Home Buying in 77301>Question Details

Paul, Home Buyer in Conroe, TX

Realtor vs. Builder's Agent

Asked by Paul, Conroe, TX Thu Dec 6, 2007

If I am looking at a brand new home to be built in a community is it better to go through a realtor or just go with the builder's saleman? Pros and Cons please.

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19
Make a buyer's representation agreement with a REALTOR, and make sure the agent accompanies you to any new homes sales office. If the agent is busy serving another client when you would like to be out looking, forgive him/her for having to divide time between you and another client.

The new homes sales agent works for the builder, and owes you only truthfulness--but half-truths are likely to meet any legal test of truthfulness. That debt of truthfulness is also based only on the potential for civil action if they are not truthful. REALTORS are governed by strict laws, national and state, and an even stricter code of ethics in addition to the potential for civil action. REALTORS also have the motivation of wanting to count on each client's referral and repeat business--an even more powerful incentive for providing the highest level of service.

A buyer's agent will be working for you and representing you. A good one will caution you about the "puffing" (& other half truths) used by the new home sales agent, and provide you with the whole truth. A REALTOR will also be able to advise you about financing, what to look for in a new property that a builder's agent may prefer you do not know, and how to negotiate the contract terms.
2 votes Thank Flag Link Thu Apr 24, 2008
Without representation from a realtor in any real estate transaction, the realtor is working for the party selling. If you sign a Buyer's Representative agreement with a realtor, their loyalties will be to you!
A Buyer's Representative Agreement can be for hours, months, or years! You the consumer decide what time frame you choose for the realtor to represent you. If you do not have a realtor, the builder's salesperson is working for the builder and has the builders best interest in mind. In my opinion, you will come out on the best end of a deal if you have someone working for you.
1 vote Thank Flag Link Thu May 8, 2008
I've been on both sides of this fence having represented 5+ builders for a long time, yet working with buyers on homes I know may have issues later...

Let's go about it this way, when you buy a resale home, you have an inspection right? Why not have an inspection on a builder's home. So...
When you buy a resale home you use a Realtor so why not use a Realtor when you buy a new construction home...

Pros = The agent is trained not to be impressed with the staging of the home (we've seen it before...); the agent is looking for workmanship and the materials used and knows what is quality and what is covered up; the agent knows what kind of questions to ask the builder about warranties and other stuctural questions in addition to other questions the average buyer doesn't; the agent is there to make sure that your needs and wants are met; the agent will point out the "builders" falacies if any regarding pricing and area information, especially taxes info if there are existing homes to use to compare to for taxes; so much more...

I can go on with much more, remember being on both sides makes it easy to know these things. There are a lot of communites today with foreclosures being the prominent sales - hindering any other sellers that have to sell for whatever reasons... Homes were sold at much higher prices to unknowing buyers that "listened to the builder" without using an agent...
That's why it is in your best interest to allow your Realtor to represent you.
Web Reference: http://www.michelleallen.us
1 vote Thank Flag Link Thu Apr 24, 2008
I really hate to have to say this because I am talking about my past self. I was once a builders agent - and I can tell you some of them are little more than " used vacumn sales men"( I did not want to hurt the car salesmens feelings). And again some of them have their name on the back of their belt so that they know who they are. Some of them are very knowlegable and respectable but how do you know who is who - remember the first mentioned is the one that can fool you. ONe does not have to have a Real Estate Lic. to be a builders agent therefore there are no checks and balances in place.
Most builders have a the price padded for give aways, commission, bonuses, and so forth, the realtor knows this and will work to get you the best deal.
Work with someone that will be held accountable for their actions.
Web Reference: http://www.century21conroe
1 vote Thank Flag Link Thu Apr 24, 2008
Paul

Builder's agent represents the builder and looks out for the builder's best interest

Your realtor represents you and looks out for your best interests.

Best of luck with your new home
1 vote Thank Flag Link Thu Dec 6, 2007
I have been a builder rep for almost 7 years. At this point in my career, I get most of my business from referrals and realtors. I am just shocked to hear all these horrible comments about builders and thier reps. Because of my experience over the years a large percent of my customers are referrals from Realtors. The realtors I work with, in most cases, never come into my office with thier buyer. The realtors trust me to take care of thier customers. They DO NOTHING but show up at closing to collect thier check. I register thier customer, assist in getting them prequalified, show them our homes, prepare the contract...takes pictures of the home during the building process, follow up with them throughout the building stages, attend the walk through etc etc. Why do the realtors drop thier customers off at my office? Because they trust that I will take care of thier customer. Customer satisfaction is a priority with my builder. Listen guys, I'm not sure what builders you work with but don't lump all builders and builders reps into your conversation. Over the years I've worked with alot of very shady realtors that did not have thier customers best interest. Oh yea did I mention that it is very embarassing when your buyer finds out you only showed them new homes that had a 6% commission or $10,000 bonus and the new home pricing was $10K more.
0 votes Thank Flag Link Sat Apr 12, 2014
I just looked at new homes with my son this past weekend - just looking and was appalled at what the builder reps said and also how evasive they were with answers in the homes we previewed. They did not know that I was an agent, and saw me as a parent who could mess up their sale.

When I could not get a straight answer to the simplest of questions, I wondered how any buyer could hope to get "the best home at the best price" or even a win-win without representation.

My son was offered 3% off if he did not use an agent . UPFRONT! Most of us that have worked for builders know that they have to turn a profit, 30% mark up on upgrades is not unusual, and they want to sell the less desirable lots first. Any smart builders rep will not point out any negative qualities of the home or community. If you are building from dirt, you see the jazzed up model, and not a true indicator of what is offered at base price. If you dont do this every day, you may not know to look for differences in anything from a cadet toilet to an elongated one, to the heights of ceilings, doors, type of hardware, lighting, plumbing, finishes, trim. The list is enormous. Most people get intimidated even with an experienced agents help.

This is getting way too long, but in Texas the builders rep does not even have to be a licensed real estate agent, so there is no fiduciary responsibility, no concerns about fairness, and certainly no code of ethics for that builder's rep to worry about. I just wonder where they were planning to make up that already built into the price 3%. Title policy? Back end by "encouraging" the buyer to use their preferred lender? Gouging the buyer on upgrades? Cutting corners?
0 votes Thank Flag Link Tue Nov 8, 2011
At the end of the day there are buyers that feel that they are as knowledgable and experienced as a Realtor and will "go in alone". This buyer might be the same person who represents themselves in legal matter. There is usually no question when you hire a lawyer to whom they represent... If you sought out the lawyer, the lawyer represents YOU. If a Builder seeks a saleperson to sale their product/development for them, then you better believe that the saleperson's specific task is sell the Builder's product. Who does the Builder's Salesperson Represent... really..... Come on, do you really have to ask? Now if you hired an Agent (any agent who cares to earn a commission and a living assisting people in the buying and selling of real property) who would that Agent Represent?
0 votes Thank Flag Link Mon Nov 7, 2011
Hi Paul,
Although I am a Realtor, I do feel it is best to have prepresentation. The builders salesman is looking out for the best interest of the builder, not the buyer. The price of the home will be the same either way. Your buyers agent will protect you and get you setup, then you can meet with the builders agent and get your home built. Almost like two agents for one!
Best,
Renee
0 votes Thank Flag Link Tue Oct 12, 2010
Ask yourself. Who is working for me?
0 votes Thank Flag Link Thu May 8, 2008
At the risk of sounding redundant, a realtor is looking out for their client, in this case the buyer. The builder rep. is looking out for the builder's best interest not the buyer's. Also any good builder know that a good realtor makes everything easier for everyone involved.
0 votes Thank Flag Link Thu May 8, 2008
Ask yourself this. If I were giong into battle, can I really trust my foe? I hate to put it in those terms but it is true.
The purpose of a Realtor is to fight for your best interest just as they would their own. We know the questions to ask if you don't.
0 votes Thank Flag Link Thu May 8, 2008
A Realtor is a second party looking out specifically for a buyer's interests when the buyer is purchasing new construction from a builder. The builder's salesperson is looking out for the interests of the builder. By utilizing the services of a Realtor, a buyer has additional help in assuring all aspects of the sales contract have been sufficiently met and another "set of eyes" to assist with walkthroughs, punchlists, and final inspections. Often buyers, specifically first time buyers, are hesitant to identify "little" flaws in the workmanship. A Realtor representing them generally has less trepidation about pointing out these construction flaws or shortcomings.

New construction with builders that cooperate with Realtors costs the buyer the same with or without the representation of a Realtor. That said, why would anyone not want the free assistance of a real estate professional on their side?
0 votes Thank Flag Link Thu May 8, 2008
I have represented many buyer's in new construction and most of the time I have found the listing agent gets paid "by the door". They really only care about the amountof homes they are able to sell. A buyer's agent who has been thru the process usually knows the concessions each particular builder will give ie: window screens, closing costs, % of upgrades etc. They also know that the market has changed even for builders who in the past were not willing to negotiate price. Your agent, in most cases, can research and tell you what the climate is like in your market.
0 votes Thank Flag Link Thu May 8, 2008
Always use a Realtor to represent your interests.....I really can't think of any con....the pros are many....check out my website under DFW New Homes to see why you should use a realtor for your purchase.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Thu Dec 6, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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If were to go through are Realtor they would be working in your best interest. If you just use the Builder's Agent you need to make sure that they are going to rip you off, by trying to get you to pay for the survey Title Policy and the whole nine Yards. I am sure that they wouldn't but just be aware, because the are working in the Best interest of the Builder.
0 votes Thank Flag Link Thu Dec 6, 2007
At this point you are saying, yeah you are all pros answering but they are right. I haven't always been a licensed agent, but I've been real estate a long time.

Get someone to advocate for you. I've never heard of a deal falling through over commission (and I'm sure some have, but not as many as the public thinks).

Just make sure your broker 'procures' the deal, meaning don't start shopping until you find a agent. Builders b.s. the public sometimes about the way commission works. Builders pay more commission than the average consumer (in most cases, there is no set commission rate), plus offer major buying incentives to buyers. This is why resale homeowners can't 'compete'.

There are tons of threads about this on Trulia. Hopefully, you'll have time to peruse the various insight from more than just 'pros'.

Good luck!
Susan Walker
0 votes Thank Flag Link Thu Dec 6, 2007
The realtor fee is built into the price of the house... So if you think that you are saving money by not having a Realtor, you are mistaken.

Get a buyer's agent that has experience with new construction. They can advise you on what items you can negotiate the most and which builders have a better product and which ones have the best incentives.

Durenda is right. The builder's rep is obligated to sell you a house for the most on behalf of the builder and a buyers agent's job is to get you to pay the least for the best.
0 votes Thank Flag Link Thu Dec 6, 2007
In my opion, always use a realtor that you have entered into a buyers agency with. Once you entered into a buyers agency with a realtor, by law, they have to put you first! They can not think of themselves or the other parties involved. Also, it will cost you nothing to use the Realtor. The builder will pay all of their fees. And sometimes, you can receive a rebate back from your Realtor.
0 votes Thank Flag Link Thu Dec 6, 2007
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