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FirstTimeBuy…, Home Buyer in

New construction: Can I negotiate for upgrades because it's too late to use a buyer's agent?

Asked by FirstTimeBuyer, Mon Dec 3, 2012

Earlier this week I visited a new construction subdivision that I really like without a buyer's agent, not knowing that most builders only pay a buyer's agent commission if the agent attends the first meeting. Since there's nothing I can do about that now, can I negotiate with the seller for home upgrades since they aren't paying a commission? When should I bring this up to the seller (now, before closing, etc.)?

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Steven Nusinow’s answer
If you raise the fact that you don't have a buyer's agent, and this is the reason that you want a discount.....they should definitely NOT give you any discounts. The reason for this is.....they would be discouraging representation while the sales rep. is representing the seller.

This is a liability situation for them. Because of this, most builders welcome representation. Please feel free to contact me anytime as I have a great deal of experience working with builders.

Thanks,

Steve Nusinow
(512)922-7588
1 vote Thank Flag Link Mon Dec 3, 2012
FirstTimeBuyer,

I have never seen a builder giving clients a discount/upgrades because there is no buyers agent involved. The fee for a buyer's agent, which is paid by the builder, is taken out of marketing. Having an agent representing you helps in negotiating the price, the upgrades, and many more such as advice on the area, the home etc.

Depending upon the builder, you may still be able to have buyers representation. The sooner you disclose this to the builder the better it is for you. I highly recommend that you have an agent working on your behalf. The sales agent in the builders office is looking out after the builder and not you.

I hope that helps, let me know if you have any further questions.

Best of luck,
Susie Kay, Realtor®
GRI, CHMS, SFR
Residential/Commercial/Investment
English-Indonesian-Hokkien
------------------------------------------------------------------
United Real Estate
469-371-2899
susie_k@att.net

http://www.dfwdreamhomes.net

Servicing your real estate need is my priority!
0 votes Thank Flag Link Fri Dec 7, 2012
Call me at 214-675-6992. If you haven't signed a contract yet, we can often still provide you representation and get paid by the builder. Bring us in as soon as possible. It's better and easier if we are there at the first meeting, but depending on the circumstances we may still be able to come in and assist you.

The commission comes out of a different fund....marketing budget....it's not like now they aren't paying a commission so you can take that amount off of upgrades. Most upgrades are marked high in my opinion so you should be able to negotiate some in some cases. Some builders will, some won't, some may also include a pre negotiated amount in the contract.
0 votes Thank Flag Link Wed Dec 5, 2012
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
First time buyer,

Good day to you.

RULE # 1: YOU CAN ALWAYS NEGOTIATE.
There is an opportunity for a world of savings with the Builder in the purchase process regardless of whether you choose to utilize the services of a Realtor, IF you know how to structure your offer properly and where to seek those savings. Make sure you identify all that is important to you as soon as possible so as not to loose value by forgetting something. Make a list of all changes/options. Establish your perceived value of those options or changes and structure your offer accordingly. Don't be afraid to go in low. You can always come up in terms of agreed to price. The other key is to know what options the Builders are willing to negotiate on and those they are not. Its not as simple as it sounds but it is not that complicated either. It just takes some patience and due diligence.

Rule # 2: Know the value of someone with expertise who can SAVE you money.
You are right that most Builders have their Realtor Cooperation Policies. That said they also know they do not want to lose a sale opportunity. Most Builders will still allow you to utilize the services of a Realtor if you really want one and let them know that right up front.

Please feel free to visit our web site at http://www.CornerstoneNewHomeSolutions.com where you can gain access to a lot of knowledge regarding the purchase and or building of a new home without obligation. We specialize in new home construction and first time buyers. If we can be of any service or help please feel free to contact us.

Best wishes in your New Home Dream and Endeavor,

Stephen B. McClain, Broker Owner
Cornerstone New Home Solutions

SMcClain@CornerstoneNewHomeSolutions.com
512- 876-3116
0 votes Thank Flag Link Tue Dec 4, 2012
Negotiate for sure! Seller has the Buyer and should be able to offer you more bang for your buck!
0 votes Thank Flag Link Mon Dec 3, 2012
YES.... You can negotiate for upgrades.

I have had clients do just that

Tom Burris
Mortgage Banker
DallasLoanGuy.com
(214) 763-4629 cell/text/nights/weekends(Really!!)
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Lending all across the entire Great State of Texas!!
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0 votes Thank Flag Link Mon Dec 3, 2012
If you decide you want a buyer's agent there is recourse with the builder. If you have signed a contract and have put down earnest money your options are limited.

If not, merely bringing an agent to the next meeting is all you need to do.
Yes, an agent can often negotiate a better deal than you can on your own.

However, if you have signed a contract, you are at the mercy of the builder's policies for sale. You can ask, and always should but, the builder has little leverage to agree.
0 votes Thank Flag Link Mon Dec 3, 2012
First of all, you need to tell the builder that you feel most comfortable having an agent represent you and that if you are to move forward, you will be bringing an agent along for your next visit. Statistics show that having a buyer's agent negotiate on your behalf with new construction will result in higher savings than negotiating on your own. My husband and father are builders here in Austin, so I am very familiar with the process. Call me and I'll handle everything for you and get you the best possible deal. -Jolie Kirsten, Keller Williams,(512) 745-7006
0 votes Thank Flag Link Mon Dec 3, 2012
I would ask for the upgrades and have an agent in at a minimum, intermediary representation from the listing Agents Broker.

Many times in new construction, you can get an intermediary status that requires the listing broker to assign an agent to represent the buyer and another to the seller. This way you can have private conversations too all and get the representation you deserve.
0 votes Thank Flag Link Mon Dec 3, 2012
Depending on the builder, you may have an opportunity to obtain representation, despite already crossing the threshold and viewing the model. Really depends on the builder and whether you've entered into contract negotiations. I've represented several buyers in just this scenario.

Now, to your question at hand. Can you negotiate builder incentives vs. them paying a fee to a buyers agent. My experience (and you're likely to hear this echoed) by others is builders have a budgeted program as to what they're offering. Most projects in Austin have plenty of buyers interested and as such, if a buyer agent is not written in a transaction, they becomes extra profit for the builder. Caveat, that this is highly specific to the builder.

Please feel free to call me at 512-522-8470 if you'd like to discuss. Kevin
0 votes Thank Flag Link Mon Dec 3, 2012
FirsTimeBuyer,

In my experience, the builder's position on not paying buyer agent commission can be negotiated if you're willing to tell them that there's no deal if what they are telling you is that they are not permitting you to get the representation you are entitled to. This is akin to denying you a right to representation. If positioned correctly, you can get this overturned.

Note, they will tell you that if you don't have a buyer's agent, they might be willing to just credit you that fee, but you're still not getting the representation you need to evaluate the deal and determine if it is fair and at market rate.

Please be careful, first time buyers of new homes are the ones most in need of representation. I've dealt with many people over the last few years that were in your situation and had to sell their home within a few years of buying it (new), and they get taken advantage of all the time.

If you don't already have someone to represent your best interests, please call and I'll more than earn the commission I'm paid to represent you.

Best wishes,

Jeffrey Schnabel
Representing People, Not Properties
512-913-7480

Broker | Partner | Keller Williams
SCHNABELJS@GMAIL.COM
0 votes Thank Flag Link Mon Dec 3, 2012
Typically, the builders don't discount because they are not paying a buyer's agent commission. Most, if not all, pay buyer's agency commissions out of the advertizing budget, not the budget they use for construction costs. The answer, is you can always negotiate on you own. Just be prepared to take a hard stance on it and walk away from the deal if they won't negotiate. Good luck with it, and next time employ a Realtor to help you along the way. You'll likely get a better overall deal, and also be able to relax and enjoy the process, instead of getting all tense about trying to do something you're not particularly knowledgeable nor experienced in.


Ron Cullinan
Avalar Austin
GRI, CRS, ABR, CLHMS, e-Pro
512-799-3239
austin_realtor@earthlink.net
http://www.austinonlinehomes.com
0 votes Thank Flag Link Mon Dec 3, 2012
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