Home Buying in Sunnyvale>Question Details

thisoneguy, Home Buyer in Sunnyvale, CA

Is working with an agent recommended/worthwhile if buying a house through the below market rate program? ((Sunnyvale; new construction)

Asked by thisoneguy, Sunnyvale, CA Tue Oct 15, 2013

I'm looking into buying via the Sunnyvale BMR program. Considering the sale price is fixed, and the terms of the sale with the city are already set, do real estate agents typically get involved in these transactions? Are there any agents who specialize in handling BMR purchases?

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Hi thisoneguy,

Below is a link to the Sunnyvale BMR website:
http://sunnyvale.ca.gov/Departments/CommunityDevelopment/Hou…

Under the "I am eligible, how do I buy?" you will see:
"Note that a real estate agent is not necessary for the purchase a BMR home; however, you can choose to select a participating real estate professional, at YOUR OWN EXPENSE."

The "Participating Realtor List" is located at:
http://sunnyvale.ca.gov/Portals/0/Sunnyvale/CDD/Housing/for%…

All of the Agents charge a $3000 COMMISSION when representing a Buyer.

Also, the BMR "Participating Lender List" is located at:
http://sunnyvale.ca.gov/Portals/0/Sunnyvale/CDD/Housing/for%…


Now, regarding the hiring of a Buyer’s Agent:

This depends on how risk averse you are – do you consider the $3K fee to be an unnecessary expense or insurance?
Probably the best thing you can do is to contact some of the approved Agents and ask the simple question of why you should hire them!

In this case, it sounds like you would be buying a brand new built home; therefore, I would assume the Builder would be responsible for issues -- confirm this and/or understand your exposure (depending on the answer you may want to have your own property inspection performed).

-Steve
2 votes Thank Flag Link Wed Oct 16, 2013
Technically, you don't need a Realtor to purchase a BMR property or at least this is what the city will tell you. You will need someone to help you navigate through the piles of paperwork and you can hire an agent to help you do that. However you will have to pay them yourself since the builders are not paying any commission to Byers agents on a new construction BMR's. Let me know if you need help as I am very familiar with the City of Sunnyvale BMR program.
Thanks.
Galia Taneva
(409$307-2950
Web Reference: http://www.galiataneva.com
1 vote Thank Flag Link Tue Oct 15, 2013
Lindsay Elia, I don't know the rules in San Francisco but I can't imagine they are much different. None of the new construction developers in Sunnyvsle are paying commission to the BMR buyer's agent. If you would like to hire one - you pay for his services. You and your agent may want to look into that si there are no surprises at the closing table.
Regards,
Galia Taneva
0 votes Thank Flag Link Tue Nov 26, 2013
Speaking as a BMR buyer in San Francisco, who recently looked at a new construction unit and is already working with a realtor of my own - I expect for my realtor to be paid by the commission of the sale, not out of my pocket, no matter if it's new construction or an existing unit. In California, it seems that new construction can put in a clause that if the buyer is unaccompanied by a realtor on their first visit, then the selling agent will retain the commission that would normally go to the buyer's agent. While there is not much negotiating for BMR units, it can only help to have a knowledgeable realtor on your side, who is working for your interests and not the seller's interests, while you are in the process of purchasing a home. Either way, someone is getting that commission, so it may as well be someone who is working in your best interests.
0 votes Thank Flag Link Mon Nov 25, 2013
Ah, as usual, my pal, Steve Ornellas, beat me to the punch. His answer is perfect!

To be frank, none of the new home builders will pay for the commission to cover the Realtor from the participating pool of Realtors willing to work on a BMR unit purchase. The reason...the developer is already taking a sizeable price reduction in selling the home through the BMR program so that there is no incentive to pay for the fees, and the City of Sunnyvale is also working hard with mostly volunteers to run the program to keep costs down for everyone.

Does this mean you'll need a Realtor to purchase a home in a new homes development? Short answer...no.

The developer has their own contract, their own agent, and they understand the process to purchase a home through the BMR program with the City. Since most BMRs are "standard" units, there's little to negotiate in terms of upgrades, and there will be no incentives offered to BMR purchasers to negotiate as their might be with a home bought at the market rate.

So feel free to look at the home and to negotiate the purchase for the BMR. Make certain that you adhere to the rules promulgated by the City in order to purchase the home correctly and, more importantly, to (when the time comes) SELL the home correctly. Unless you plan to hold the home for an extra long period of time, you won't be able to sell it for market price when or if you wish to sell. Be sure you're comfortable with all of the terms before purchasing.

Good luck!
Grace Morioka
Allison James Estates & Homes
0 votes Thank Flag Link Thu Oct 17, 2013
Thanks for the replies, everyone. At this time, I was mainly wondering if the seller typically pays the realtor's commission. I would like to visit a model home soon, but didn't want to do it without a realtor if there was a possibility that the seller would pay the referral commission. Based on Steve & Galia's responses, it sounds like this would be a non-issue and that there is no down-side to seeing homes on my own for now.
0 votes Thank Flag Link Wed Oct 16, 2013
You need a Resltor as the city has a list of approved agents.
0 votes Thank Flag Link Tue Oct 15, 2013
A good Realtor is always a good idea because they are a lot more familiar contracts than the average person will be. The best part is it cost YOU NOTHING.
Web Reference: http://ToddHomesForSale.com
0 votes Thank Flag Link Tue Oct 15, 2013
So…you seem to be doing your homework. Have you talked to the City of Sunnyvale program administrator? I suspect that you will get some guidance in regard to the need for professional assistance and guidance in making your purchase.

Given that the seller pays the agent’s commission, what do you expect to gain by DIY home buying?
0 votes Thank Flag Link Tue Oct 15, 2013
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