Question Details

Johnny, Home Buyer in Oakland, CA

Bring an agent to a new development?

Asked by Johnny, Oakland, CA Tue Jun 17, 2008

If I don't bring an agent to a new development, would I get a better deal, since the developer won't have to pay my agent's commission?

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No. Builders assume that a certain percentage of buyers will be represented by agents based on statistical measures. They then build the cost of paying commissions into their product, but will not relinquish it to a buyer that is not represented by an agent. Statistically, it is not in their interest.

Nor are your interests in their interest, and their sales staff does not have the same set of legal and ethical constraints that licensed agents and REALTORS have. When a buyer deals with a builder sales representative, the buyer is facing off against a sales pro who knows how to press the right buttons. If they have a good agent, they have the counsel of a pro who can take the air out of the fluff, and provide realistic perspective.
0 votes Thank Flag Link Wed Jun 18, 2008
Johnny, you'll actually get a better deal if you DO bring a real estate agent to the developer's sales office with you!

The developer does not take commissions into consideration when negotiating price - that's part of their advertising costs, and part of making sure that the Realtor community continues to bring buyers to the builder's developments.

A qualified Realtor who is familiar with negotiating with developers can generally get you a better deal than if you walked into the builder's sales office on your own. Typically there are "back end" incentives, such as credits towards closing costs and improvements, that can be negotiated as well as price. In fact, many times the builder/developer will have more "money" available for this back-end negotiating than they will for price reductions. Why? Because the back-end negotiations don't lower the pricing for the development, and they don't cost the builder dollar-for-dollar what they're giving you in credits.

The builder's rules are pretty much the same across the board on this though: If you want a Realtor to negotiate for you, you'll need to bring your Realtor with you on your very first visit to the builder's sales office. Typically each sales office has it's own registration, so if a builder has multiple development in your area, you'll need to bring your Realtor to each of those sales offices. Just make sure that your Realtor will stay with you through the negotiation process as well as through contract signing. We see many Realtors who make a mad dash for the door as soon as the registration form is signed, and that's not going to help you get your best deal with the developer.
0 votes Thank Flag Link Wed Jun 18, 2008
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