Robert,
“What's the name of the realtor who harmed you financially? Of the approximately 1 million agents in the country, there have to be a few bad apples; just wondering which one of them made such a bad impression on you?”

None, financially. I was cautious and simply asked a few straight forward questions.

With approximately 1 million agents in the country, you’d think that a few would try to root out the “bad apples” and not leave it up to bloggers and us “regular folk” to point them out them?

Tue May 20 2008, 17:43

Robert,
What's the name of the realtor who harmed you financially? Of the approximately 1 million agents in the country, there have to be a few bad apples; just wondering which one of them made such a bad impression on you?

Tue May 20 2008, 14:54

Remash, what you have described is the typical builders’ response from circa 2005. Those manning the office had to answer very few questions and in no way needed to be bothered with room sizes or other dimensions. The extent of their knowledge stopped around “yes we have granite counter tops”. With lenders giving away money to anyone with a pulse, and the ensuing frenzy, “these places were selling themselves”.

Now that the market has cooled, they can probably expect more folks really asking questions. I’ve heard some strange stories similar to yours. Buyer thought he was getting X, instead got Y. Representation or no, mattered not. The builder’s response: “Don’t like it, move on, I’ve got 20 other buyers lined up behind you to buy”. No amount of finagling from a realtor could compete with those 20 others willing to buy.

Judging by the dialogue you posted, I see very little value added from your “representation”. Sounds like you used something that has been lacking in the housing industry in the last few years……

Common Sense.

Tue May 20 2008, 11:04

Here's some more to read for the sake of commedy:
Builder: Here's the blue print for the models Remash.
Remash: Great, let me take a look.
Remash: Cool, it has A, B, C, D, and E elevations.
Builder: Those are the ones being built.
Remash: What is the size of the garage for the D elevation, since that is the one we want and it is absolutely important that it is 23 - 24 ft long.
Builder: - rustles through the prints - hmm, can't seem to find that. But the A elevation's garage is 20 ft.
Remash: That's irrelevant. We want D built. The layout is different. Oh, this is the first time we have seen A, B, & C. We did not know you sold those elevations. They are not listed in the brochure or anywhere on your website.
Builder: Oh really?
Remash: Ok, we really need a list of all the standard features because it appears nothing is available anywhere. We could not find it on the website.
Builder: Umm, let me check with - so and so.
So and so: Here it is.
Remash: This is the standard features for elevation A, B, & C.
Remash: I stopped by this other builder, x, today and they gave me this printout of all of the standard features - pulls the paper out and places it on the desk.
So and so: Let me check something on the computer........... It looks like the builder is not building elevation D. That must be why we could not find the garage size in the blue prints.
Remash, Remash's wife, Representation: - dumb founded and shocked - WHAT?! We are here specifically because of that model. Only for that model.
So and so: hmmm
Builder rep: I had no idea, I'm so sorry. I've only been working here for a few days now. I did not know this is how they did things here.
Representation: OK, we are going to leave now so we can regroup.

---- they called her later that day to let her know that the other elevation that is on the brochure and on the website, elevation E, is not being sold either. They now have elevation F, of which no one but the architect knows how it looks. And - it is $15k more that what we thought elevation D was.

Tue May 20 2008, 05:33

Thanks for the helpful update Remash. Sounds like you have a great agent who is providing value to the process and you have good teamwork going on there. Nice to hear stories like that.

Mon May 19 2008, 19:39

“ We found out things during the meeting that we probably would not have thought of without her. In particular, the builder represented a rise of a model on their brochures and website that we wanted. That was the only reason we were going to purchase from them. During the meeting between them and our agent we found out that they are not building that model and have 2 other models that they do not even show or list on the brochures.”

Remash. Please elaborate further. I don’t think I’m getting the big picture here. I can’t imagine the conversation going something like this:

Builder: Yes, Mr. Remash, what I can I do for you today?

Remash: I’d like you to build for me the home pictured on the brochure.

Builder: I’m sorry Mr. Remash, we are not building particular model, but we do offer these additional models.

Remash: Huh??

Realtor: What he’s saying Mr. Remash, is that he’s not building that model, but is building two other models that differ from the one pictured.

Remash: Thanks realtor type person for clearing that up for me (it’s a good thing I brought representation)

If that’s indeed the case, I recant everything I said earlier and suggest you double your agent’s commission.

Mon May 19 2008, 18:40

Good luck!! Glad to hear you got yourself representation....To comment further of course YOU pay for the agent since someone commented that the buyer is the only one writing checks @ closing...true, however I was simpy stating that getting representation costs you nothing MORE than if you didn't...Is that better??? and FYI I have been to several closings where the "seller" has cut a check...probably due to the buyer's good representaion....

Mon May 19 2008, 08:11

We did contact our agent and she went with us this morning. She was definitely needed. We consider ourselves to be pretty educated with these matters but she certainly helped a lot. We found out things during the meeting that we probably would not have thought of without her. In particular, the builder represented a rise of a model on their brochures and website that we wanted. That was the only reason we were going to purchase from them. During the meeting between them and our agent we found out that they are not building that model and have 2 other models that they do not even show or list on the brochures. All said and done, we had to walk away pretty upset with huge question marks above our heads. They were confusing had did not even know what the standard features of the homes were. I'm still shocked. Thanks to all of you for your advice. They all deserve top rating.

Mon May 19 2008, 05:09

“The builder does pay the buyer's agent, its built in to the cost. If they don't have a buyer's agent to pay the standard advertised co-op fee to, they keep it.”

And anyone that does not bring a buyers agent can negotiate the fee to 0. No agent, no fee.

“My friend can get out of the contract, but he will lose his $5000 deposit.”

Should have had a real estate attorney. Moreover, should have realized that negotiations are part of buying a house.

“People who like to point out that real estate agents are always biased towards higher prices and more money, don't understand the business. Buyer's agency binds me as an agent to a feduciary relationship with my buyer client.”

Not many agents I know work for flat fee. As long as there’s a commission involved, there will be bias towards a higher price. If that were not the case, we’d see quite a few more flat fee services.

“I am bound by laws and ethics to represent his best interests, which include the best price, best terms and his protection”

And there are constant examples of these ethics and laws. One only has to look at the blatant DOM re-sets and dropping the asking price to the sale price at the time of sale. Both practices skew MRIS data which is reported to the public as fact

Sat May 17 2008, 20:52

The builder does pay the buyer's agent, its built in to the cost. If they don't have a buyer's agent to pay the standard advertised co-op fee to, they keep it. They generally do not pass it on to the buyer, no matter what you have heard. Most builders welcome agents and value them, there are only a handful that don't, and in my experience, there is a reason why.

I just had a call 2 weeks ago from a buyer who wrote an offer with one of those builders. His house is taking months longer to build than they expected, the interest rates just went up on him, and that has bumped his payment higher than he wanted, but he is still locked in because of the language of the contract. The builders use a different contract than the MAR contract, and it is written unilaterally, like Mansur said. If it were a resale contract, with a buyer's agent, the agent would have made sure he had contingencies to get him out if he could not get the financing he was pre-approved for. My friend can get out of the contract, but he will lose his $5000 deposit.

Buyer Agency really means the buyer has representation. Their best interests are being looked out for by the agent. Agency came about in the late 90's, and in my opiniion its one of the best changes we've seen. Before that, all agents worked for the seller, and buyers had no one looking out for them, legally. Because Maryland is a strong consumer advocacy state, we have been on the forefront of agency issues. It's something that buyers need to be educated about, because it is a great advantage to them.

People who like to point out that real estate agents are always biased towards higher prices and more money, don't understand the business. Buyer's agency binds me as an agent to a feduciary relationship with my buyer client. I am bound by laws and ethics to represent his best interests, which include the best price, best terms and his protection. I don't want to be brought before an ethics committee because, for a few hundred dollars, I didn't fully represent my client. I believe most agents are good people who feel as strongly as I do about their integrity and good name.

Sat May 17 2008, 16:50

Few of things I’d like to point out:

The seller pays the buyers agent? Seems to me the buyer is the only one writing checks at closing. The commission is simply passed through to the buyer.

If you’re worried about “builder contracts are unilateral and provide very little protection for the buyer”. Obtain the services of a real estate attorney. May cost you a few hundred dollars, but that’s a few hundred dollars for someone that represents you, not someone who’s incentive it is for you to pay as much as possible for a home.

Noticed anything in the news lately about home builders? They are feeling the crunch. They are ready to deal. Maybe more so than homeowners that are still trying to get 2005 prices. Just a year ago, these homebuilders were not using selling agents. No need, they were selling themselves. Now, to try to move inventory, they have even started to list on the MLS. Chances are, you can get “free” upgrades that your soon to be neighbors had to pay through the nose for just a few months ago. But beware of using “preferred lenders” and any other “incentives” that seem too good to be true. That’s where the aforementioned attorney comes in again.

I noticed a comment “why are you buying a house that is not built yet when there may be so many on the market already”. That’s the only one I can somewhat agree with. But with inventory at record highs, these realtors want to get that number down and hence the motivation for you to buy off the rack. There are many free online research tools out there on real estate. It should be quite simple to pit the builder and existing sellers against one another at get a good deal.

Fri May 16 2008, 19:50

I do not recommend buying a home without representation -- specially a new home since most builder contracts are unilateral and provide very little protection for the buyer. Your buyer's agent should be able to provide a market analysis comparing your new home with existing homes as well as other new homes which should educate you on what might make sense to offer or what concessions such as free options or closing help you might be able to negotiate from the builder. In a very recent case, one of my clients was about to buy something from a builder and when it was totalled up with all the features he wanted, I saw that if he went the resale route he would save quite a bit of money and I told him to wait a couple of days because I had a few things to show him before he committed himself to the builder. He eventually bought a much larger house at a location he liked even more than the new house with all the features he wanted at an amazing price. This comparative perspective is invaluable to buyers.

Fri May 16 2008, 17:00

I would highly recommend getting your own represenation...Just incase you are not aware of it. (many people aren't) ...as a buyer it costs you nothing to have realtor reprentation...the seller pays...A real estate agent can answer all your questions and make sure your getting a fair deal..

Fri May 16 2008, 15:46

There's a particular model that we like that is not yet built anywhere on the development. It's not too small and not too big.

Per representation: we understand the risk of going without one. We have an agent through Remax but she is not involved in this. We have been looking at the Stanley Martin homes in Wildewood way before we even met the agent.

Fri May 16 2008, 15:42

Remash,

My question to you is, why are you buying a house that is not built yet when there may be so many on the market already? A builder is more willing to negotiate on a home that is already built and sitting vacant than a
a home that he has to build. Also, do what Mike said and get representation with a buyers agent.

Fri May 16 2008, 15:32

Hello, If you dont have an agent then you don't have any representation. You neeed a buyers agent. The agent that is handling the offer is working for Stanley Martin. I would look at what other homes have sold for but I would first get a buyers agent who will help you with the offer. Good Luck.

Fri May 16 2008, 15:19