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I'm looking to buy a house, and I have a newbie question. What's the difference between using a real estate agent, and going through the builder, like Pulte homes? Are there advantages/disadvantages to either? Sorry if this is a dumb question. I'm new to this!
The builder will have there on agent they work for day in and day out. I would recommend you find your on licensed agent, as they will look out for your best intrest better then the builders in house agent. Plus as long as your on the buying end of the deal, your not paying the commision
The builder will have there on agent they work for day in and day out. I would recommend you find your on licensed agent, as they will look out for your best intrest better then the builders in house agent. Plus as long as your on the buying end of the deal, your not paying the commision
Umm you don't pay a commission whether u use your own agent or theirs. IMO u can negotiate more with their inhouse realtor
Builders don't require a licensed agent. Some have them but it is not required.
Whether you can do as well without an agent depends on how much you know. A well qualified investor who has done a number of deals can probably do the same with or without an agent. Note however that in general builders budget agent commission separately from the house costs and it is seldom possible to ever gain an advantage by not using an agent.
I would also point out that, at this point in the housing cycle, buying new is really bad econonically. Basically homes are selling well below replacement costs...but a builder gets replacement costs plus another 10 or 15%. Buying from a builder today you start off down probably 25 to 30% below the price at which you can break even.
So think hard before you buy new. You may be able to buy a new or very close to new home on the resale market at a much lower than dealer price.
An individual agent is going to make a commission, I'm not sure on new construction exactly what amount they have agreed on, but let's say its 2% for the example I am going to give. You pay the builder the agreed upon amount of money for his house and he then gives 2% of that money back to the agent you have brought in. If you use the builder's staff salesperson, they are generally on a set salary. Most definately they are not making a 2% or whatever commission so generally that amount of money the builder does not have to pay out can now become a negotiable sum on the buyers side.
An individual agent is going to make a commission, I'm not sure on new construction exactly what amount they have agreed on, but let's say its 2% for the example I am going to give. You pay the builder the agreed upon amount of money for his house and he then gives 2% of that money back to the agent you have brought in. If you use the builder's staff salesperson, they are generally on a set salary. Most definately they are not making a 2% or whatever commission so generally that amount of money the builder does not have to pay out can now become a negotiable sum on the buyers side.
In the mass builders it is impractical for anyone to negotiate the buyers agent commission. Does not work that way. Comes from different accounts...What they won't do is convert commission to discount of price...and that is the rub. They will give you discounts in builders bucks...but that is worth 20 cents on the dollar.
Note that you can never tell how things are actually done. It is normal in high end places for the sales people to be commissioned almost entirely and even in the high volume places commission is a significant part of the compensation. Some builders use exclusively licensed agents with much commission. Others don't and pay salaries.
I'm looking to buy a house, and I have a newbie question. What's the difference between using a real estate agent, and going through the builder, like Pulte homes? Are there advantages/disadvantages to either? Sorry if this is a dumb question. I'm new to this!
If you purchase a new home without a realtor and use only the builders realtor, it like using the same attorney in a lawsuit. It is impossible to serve both masters. Using a realtor in purchasing a new home they should know the questions to ask such as is the builder paying the transfer tax fee.
Your realtor should monitor the whole process from the begging during negotiations to the escrow accompanying you to close of escrow to make sure nothing goes side ways which it can if there is something wrong in the contract, plus the escrow companies like to add unnecessary fees, that you don't have to pay and a realtor should catch that. Also the realtor should also stay on top of the lender even if it is the builders lender in case there is a problem. I had a client that unbenounced to him in his credit report they had him deceased. The lender didn't want to deal with it because it would take time to find out what happened and get it fixed, I got a hold of a lender that I used and they had someone contact the reporting agency and it turned out the credit union he used reported him deceased the same time his wife passed away. Needless to say we got it fixed and he got his house, If he hadn't had a realtor they would have blown this customer off.
Here is another example, in a normal sale the seller always has to pay the transfer tax, new home builders don't. some builders will pay a part some not at all. That is one example, also you should have a new home inspected outside of the builders inspector. Even though new homes may have a 10 yr warranty and a 1 or 2 year fit and finish there may be something wrong and if you don't catch it under the 1 or 2 year warranty you could be out of luck. for instance a buyer purchased a new home and the vent for the bath room was vented into the rafters and not the roof. If this hadn't been found there could have been some serious problems.
With the market the way it is builders have lowered their prices extensively, and most will pay up to 3% of the closing costs, and some will negotiate. With a new home everything is new your not having to get into multiple offers like the resale's, some new home builders don't have standing inventory so if you have to have one built you have to find out that if the home doesn't appraise at the time it is finished will the sell it for the lower price or will you have to come up with the difference. Some new home builders will buy down your interest rates, some will offer to honor the first time buyers tax incentive even if you miss the November 30th midnight dead line. The home has to appraise out and if it doesn't just like a resale then you renegotiate the price.
I hope this answers your question I don't mean to go on and on.
Hey, thanks guys. I really appreciate the feedback and good advice!
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