Home Buying in Brooklyn Park>Question Details

Grant Sales, Home Buyer in Minnesota

New construction agents?

Asked by Grant Sales, Minnesota Mon Feb 4, 2013

My Wife and I are looking for a newly built or currently being built homes in the NW Twin Cities area. We found one decent property / development within our price range (

Help the community by answering this question:

Answers

10
Grant,

Having a buyers agent protects you, as Chris and the other agents have stated there are lots of items that you can look at and negotiate over.

Personally, if a builder told me that the comission would be added to the sales price that would want me to have one even more. Are they trying to discourage you by stating this? If they were what are they trying to hide?

just my 2 cents.

Good luck!
1 vote Thank Flag Link Tue Feb 5, 2013
he is "Hands-On" which means he frames himself on many homes, does the trim work and is on the job site very often. Another comment about working with a agent or not, one of the reasons that a Buyer wants to work directly with me as a dual agent is simply the experience that I have with the entire process and who better to work with ? Experienced or a novice? I can tell you that in the 2006-2010 era, Builders were more flexible with Standard Features and allowances, but since the market for new homes is extremely hot, builders will not budge an inch on any item. We include as Standard, the most common items that homeowners would want in a home such as 3 car garage, vaults, brick, Stainless Steel appliances, Center Islands or snack bars. Once you have selected a plan, whether you have another agent or not, I will be the one that goes over every detail of the plan with you and at that time will make suggestions that matches your lifestyle. Such as a larger 3rd stall (even though a 3rd is standard). We have nearly 25 developments for you to choose from Brooklyn Park to Cambridge. Your budget will simply determine where you choose to move to. Go to http://www.RCABuilder.com for exact locations. Jeff
0 votes Thank Flag Link Sat Feb 16, 2013
Hi Grant,
You need a buyer's rep Realtor familiar with new construction. We have a number of projects going so you can see different builders, quality, areas, prices, etc. There are a million details that your professional Realtor must handle for you. You should interview a few Realtor, ask for their references (and check them) and get your dream homes. There are some interesting financing packages available for these homes.
Web Reference: http://www.mywra.net
0 votes Thank Flag Link Sat Feb 9, 2013
Hi, Grant!
Oh, this is a GREAT question!! Many buyers do not know that it's in THEIR best interests to have their own agent representing them BEFORE they start going to builder's models and so forth. If you start going to open houses and THEN bring an agent with you when you're ready to purchase, it mitigates that agent's ability to be involved. The builders have regulations about when your agent/buyer agents come in to the transaction, and most of them say "BUYER AGENT MUST ACCOMPANY THEIR CLIENTS ON THEIR FIRST VISIT TO THE MODEL".

I would say talk to a few agents and find someone who is a good fit for your needs. For example, agents who have had a fair amount of experience with a variety of builders is a good choice because they can help you negotiate and find the best deal.

Good luck!
0 votes Thank Flag Link Wed Feb 6, 2013
Well Grant I will answer your question by telling you how things are going with my current buyer.

We are doing new construction over in Ramsey at the new COR development. The lots are all pretty similar, and the houses being built were very similar as well.

The first builder that we were going to go with had a standard feature sheet that made pretty much no sense. When I ran the cost by my own builder we figured that my client was going to be over-charged by $20,000 bucks! Well, needless to say we did not go with that builder.

The 2nd builder we actually worked directly with the listing agent. He also pretty much sucked, and even though I repeatedly gave him a budget the Realtor kept coming in 15k over. That one got dropped fast as well.

The 3rd builder had an excellent listing agent that was on the ball. Seriously it felt like night & day compared to the first builder. When we went to a model home in Lino Lakes I could see $$$$ all over the place that were just part of the standard features. We moved quickly and went with that builder.

Yea there are still change orders, and there are some items on that standard feature sheet you need to watch out for.

1) Appliance & lighting allowances (HUGE difference between builders). The lighting allowance is the biggest, because we easily added 8 can lights at $125/can. Each extra outlet is $40 a pop.
2) 100AMP service (you better have 200 it just makes sense)
3) Think about the carpet (It costs like $800 for us to upgrade from a stupid 4-year to 10-year higher quality)
4) Size of garage (20ft. CAN work for many vehicles, but in today's world I think you need at least 22ft. and I would prefer 24ft. this is not something you can change down the road)
5) Did you know that most new homes don't come with an A/C unit? The weirdest thing on the planet I found out through this whole process.
6) Can you believe that a garage door opener may not be standard? Unreal!
7) Do you want knockdown ceilings? Popcorn is getting out-dated

Obviously builders don't want you thinking about this upfront because that is an opportunity to negotiate. They would prefer you to sign off, and then nickle & dime you throughout the build in change orders. After going through this process with my buyers the #1 piece of advice I can give is know what you want. If you can negotiate the upgrades or higher allowances as part of the standard feature sheet it will save you thousands of dollars.

And then realize even then this is a 100% custom home. There will be change orders and that is OK! just try to do as much upfront as you can. I will say the hardest part of my experience was finding the right builder to do the job, and then from there reviewing the standard sheet with my buyers see we limited the "surprises".

You also have to say to yourself "what upgrades are worth it cost wise to do now rather than later?" bumping up the amp, extending the garage (we actually added a 3rd by the way), FSZ, electrical, etc... are all things I would think about upgrading because I know it will add value to the home and will not be cost-effective later.

Lastly, you certainly need to get the financing lined up as well. Grant, if you feel confident this is something you can do alone then I am not going to pretend that a Realtor is a MUST. Hopefully I have given you some things to think about. We are set to close in April most likely, and once the build starts I have very little interaction with the builder. It is mostly my clients going to various vendors to pick out material.

Where a Realtor is the most useful is at the very beginning. Some people think the price a builder gives you is non-negotiable...that would be false. Some people think the standard feature sheet is not negotiable...that would be false. What if the builder tries to charge you a lot premium? Yup that is still negotiable.

Personally I have never heard a builder deny a Realtor commission. Brings me back to another item....when it comes to seller paids the builder will tell you those have to be built into the sales price. Once again, that is false.

At the end of the day the builder needs to make money. Some builders I can just tell are so cheap they have very large margins. I prefer to work with builders that are more upfront and care about bringing a quality product. There may not be a ton of negotiation room, but if I can save you even $7,000 dollars would that be worth it?

The majority of all builders pay our fees, so I think you just need to make a call with this builder Grant and decide if it is worth going solo or working with someone else.

Either way I hope you found this info a little more helpful!

~Chris
0 votes Thank Flag Link Tue Feb 5, 2013
I agree with Heidi, plus any skilled agent knows how to negotiate the price to include his commission.
0 votes Thank Flag Link Tue Feb 5, 2013
I believe it is in your best interest to have an agent. You need to decide how you feel about not being represented. An agent will help the process stay on track, make sure you are getting the best deal possible and have someone on your side if there are problems. Do people do it? Yes. Knowing and trusting the builder is very important. I am curious? Which builder are you going with?
0 votes Thank Flag Link Tue Feb 5, 2013
This still isn't really answering any questions.

Is it in my best interest to go through an agent or just work directly with the builder?

The builder has already said that any commission that a real estate agent takes would be added to the house price.
0 votes Thank Flag Link Tue Feb 5, 2013
Grant,
I've read many of the responses that you have received and I can say that from my 19 years of selling New Homes (1,000+ units) that any reputable builder has a listing agent that reprsents the builder and quite often the buyer as well. A Quality builder will rarely work with a buyer directly, this is is simply because the builder normally has a solid contract with a Realtor who handles the sale. Furthermore, at least in my case - I also invest and purchase many developments myself and make them exclusive to the my Builder or a few select other Builder's and their agents. This is so we can collectivally offer more developments to our customers. So, if a Builder began to sell directly to a buyer, the lots would be immedialty not avilable to that Builder. Any reputable builder already has a commission in the sales price, if a Builder has to raise the price to cover a commission then I would question their integrity and experience. My Builder has 25 years experience and
Flag Sat Feb 16, 2013
Hi Grant! I just built last year and highly recommend it! As you may know, the further out you go, the better the lot prices. I would love to talk to you about this. Before I built I interviewed 10 different builders (yes, 10). There are just so many variables, you want to make sure you pick the right one in the right area- at the right time. If you are interested, give me a call. Especially since I just went through it, I know I could help a lot! Give me a call at 612-325-5594 or e mail at heidih@kw.com .Thanks!
0 votes Thank Flag Link Mon Feb 4, 2013
I would love to help, please give me a call to address your needs.

Kal Mansour, e-PRO®
Broker/Owner
Real Estate Corners, Inc.
(612) 483-1230 Direct
http://www.realestatecorners.com
mailto:kmansour@realestatecorners.com
0 votes Thank Flag Link Mon Feb 4, 2013
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer