Why would you need a Realtor to buy New Construction?

Have you noticed that my posts are starting to start with a question? Probably because I'm having to answer questions for the public that the Realtors Association hasn't manage to convey. Yes I do have a bit of apathy for my industry’s representatives as you can tell. I mean think about it, I know exactly what a plumber does and understand their value. So why doesn’t the general public understand mine?

So anyway, I was on a bulletin board the other day and a person was asking advice as a first time home buyer. One response to her query was that it was best just to go buy new construction because that way she could deal directly with the builder and not have to worry about having a real estate agent and paying them a fee. This is why I thought the gentlemen’s advice was somewhat uninformed.

When you visit a new development then you will be greeted by the onsite agent. This agent may or may not be a direct employee of the builder. In most cases (at least in NC and SC) the onsite agent is in fact a team member of a mega agent or some such. So the builder has entered into a seller’s agreement with a broker to handle the sales side of the builders business. After all, the builder is in the business of building homes and not marketing and selling them.

If the onsite agent sells the home and there is no agent representing the buyer, then that agent gets a bigger commission than he/she otherwise would. If there is a buyers agent involved then the commission is split (may or may not be an even split and commissions vary). The point is that the buyer is not saving money by going it alone. Some builders may tell you they are throwing in the buyer’s agent commission to get you to sign but rest assured the builder has already accounted for the realtor fees. Realtors are the builder’s bread and butter!

So if you go to a builder without a realtor then just keep in mind that you are probably paying the same commission as you would otherwise. So you are basically paying to have NO representation. The builder’s agent represents the builder’s best interest, NOT yours.

Also sometimes not published is the fact that builders will often pay Realtor bonuses on the sale of their homes. I’ve seen them as high as $20,000. The Realtors that give us a bad name will sometimes neglect to tell their buyers that they are receiving a bonus from the builder which really is a bonus that the buyer is paying. The really good Realtors will negotiate that bonus back into the sales price and just ask to receive their agreed upon commission thus potentially saving the buyer thousands!

On more thing to keep in mind when deciding if you want a Realtor representing you in a new construction transaction, what if something goes wrong and you need to go to court to rectify the situation? Wouldn’t it be nice to have the resources of a Real Estate brokerage behind you? Maybe if the builder knew he could potentially get some bad word of mouth from local Realtors he might be more willing to make amends on any outstanding issues.

In closing, you’re probably paying the commission anyway so why not get someone knowledgeable on your team?