Home Buying in Santa Clara>Question Details

Prasad, Home Buyer in San Jose, CA

Buyer's agent question

Asked by Prasad, San Jose, CA Sun Feb 24, 2008

Hi,

I'm looking to buy house in bay area and trying to work with an agent as my buyer's agent. Buying a house directly from builders seems straight forward and doesn't look like I need an agent to represent me, assuming I find and deal with them myself. The agent I'm trying to work with has asked me to sign an exclusive agreement. I'm confused. Can I ask her to modify the agreement to include only the resale homes in the agreement ? Please advise how it works and what I should do.

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Answers

7
Prasad, I concur with what Brian had to say. You could certainly ask the agent to ammend a buyer/broker to exclude any new properties, however, why would you want to? Whose best interest do you think the builder/developer has in mind? Do you think that they want to give you the best possible deal? To negotiate better terms for YOU? Heaven's no! You want to be represented by an agent who is out there going to bat for you!

Let me share a story. I lived in a new development about 7 years ago. The neighbor lived in Florida, came out, saw the models and signed the contract. Toward the end of building he came out and noticed that a number of things on his contract weren't built in his model. There was supposed to be a very large balcony off of the master bedroom. Considering that the yards in this particular track were miniscule, the large balcony really made a difference in your outdoor living space. He was supposed to have a cabinet in the downstairs bathroom sink. Instead there was a pedistal sink. Since this was a full bath, and there was no other storage, the cabinet made a big difference. My neighbor didn't have anyone representing him. The builder's reply was, "Look, if you don't like it, then cancel the deal." At that time, property was escalating in value so quickly that they knew they could re-sell the property for more than the contract they had with my neighbor. He was left to take the property the way they decided to "give it" to him. If he had an agent to fight for him, I believe he would have gotten what he paid for and what his contract stated he was getting.

Prasad, be represented. Builders care for themselves, not you! It doesn't cost you any more, and in fact can save you many thousands of dollars!

Patti Phillips
800-680-9133
2 votes Thank Flag Link Sun Feb 24, 2008
Prasad, Many a new home builder are pulling all sorts of tricks to get you into the front door and make a deal. And the vast majority are PAYING agent's to bring their buyers. If your buyer's agent is savvy you'll find out much more about the new home community and market than you can by going out on the weekend to look at homes. What's the absorption rate for the community of interest to you? What credits are being offered? Interest rate buydowns? Upgrades? Years homeowner's dues paid? A knowledgeable buyer's agent who works the new home community can earn you thousands of dollars.
That being said, yes, you can exclude a new home community, a for sale by owner,etc. Just be aware that if you demotivate the agent then they may not represent you to the best of their ability or give you the quality service you deserve. If they have 5 other buyers who are all exclusively represented and who know the value of the service offered, you may end up LAST to get a look at the real good deal.
Remember, every Seller has to sell the property three times; to you, the buyer, to the appraiser and to the Realtor community and the agents therein!! Builders know this and our offering big time incentives to get us to the table. You could instead negociate a certain fee for the agent with any overage being credited to you in escrow as an added Seller's credit. Just make sure your lender is kept informed of these credits as it may exceed their guidelines and cause issues with your loan. Goodluck!!
1 vote Thank Flag Link Sun Feb 24, 2008
you can ASK her to modify the agreement, but instead, why not put her expertise to work for you, and allow her to assist you in the purchase with teh builder too?
1 vote Thank Flag Link Sun Feb 24, 2008
Prasad, Everything is negotiable. You can certainly ask for your agreement to state that; however, your representation in buying any home (new or resale) is extremely important. A great buyer's agent can make sure your situation is handled smoothly and efficiently, while still creating a win-win negotiation for everyone involved. I recently had a couple (who didn't know me at all) bring me into their new home purchase situation because they wanted the representation and someone who understood what was allowed, expected and appropriate. While we are not attorneys, a great buyer's agent can be worth their weight in gold when it comes to navigating the process. Seek out the RIGHT buyer's agent, and you won't regret the move. Thanks for the GREAT question!
1 vote Thank Flag Link Sun Feb 24, 2008
The list price of the property is usually the same if you go directly or through an agent. The agent is paid by the builder. Hence you are not losing anything. You are getting professional help free!!! Why not use it?
0 votes Thank Flag Link Wed Mar 5, 2008
Prasad - I have worked with clients who have purchased new construction as well as converted and remodeled apartments to condos where the builder was also the seller. In both instances, my clients were thankful that they had their own agent - working directly with a builder (as a buyer) can become very emotional and the builder does not always give you options (i.e., must use our lender, most upgrades cost money (even though most are negotiable), etc. Additionally, the builder who was selling the converted apartments to condos didn't like the idea that I recommended the buyer bring in their own home inspector to make certain everything was in working order. I was able to negotiate several items that the builder wanted to leave "as is". I will go the extra mile for my clients and consider every home as if I were going to move into it - hope this helps
Web Reference: http://www.blythelkern.org
0 votes Thank Flag Link Wed Mar 5, 2008
Prasad, Patti and Michael are absolutely right. Why would you want to go up against a professional builder's rep without the negotiating skills and knowledge that a Realtor professional has? The builder has a bottom line he is looking after and you are not included in that! Actually, his plan is to get as much money from you, the buyer, as possible. A Realtor will be looking out for your best interest to keep as much money IN your pocket as possible!
Web Reference: http://www.DotChance.com
0 votes Thank Flag Link Sun Feb 24, 2008
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