Is a realtor worth the investment if you plan to buy in a new developement?

Asked by Movingsoon, Maryland Wed Jan 9, 2008

Help the community by answering this question:

+ web reference
Web reference:


californiabr…, , Los Angeles, CA
Wed Jan 9, 2008
It's a buyer's market for new housing development right now and a skilled agent can help you get thousands of dollars in concessions and upgrades beyond what the builder would normally offer. The builder pays the agent's commission, so there's no investment on your end, except the time it takes to find and retain an experienced agent who has worked with developers and understands how to negotiate with them.
0 votes
Sylvia Barry,…, Agent, Marin, CA
Wed Jan 9, 2008
My experience is that most of the builders will give you the same incentive whether you have a Realtor represent you or not, especially in today;s market.

This is also why it;s more important for you to have a Realtor to help you navigate through the whole maze. Also, even though the builders will probably handle the contract, it's nice to have your Realtor look through the contract to make sure things are handled in your favor.

0 votes
William, Home Seller, 18951
Wed Jan 9, 2008
BTW to be sure, you don't pay the $9,000 in my example, the builder does.

Of course alot of money, that's why some will give you thousands in upgrades and really good loan terms if you don't bring a realtor... Other builders will say "thank you very much" and put it in their pocket...
0 votes
The Hagley G…, Agent, Pleasanton, CA
Wed Jan 9, 2008
The best part about havig a buyers agent in the new home development is that the builder pays your agents commission. You Realtor can help you negotiate the price, as well as upgrades, location of the home, etc.

A buyers agent can also advise you of other home sales in the area (in and out of the development) and help you make sure that you are making a sound investment.

The builders agent represents the builder and his/her goal is to maximize profits for the builder.
Web Reference:
0 votes
William, Home Seller, 18951
Wed Jan 9, 2008
You can go for a rebate and no representation - there are many brokers offering up to 2% of your purchase price back if you use their name.

Also be careful - some builders offer sizable bonuses in features and upgrades if you *do not* bring a realtor. The trick is - you need to find out from the builder ... without giving them your name so that the decision is still yours whether to bring a realtor or not.

DO NOT sign an exclusive buyers agent agreement if you're looking at new construction... don't create a contract that might cause you trouble if the builder decides not to pay commission because, say, the first time you walked through the model home you didn't have a realtor and signed the signin sheet.

Whether you use a realtor or not DO NOT SIGN ANY CONTRACTS WITHOUT HAVING AN ATTORNEY REVIEW THEM! New home purchase contracts are heavily weighted towards the builder. make sure you understand the terms. You can get certain terms in the contract changed if they are unfair, ( I've done it twice.) Really!

Oh, and don't sign away your right to a home inspection.

If you do use a realtor, they may be able to help you negotiate a better deal (builders are dealing in this market and a good realtor may have some insight.) Not just any realtor - I would look for someone with specific, recent, quantifiable experience with the builder. Might be hard to find.

Honestly, the builder does most of the work with new home purchases, but if you are uncomfortable with just a real estate attorney or you find a realtor who knows which buttons to push ... it could be worth it. Remember though - once you walk through the model with a realtor, your realtor gets paid when you buy regardless of how effective they are - make sure you choose somebody who will bring something to the table worth, say, the $9,000 commission they'll get on a $300K home...
0 votes
Jim Welden, Agent, Greenwood Village, CO
Wed Jan 9, 2008
Movingsoon - as usual, Ute provided good advice and additional negotiation skills is certainly an important one - rarely are you going to have to pay anything extra to have a Buyer's Agent so why not have one? I would add a couple of points:

1) Location - an agent can help you identify whether there are any issues with the location that might make it more challenging to sell the home - we have all had listings that were more difficult to sell due to a location issue - the builder rep (because they are always working solely for the builder - at least in my area) will not tell you what issue you may run into when you go to sell the home. You don't buy to sell but it probably is helpful to at least know in advance so that you may negotiate a little wiser - if the builder will not relent on price due to a negative location issue, then you are at least making a knowledgeable decision.

2) Floorplan - same as #1 - those of us in the business are hearing comments about floor plans every day - the floor plan may be appealing to you but isn't it helpful to hear whether others will also think it is appealing?.

3) Upgrades - a knowledgeable agent can tell you whether the cost of the upgrade is reasonable from the builder or whether you are paying twice as much.

4) Contracts - at least in my area, the builders each use their own contract that is heavily slanted toward the builder (most of the time they make me gag!!!) - although you probably have no choice, a good agent will help you understand what rights you are giving up over the standard state contract and what questions you may want to ask.

5) The tough questions - the sales reps on-site tend to have very good people skills and my experience is they will be very friendly - are they going to volunteer negative information? No. Are you going to think of all of the tough questions that they are not going to volunteer the information about - probably not but if you have an agent who has done this many more times than you, both of you may get more of the info before you sign on the dotted line. An agent also can become a supporting witness if a legal issue does develop over a topic that was discussed.

6) Suggestions/Recommendations - if the home is a "dirt start" and you and your agent visit the home site periodically throughout construction, your agent may be able to give you tips about changes that may make your life easier (for example, adding outlets outside the home in strategic locations so that it makes Christmas lights easier to string, or adding a hard surface to heavily trafficed areas).
0 votes
Ute Ferdig, Agent, Newcastle, CA
Wed Jan 9, 2008
Hello Movingsoon. I think that having your own agent (as opposed to the developer's representative also representing your best interest) is always the better route to go. Most developers will cooperate with other brokerages as they want to move their inventory and they are willing to pay a competitive commission to the agent who brings a buyer. Thus, most likely your agent's compensation would not come out of your pocket. You might think that you can get a better price if the developer does not have to pay a buyer's agent commission. However, do you really want to rely on the word of the developer's agent when you make your determination of what a reasonable price is for the house that you are buying. I have seen many examples of people buying straight from the developer and paying a higher price than what they would have paid had they had their own independent agent conduct the negotiations. An independent agent will be able to research recent sale prices in the same subdivision and will be able to tell you what the pricing trend is. I would also highly recommend that you hire an inspector to conduct a thorough inspection of the house you are buying as new does not always mean "no flaws." I have heard quite a few stories told by inspectors who inspected new construction. Sometimes, new construction inspection reveals more problems than inspections of older homes and just because the county or city building inspector passed the project does not mean that everything is up to code and it's much more difficult to hold a government employee responsible than a private inspector.
Good luck with your purchase.
Best regards,
Ute Ferdig
Web Reference:
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more