you never signed a buyers representation agreement with the broker/agent that was driving you around then you are under no legal obligation to use him/her. This is strictly a matter of your conscience and morals as a human being. I suspect there is a little bit of that bothering you otherwise you certainly wouldn't have posted anything in here, rather you would have just cut the agent loose already.
You have to ask yourself two questions;
1. Do I want to go it alone and do a business deal without any sort of representation, guidance, or advocate on my side because I believe I have befriended the builder?
2. Can I sleep like a rock if I cut this other agent out after he/she took their time driving me around on their dime and time, all while trying to educate me about market conditions, neighborhoods, schools, property values and the overall buying process....
And just a note about the builder reps... they work for the builder, the seller! They are there to get their builder the highest possible price for their product. They are SALESMEN! They are not your "friend". A Buyers agent will have your best interest in mind on all aspects, including buying the best for resale, but the builder's rep could careless because they have to sell all the lots and all the houses no matter what.
If you never signed a buyers representation agreement with the broker/agent that was driving you around then you are under no legal obligation to use him/her. This is strictly a matter of your conscience and morals as a human being. I suspect there is a little bit of that bothering you otherwise you certainly wouldn't have posted anything in here, rather you would have just cut the agent loose already.
You have to ask yourself two questions;
1. Do I want to go it alone and do a business deal without any sort of representation, guidance, or advocate on my side because I believe I have befriended the builder?
2. Can I sleep like a rock if I cut this other agent out after he/she took their time driving me around on their dime and time, all while trying to educate me about market conditions, neighborhoods, schools, property values and the overall buying process....
There is some moral question there... not much honestly but some.
as to 1. I know the builder very personally and have for a long time (some 8 years.) I called him only at the suggestion of a friend because I didnt think he'd build in my price range.
Aside from the question of the agent compensation (fees from builders is not really big part of MOST real estate agents earnings, but the few who do a lot of that really do rely on it...) I would be reluctant as all get out to do any deal with any builder that I could not prove had more reserve funds than Fort Knox -- hardly a day goes by when I do not see a well known builder in my affluent area go bust, and some of these guys are struck as fairly smart and cautious too. When the "money pipe line" goes dry these guys have NOTHING ELSE going on, so you are correct they are chomping at the bit. I would have a sit down with THEIR banker and attorney as well as my own before I did business with any one whose ability to deliver a house depends on the overall real estate market...
Aside from the question of the agent compensation (fees from builders is not really big part of MOST real estate agents earnings, but the few who do a lot of that really do rely on it...) I would be reluctant as all get out to do any deal with any builder that I could not prove had more reserve funds than Fort Knox -- hardly a day goes by when I do not see a well known builder in my affluent area go bust, and some of these guys are struck as fairly smart and cautious too. When the "money pipe line" goes dry these guys have NOTHING ELSE going on, so you are correct they are chomping at the bit. I would have a sit down with THEIR banker and attorney as well as my own before I did business with any one whose ability to deliver a house depends on the overall real estate market...
I was thinking the same thing when I started to read this post. I tell all my buyers that are thinking about building right now that it could be a possiblilty that the builder may not finish it or run into some other problems. Not to mention that when building a home, you won't see the discounts you have on existing homes. I also strongly suggest if you go this route (besides what the other posters said about the benefits of an agent) that you must put everything in writing (especially change orders) down to model numbers, type of plumbing, type of building material, etc. Sometimes corners will be cut to make their numbers as the economy changes (building materials/inflation).
You found yourself a friend? Are you implying this new builder is your friend? If so, make no mistakes, he is not your friend...he is in business to make money. Keep your realtor.
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