Home Buying in Tehachapi>Question Details

Jill, Home Buyer in Tehachapi, CA

Can a buyer make an offer on new construction without having a realtor involved?

Asked by Jill, Tehachapi, CA Thu Sep 27, 2007

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Hi Jill,

My husband and I were first time buyers when we purchased new construction several years ago without the assistance of a Realtor. While we the process itself went OK, I do have two regrets:

1) I don't think we got the best deal possible on our home. I felt a little uneasy during the negotiation process - when we asked for a concession (like 1 year of no HOA fees), and they said "No" - I really didn't know how to counter those arguments.

2) We weren't sure who to turn to when the house wasn't exactly what we wanted. For example, the developer installed the wrong carpet color in our house, and we didn't notice until we were almost completely moved in. It doesn't sound like a big deal, but to this day (3 and a half years later) my husband and I still complain about our carpet.

I have a feeling that if we had professional representation during our sale, we would have better understood our rights as new home owners. So although it is tempting to walk in to the developer's office and sign up for a new place - I personally would enlist the help of Realtor if I ever buy new construction again.
5 votes Thank Flag Link Fri Sep 28, 2007
Yes you can....There will be a licensed real estate agent representing the builder that will also be representing you. Therefore, they will act as a duel agent and have a fiduciary duty to both parties. There is no cost to you as a buyer in having a Realtor represent you. Get representation with your OWN Realtor.
Web Reference: http://www.sunilsethi.com
1 vote Thank Flag Link Fri Apr 23, 2010
Wow, I wouldn't even try to buy without an experienced agent, there are just too many factors involved and with so much $$$ on the line I just wouldn't chance it. We are getting ready to close on our house and we would have been lost without our realtor.
1 vote Thank Flag Link Fri Feb 22, 2008
Deborah- Great answer! And Sylvia- thanks for the info- the thumbs up worked! Jill- listen to the wisdom given you here- these professionals are awesome!
1 vote Thank Flag Link Sat Sep 29, 2007
The builder will have a real estate licensee (the licensee might not be a Realtor) working on thier behalf. This person's job is to represent the builder, secure sales, and increase revenue through the add-ons and upgrades.

When you choose ot have a Realtor represent you, your Realtor will be working in your best interest to secure the best terms for your contract, and negotiate any concessions on upgrades and add-ons. Additionally, your buyer agent will help you with contracts, and assist you with the multiple decisons you will make through the process. This buyer agent fee for your Realtor is paid by the builder.

While you could make an offer w/o a Realtor, why would you intentionally and knowlingly bypass this representation? Many buyers make purchases from builders not knowing that they could have a buyers agent. Since you are aware of your options, is there any reason to bypass this free professional help?
1 vote Thank Flag Link Fri Sep 28, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
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I have learned that a good realtor knows when there are good deals at the builder, and they can alert you. They know most of the gopher holes in the transaction and how to deal with them.
1 vote Thank Flag Link Fri Sep 28, 2007
That is not the greatest idea, I have had many buyers that would have been at a disadvantage if they were not represented by an agent, Remember it is free to the buyer for good help.
Web Reference: http://kennaandco.com
1 vote Thank Flag Link Fri Sep 28, 2007
Jill:

Great question! The simple answer is yes.

When I bought my first car at 16 I had my Dad come with me. He had time in the trade, knowing what to do and look for.

I would suggest using a professional Realtor. They know, or have the ability to discover, what the undisclosed offers might be with builders. Realtors can negotiate with a builder better because a builder will recognize them as an industry expert. Thereby resulting in a better investment for you.
1 vote Thank Flag Link Fri Sep 28, 2007
Jill,

Sure, remember that you will be unrepresented and if you are unaware of how new construction works you may think you are getting a deal when infact you are helping the buiolder make profit above his base profit. All upgrades are usually priced at 40% and can be usually negotiated into the price if you are skilled and armed with the local market values and trends. The best stratergy is ask for money or extras woithout paying more. Be ready to close in 30 days and try buy at the beginning or end of a phase. I used to build new construction and was in new construction sales, if you need any further tips feel free to cont me at http://www.TeamRenton.com
Web Reference: http://www.TeamRenton.com
1 vote Thank Flag Link Fri Sep 28, 2007
Hi Jill:
Hi Jill:

You can definitely buy a new contruction without having a Realtor involved. But like the answers below, it will probably be best to have an agent represent you when you purchae the home.

The builers who work with agents are very happy to have agents bring the clients and you will get the same deal material wise (meaning house, construction, upgrades, discounts, give aways) whether you use an agent or not.

The added benefit is that you have a professional who will be next to you and help you read through every page of the contract and follow through during the transaction.

Often times, if you want to have your agent's involvement, you will either have to have your agent bring you to the house and sign you in, or you will have to give the builer your agen'ts card/name when you firsr visit the place.

Most of the times, the builders want to handle the transaction themselves, but having your agent as a second pair of eyes and bounce ideas/concerns off is a great benefit to you in the long run.

Many purchases of a brand new homes are handled that way.

Sylvia
1 vote Thank Flag Link Thu Sep 27, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA
MVP'08
Contact
Of course you can.

Realtors that are educated, however, can negotiate with the builders to get you additional upgrades and financing incentives if they are experienced working with builders.

Builders are dying right now and are willing to give away the farm.

A good Realtor knows the in's and out's and can get things for you that you never knew were available.
1 vote Thank Flag Link Thu Sep 27, 2007
Yes, but why would you want to? This is a situation where the builder is most likely a professional who's done this before--and you're not. You have no experienced professional counseling you on what to look out for, what paperwork should be different with a new vs. existing home, etc. As just one example, even if a new home passes the city inspection, if there's a problem who will you call? The city usually has no responsibility. If you haven't gotten a builders warranty, what do you have as far as recourse? In my opinion, this is a situation that strongly favors the builder rather than the buyer. Remember, the majority of RE lawsuits involve unrepresented parties.
1 vote Thank Flag Link Thu Sep 27, 2007
Yes, buyers purchase new construction all the time without and agent. If you have been working with an agent that has been actively searching for properties and showing them to you is it fair not to include that agent? No. Agents dont get paid unless they actually close a transaction. Most home builders have factored in a commission to pay a buyers agent and do not give the buyer any additional upgrades or price cut if the agent is not used. It just puts more money in the builder's pocket.
1 vote Thank Flag Link Thu Sep 27, 2007
Hi Jill,

yes you can....but you are going to be working with the Builder's agent and they are there to get the best deal for the Builder, not you. They might not advise you to have a home inspection....which you should do. They might steer you to their financing when there are better options.

The Builder pays the commission for the buyer's agent, so it's best for you to have representation.

Karen
0 votes Thank Flag Link Fri Apr 23, 2010
Hi Jill,

You can make an offer without a realtor but you should no that the new construction home will have a realtor on there side. I hope you had good luck with the purchase of your home.

Josh Riley
Associated Real Estate
0 votes Thank Flag Link Thu Apr 22, 2010
Sure they can!

I can think of at least a half dozen reasons why you "shouldn't" (some of which have been mentioned before me), but the direct answer to your question is "yes, they can".
0 votes Thank Flag Link Sat Feb 23, 2008
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Jill,

of course but the agent you are dealing with is working for the builder despite how friendly they may seem. If you start asking for upgrades you are paying a premium for these and this is a new construction dream where profit on ahome is really made. A Full time top producing agent can more than cover any expense it may cost you to have representation. In GA buyers Agency is FREE!
Be represented and choose your Realtor wisely. If you have any questions feel free to contact me.
Web Reference: http://www.TeamRenton.com
0 votes Thank Flag Link Sat Feb 23, 2008
Jill,

of course but the agent you are dealing with is working for the builder despite how friendly they may seem. If you start asking for upgrades you are paying a premium for these and this is a new construction dream where profit on ahome is really made. A Full time top producing agent can more than cover any expense it may cost you to have representation. In GA buyers Agency is FREE!
Be represented and choose your Realtor wisely. If you have any questions feel free to contact me.
Web Reference: http://www.TeamRenton.com
0 votes Thank Flag Link Sat Feb 23, 2008
Here is a thread that may give you an idea of some of the pitfalls that can present themselves in a transaction with a builder. While the respondents had Realtor representation (how good that representation was is up for debate), I think you will understand why most buyers would opt to have an ally with them when approaching a builder if they fully understood what was at stake.

http://www.trulia.com/voices/Home_Buying/Pulte_kept_our_earn…
0 votes Thank Flag Link Fri Sep 28, 2007
A very good point, Mansur.
0 votes Thank Flag Link Fri Sep 28, 2007
Hi Sponnie -

Thank you for chiming in to tell people about your experience. Even though I know my advise of using Reatlor is what I truly beleive in; knowing what I know and how we can help the public; I often think it could be difficutl for the public to accept the idea when it comes from us.

Have somebody who went through the process, and who is not in the businsess gives an unbiased opinion and validates our position.

So, thank you!

Patti - you can just hit TU again and it should reverse - it worked for me before.

Sylvia
0 votes Thank Flag Link Fri Sep 28, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA
MVP'08
Contact
I wanted to comment to Sponnie. first of all, I just tried to give you a thumbs up- and accidently hit the wrong button! I am SO sorry. I don't think you can undo (Trulia people, can you change my vote????) Thanks for taking the time to share your experience- it's exactly the experienced I've heard from many people I know. Sorry you hate that carpeting!
0 votes Thank Flag Link Fri Sep 28, 2007
Hi, Jill. You will most likely be better off by using a Realtor to do the transaction for you. Your Realtor will be there to make sure your best interest is being served. The builder may pass on a few upgrades to you but overall it is unlikely that you will save the amount the buyer would have to pay an agent for commission.

Buying a home is very emotional...the agent should be there to be a voice of reason and to go to bat for you!
Web Reference: http://www.DotChance.com
0 votes Thank Flag Link Thu Sep 27, 2007
Jill, I agree with Michelle. I have known people who bought directly through the builder, thinking they were going to "save"- and they usually have regreted it. Often, when going through the builder you are told you are going to save if you use their lenders, or on their upgrades, etc. Have an objective party look at all of this- a Realtor who is there to protect you. You don't pay for the Realtor- the builder does. Make certain that there is someone who is going to go to bat for you if needed. Remember, just like the Master Card commercial- peace of mind is PRICELESS!

Patti Phillips
800-680-9133
0 votes Thank Flag Link Thu Sep 27, 2007
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