Home Buying in Brea>Question Details

jdubc, Home Buyer in Orange, CA

How to negotiate a purchase contract without an agent?

Asked by jdubc, Orange, CA Wed Mar 27, 2013

Planning on getting a new home from a builder but didn't know the agent HAD to be there on the first visit. It's too late now so I'm looking for guidance on how to go about negotiating contingencies in purchase contract. What leverage could I use (if any)? Appreciate the help

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It doesn't sound like a consumer friendly situation for you. We're you told by the sales representtuve that your agent had to be present when you first visited or registered? Do you have a copy of anything that you signed at the time you first visited or registered that advised you that unless your agent was present with you, you couldn't use them therafter to assist you with the purchase of one of their properties? I suggest you seek assistance from a Real Estate Attorney.
0 votes Thank Flag Link Thu Mar 28, 2013
The builder wants you to purchase the home, so just keep asking for what you want. Your able to leverage your purchase by how strong you are as a buyer. Credit score, down payment ect. I'm sure they wil work with you, just act like you want the home but want to make sure it works for you. They will let you know how far they can bend. Remember the sales agent is representing your needs to the builderr. They also know the builders guidelines, however they can ask the builder for more as part of the negotiations. Good Luck!
0 votes Thank Flag Link Thu Mar 28, 2013
Some of the builders require us to register the buyer as our client. They are just trying not to pay a brokerage fee. I am available for any buyer to assist with a new home purcahse especially here in Brea where i can walk to the sales office. Taking an agent with you could save you thousands of dollars; I guarantee it.
David Alex Wright
714.442.9692
0 votes Thank Flag Link Thu Mar 28, 2013
Jduc, You can still use an agent to help you. You will need to first meet with an agent like myself that is will to help you with the contract. I charge a small fee. if you would like to meet with me I be happy to see if I can assist you

Rick Beals, Realtor
DRE 01754811
714-519-1149
0 votes Thank Flag Link Wed Mar 27, 2013
Unfortunately, with the builders, you don't really have any negotiating leverage right now. The truth is that they can very likely sell that lot/home to a minimum of five other buyers right now.

That said, you should make sure that there is a loan contingency built into the contract (unless you are paying all cash) so that if the loan falls through then you get your deposit returned to you. Additionally, sometimes it is beneficial to consider using their lender. Although they can not legally require you to do that, they will often offer incentives such as upgrade allowances and/or closing costs if you allow their in house financing company/department to earn your loan business.

Feel free to call me if you have any other questions, or if you need a sounding board.

Sean Buell
Branch Manager - Coldwell Banker Beachside - NOC
714-287-0604
0 votes Thank Flag Link Wed Mar 27, 2013
Another thing to consider - there are real estate agents out there who would be willing to "rebate" you a portion of their commission paid to them by the builder, if you are ultimately successful in getting an agent registered as your representative. Some agents are willing to do this - because with new construction, they are not spending any time driving you from property to property. If you don't use an agent, the builder either simply keeps the co-op they would have paid to your agent, or the sales representative working for the builder takes 100% of it. These types of rebates are legal in CA, but if you buying in another state - you'll want to check since they aren't allowed in ALL states.

So, it would be in your best interest to try and get a real estate agent involved. Not only would you get the assistance you need, but it also "could" mean extra money in your pocket that you wouldn't otherwise receive.
0 votes Thank Flag Link Wed Mar 27, 2013
Appreciate the insight Terry. I actually asked the builder if I could bring my agent but because we didn't bring them the first time we visited the sales office our hands were tied at that point. They will allow us to bring him along but he won't get compensated via commissions.
Flag Wed Mar 27, 2013
Your leverage is whether you buy or not. A builder working direct with a buyer will stand firm. The standard price is usually set in stone, it is the deal you get on extras and upgrades whether free, at cost or discounted. The biggest part of an agents jpb during new construction is guiding you through each step and making sure the contract is lived up to by the buiklder.
0 votes Thank Flag Link Wed Mar 27, 2013
You can do your own negotiating by contacting an Escrow company and they will help you write up the contract.

I understand you wanting to save as much money if you are the buyer and wanting to get as much as you can net if you are the seller. If you have an agent that you truly feel comfortable with and can work together, you more than likely will end up getting a better price and ending up with a better deal if you are buying, and ending up with a higher sales price if you are selling.

We do work hard at what we do and do a lot of negotiating of terms you might not be familiar with. You have to be careful.

You can do it without an agent, you want to make sure you are protected and I would make sure you have someone who knows the contracts and procedures go over everything before you sign it.

Love,

Bridget
0 votes Thank Flag Link Wed Mar 27, 2013
So, you are asking Agents, how to get by without an AGENT?

Do you call plumbers to ask how you can fix the drain yourself?
How are you at auto mechanics?
0 votes Thank Flag Link Wed Mar 27, 2013
Obviously it was a mistake on my part hence that's why I'm asking for guidance. No need to give snark comments

Do you take pleasure in making unnecessary posts and reinforcing the stereotype that some real estate agents are slimy a-holes?

Real estate professional my ass...
Flag Wed Mar 27, 2013
If the builder isn't going to compensate an agent - you could also hire an attorney for a nominal fee who could attempt to add the contigencies into the contract for you, if you are uncomfortable asking for the changes to be made yourself. The builder, on the other hand, doesn't have to agree to anything you are asking for. They may not agree to any changes to the contract or contingencies you try to add.

Your leverage is quite simply - "Allow me to add XYZ to the contract or I won't buy the house". The builder will either agree, or let you walk away from the purchase.

Hope this helps!
0 votes Thank Flag Link Wed Mar 27, 2013
These days, I would highly recommend you obtaining an real estate agent... There are a lot in Brea that are great, they can help you, guide you in the right direction... Are you trying to buy the property straight from the builder? Does the builder have any representation?
0 votes Thank Flag Link Wed Mar 27, 2013
Maybe you have a friend that knows a agent that could give you some tips? There are also some books you can find on Amazon or in Barnes and Nobles about negotiating real estate contracts. Nolo press might have something.
0 votes Thank Flag Link Wed Mar 27, 2013
Its not too late. Your agent can and probably still can help you, they just aren't entitled t a commission for their work. You could perhaps work something out with them to compensate them for their time and experience in assisting you.

Bottom line is you need contingencies for your loan and inspection of the property. Expect an incremental payment schedule as the different phases finish. Also beware that association dues are subject to change and often do later (becoming more expensive)

The builder contracts are pretty firm with regard to these issues and penalties for backing out can be harsh. I like to have an attorney review all new home contracts as they differ greatly from the standard Association of REALTORS form and almost nobody except the builders agent is really familiar with the agreement for that particular builder. There is a lot of fine print and design guidelines so there is no quick "bullet points" answer that will truly protect your interests.
0 votes Thank Flag Link Wed Mar 27, 2013
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