Looking at buying from a builder -- should I get an agent?

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mak1277
Posts: 1170
Joined: Fri Jan 09, 2015 4:26 pm

Re: Looking at buying from a builder -- should I get an agent?

Post by mak1277 » Thu Mar 14, 2019 2:23 pm

BruDude wrote:
Thu Mar 14, 2019 1:29 pm
bberris wrote:
Thu Mar 14, 2019 4:22 am
BruDude wrote:
Wed Mar 13, 2019 10:46 pm
bberris wrote:
Wed Mar 13, 2019 9:15 pm
BruDude wrote:
Mon Mar 11, 2019 1:18 pm
A lot of buyers agents will rebate you 25-50% of their commission on a purchase from a builder. That alone is reason enough to use one.
The builder will add the agent's commission to the price. You are paying for nothing.
No they don’t, I’ve never heard of that. It seems consumer protection laws would prohibit them from doing it.
I haven't looked it up, but I seriously doubt there are laws prohibiting negotiated prices for real estate. A builder doesn't explicitly charge for a real estate commission, but you have more leverage if he doesn't have to pay it. All he cares about is the after sale net.
The builder has a set commission to be paid on the sale. If there is no buyer's agent, the listing/selling agent gets the entire commission. If there is a buyer's agent, the selling agent and buyer's agent split the commission. The amount does not change. Ever noticed how happy the selling agents are to talk with you when you have no buyer's agent, then a little less enthusiastic when you tell them you have an agent? That's why.
This is not always true. If the buyer has sales people on staff, their commission isn't impacted by whether or not the buyer has a realtor.

pshonore
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Joined: Sun Jun 28, 2009 2:21 pm

Re: Looking at buying from a builder -- should I get an agent?

Post by pshonore » Thu Mar 14, 2019 3:10 pm

mak1277 wrote:
Thu Mar 14, 2019 2:23 pm
BruDude wrote:
Thu Mar 14, 2019 1:29 pm
bberris wrote:
Thu Mar 14, 2019 4:22 am
BruDude wrote:
Wed Mar 13, 2019 10:46 pm
bberris wrote:
Wed Mar 13, 2019 9:15 pm


The builder will add the agent's commission to the price. You are paying for nothing.
No they don’t, I’ve never heard of that. It seems consumer protection laws would prohibit them from doing it.
I haven't looked it up, but I seriously doubt there are laws prohibiting negotiated prices for real estate. A builder doesn't explicitly charge for a real estate commission, but you have more leverage if he doesn't have to pay it. All he cares about is the after sale net.
The builder has a set commission to be paid on the sale. If there is no buyer's agent, the listing/selling agent gets the entire commission. If there is a buyer's agent, the selling agent and buyer's agent split the commission. The amount does not change. Ever noticed how happy the selling agents are to talk with you when you have no buyer's agent, then a little less enthusiastic when you tell them you have an agent? That's why.
This is not always true. If the buyer has sales people on staff, their commission isn't impacted by whether or not the buyer has a realtor.
If I were a builder and had sales people on staff, why would I even deal with outside agents? Otherwise, why not just figure my price, add 4% for commission and put it MLS?

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hand
Posts: 1340
Joined: Sun May 17, 2009 8:42 pm

Re: Looking at buying from a builder -- should I get an agent?

Post by hand » Thu Mar 14, 2019 3:15 pm

The agent / rebate discussion is small beer... If you are buying from a builder, especially a production / tract builder, it is orders of magnitude more important to get a good inspector and a good lawyer involved which *may* protect you when you find out your insulation is insufficient, your pipes freeze, and your garage dosen't actually fit standard sized cars.

mak1277
Posts: 1170
Joined: Fri Jan 09, 2015 4:26 pm

Re: Looking at buying from a builder -- should I get an agent?

Post by mak1277 » Thu Mar 14, 2019 3:26 pm

pshonore wrote:
Thu Mar 14, 2019 3:10 pm
mak1277 wrote:
Thu Mar 14, 2019 2:23 pm
BruDude wrote:
Thu Mar 14, 2019 1:29 pm
bberris wrote:
Thu Mar 14, 2019 4:22 am
BruDude wrote:
Wed Mar 13, 2019 10:46 pm


No they don’t, I’ve never heard of that. It seems consumer protection laws would prohibit them from doing it.
I haven't looked it up, but I seriously doubt there are laws prohibiting negotiated prices for real estate. A builder doesn't explicitly charge for a real estate commission, but you have more leverage if he doesn't have to pay it. All he cares about is the after sale net.
The builder has a set commission to be paid on the sale. If there is no buyer's agent, the listing/selling agent gets the entire commission. If there is a buyer's agent, the selling agent and buyer's agent split the commission. The amount does not change. Ever noticed how happy the selling agents are to talk with you when you have no buyer's agent, then a little less enthusiastic when you tell them you have an agent? That's why.
This is not always true. If the buyer has sales people on staff, their commission isn't impacted by whether or not the buyer has a realtor.
If I were a builder and had sales people on staff, why would I even deal with outside agents? Otherwise, why not just figure my price, add 4% for commission and put it MLS?
Because you can't control when a customer brings a realtor in.

pshonore
Posts: 6666
Joined: Sun Jun 28, 2009 2:21 pm

Re: Looking at buying from a builder -- should I get an agent?

Post by pshonore » Thu Mar 14, 2019 4:27 pm

mak1277 wrote:
Thu Mar 14, 2019 3:26 pm
pshonore wrote:
Thu Mar 14, 2019 3:10 pm
mak1277 wrote:
Thu Mar 14, 2019 2:23 pm
BruDude wrote:
Thu Mar 14, 2019 1:29 pm
bberris wrote:
Thu Mar 14, 2019 4:22 am


I haven't looked it up, but I seriously doubt there are laws prohibiting negotiated prices for real estate. A builder doesn't explicitly charge for a real estate commission, but you have more leverage if he doesn't have to pay it. All he cares about is the after sale net.
The builder has a set commission to be paid on the sale. If there is no buyer's agent, the listing/selling agent gets the entire commission. If there is a buyer's agent, the selling agent and buyer's agent split the commission. The amount does not change. Ever noticed how happy the selling agents are to talk with you when you have no buyer's agent, then a little less enthusiastic when you tell them you have an agent? That's why.
This is not always true. If the buyer has sales people on staff, their commission isn't impacted by whether or not the buyer has a realtor.
If I were a builder and had sales people on staff, why would I even deal with outside agents? Otherwise, why not just figure my price, add 4% for commission and put it MLS?
Because you can't control when a customer brings a realtor in.
Perhaps not, but there's nothing that says a builder has to consider a contract presented by an outside realtor (absent the appropriate listing contract in MLS). As a former broker, I think I can say most realtors know who builders do and do not work with. Same thing when selling your own house yourself.

Nutmeg
Posts: 170
Joined: Wed Jul 26, 2017 12:52 pm

Re: Looking at buying from a builder -- should I get an agent?

Post by Nutmeg » Fri Mar 15, 2019 10:16 pm

pshonore wrote:
Thu Mar 14, 2019 3:10 pm
mak1277 wrote:
Thu Mar 14, 2019 2:23 pm
BruDude wrote:
Thu Mar 14, 2019 1:29 pm
bberris wrote:
Thu Mar 14, 2019 4:22 am
BruDude wrote:
Wed Mar 13, 2019 10:46 pm


No they don’t, I’ve never heard of that. It seems consumer protection laws would prohibit them from doing it.
I haven't looked it up, but I seriously doubt there are laws prohibiting negotiated prices for real estate. A builder doesn't explicitly charge for a real estate commission, but you have more leverage if he doesn't have to pay it. All he cares about is the after sale net.
The builder has a set commission to be paid on the sale. If there is no buyer's agent, the listing/selling agent gets the entire commission. If there is a buyer's agent, the selling agent and buyer's agent split the commission. The amount does not change. Ever noticed how happy the selling agents are to talk with you when you have no buyer's agent, then a little less enthusiastic when you tell them you have an agent? That's why.
This is not always true. If the buyer has sales people on staff, their commission isn't impacted by whether or not the buyer has a realtor.
If I were a builder and had sales people on staff, why would I even deal with outside agents? Otherwise, why not just figure my price, add 4% for commission and put it MLS?
In my location, builders have salespeople on staff and also list their houses on MLS. Our buyer’s agent showed us resale homes, new homes, and land on which to build a new home.

Topic Author
doss
Posts: 283
Joined: Tue Nov 01, 2011 9:52 am

Re: Looking at buying from a builder -- should I get an agent?

Post by doss » Mon Mar 18, 2019 8:43 am

Going to make a serious push soon.

I still need to sell my current home. I'll be using a seller's agent for this, but if so, should I also have him/her assist with the purchase of the new construction from the builder?

pshonore
Posts: 6666
Joined: Sun Jun 28, 2009 2:21 pm

Re: Looking at buying from a builder -- should I get an agent?

Post by pshonore » Mon Mar 18, 2019 8:49 am

deleted

chevca
Posts: 2792
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Re: Looking at buying from a builder -- should I get an agent?

Post by chevca » Mon Mar 18, 2019 9:24 am

doss wrote:
Mon Mar 18, 2019 8:43 am
Going to make a serious push soon.

I still need to sell my current home. I'll be using a seller's agent for this, but if so, should I also have him/her assist with the purchase of the new construction from the builder?
We bought a new house in 2017 and used a buyer's agent. We used Redfin and they set us up with a seller's agent to sell the old house, and a different agent for the buying part. You might go through the same company for both to keep things simple?

Where I live, the seller pays the commission for the seller and buyer agents. So, it mattered not for us since we paid for both on the sale and the seller paid both on the purchase.

Where we bought, there is no presenting the builder with a contract of your own as suggested above. They would probably politely laugh you out the door. You say we want this house, they present the contract for this house, and you sign it or don't. As others have said, the negotiations, if any, happen later asking for options credits or things like that. The sale price is the sale price. The builder doesn't wiggle on that because then that would allow wiggle room for any future models of that sort, or any house they build really. They don't want that.

We signed the contract for the new house before selling our old house. In the contract though, the builder put a contingency for putting the old house up for sale within a certain time (it wasn't much time) and to have it sold. They will definitely want your old house up for sale soon though. Assuming you don't own the old one outright?

We tried to buy a new build house in 2016 also and that was a nightmare. We were sure glad to have a buyer's agent when things were not going well and they could do the fighting rather than us. The house we live in now, we wouldn't have needed a buyer's agent as everything was smooth as silk. All they did was shuffle paperwork back and forth for us to sign. But, it was a nice insurance of sorts to have a buyer's agent in case anything went south. Again, where I live the seller pays that commission anyway. So, why not? And, we got a little chunk back from our buyer agent on top of that.

Unless it's going to cost you a bunch, I don't see any reason not to have a buyer's agent to assist with buying your new house.

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hand
Posts: 1340
Joined: Sun May 17, 2009 8:42 pm

Re: Looking at buying from a builder -- should I get an agent?

Post by hand » Mon Mar 18, 2019 12:16 pm

doss wrote:
Mon Mar 18, 2019 8:43 am
Going to make a serious push soon.

I still need to sell my current home. I'll be using a seller's agent for this, but if so, should I also have him/her assist with the purchase of the new construction from the builder?
The opportunity to represent on both a sale and a purchase should be good negotiating leverage to reduce the agent's total fees if you are committed to using an agent on both transactions.

Risks of using same agent for both:
1) You're locked in for two transactions if the agent turns out to be terrible
2) Risk of information leakage / loss of bargaining power if selling agent knows details of your potential purchase

A well structured agreement with the agent can lock in a discount and mitigate these risks.

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