Spinoff to my own 'New Construction' Thread & WWYD?

I've been dealing directly with the listing agent for the new construction - so there would not be a separate buyers agent in this case unless we wanted to pay him/her out of pocket which we onbviously can't do at 2-3% of sale price. I'm nervous about not having anyone 'on our side' so to speak. I mean - we're not dealing directy with the builder except for when it comes to plans, etc. - but the builder's (seller's) agent would be the same as ours. Is that too risky? What are the pros/cons? TIA!

Message edited 5/16/2011 2:30:43 PM.

Re: Spinoff to my own 'New Construction' Thread

we bought a new construction condo with a buyer's agent and he spilt the seller's commission - we did not pay anything for him - but it may be the seller's agent that is lying to you to keep her full commisison -( my buyer's agent did not find us the condo but helped us look at a ton of other properties so i thought he deserved the commision)

but honestly he did not do much- new construction especially of a condo is more straight forward - but it is nice to be able to bounce things off of them

the big things are to get the plans and what is included from the builder = the timing - very important and is there an out if they take too long - can be important with financing

also are there any financing oppurtunities- with our condo there was a deal with wells fargo that we could have a 9-month to year lock for no cost just needed to put 1% down to hold the mortage but that would be applied at closing time to costs - also within a month or 2 of closing we could float it down for free once

also you need to know what is an upgrade and what are the costs of the upgrades

Re: Spinoff to my own 'New Construction' Thread

Thank you! Your post is really helpful in my overall thought process. You bring up two points -

The seller's agent was completely upfront and honest. Some may think this was too bold of a statement - but I appreciate him being real. He put it like this - I found his website, I contacted him and explained what we were looking for, he called me back when a lot became available, we are meeting this week to go over details. My buyer's agent has not been involved at all and so he doesn't feel he should have to pay him out. He said it nicely and professionally - but that's the basic point.

My buyer's agenet has been working with us for 6 months. He has spent a lot of hours with us and emailing/calling us. We know him through a friend of a friend and don't want to do wrong by him. At the same time he has slipped up on couple of things so far so while we feel morally obligated to him, we wouldn't be at a loss without him.

I think it's interesting that you said you didn't need your buyer's agent for much - that's what we were wondering about. How much will he come into play here? I suppose he can help us negotiate costs and walk us through the step by step but ultimately a lot of it will be our decision. Plus we have a lot of family members in construction/real estate so we can utilize their expertise (some are out of state or else we would just use them directly).

WWYD?

Re: Spinoff to my own 'New Construction' Thread & WWYD?

You sound like you are in the same position I was with our buyer's agent - he worked with us on and off for about 4-5 months- taught a lot obotu that was a good price and what was not, good areas and bad, but then on a whim we went to see the new construction condo without him and that was what fit us best. We decided he deserved the commision because he spent a number of days with seeing many listing. He also paid for the courrier fees so i did not have to leave my office and travel across the city to drop paperwork off, he helped us a little with negotiations but there was not a lot to negotate and there were not many upgrades possible on our condo - it was very high end to begin with.

he gave us a recomendation on a lawyer - while i could have handled it (i am attorney) i wanted help

we never siggned anything with him but i tend to be honest and want what is fair for everyone. The seller's agent i know wants the most commision they can get but i think my buyer's agent deserved something- i would ask what the seller's commision rate is and then say if it is 4% tell him my buyer's agent should get 1.5% instead of 2% as a fair deal

but keep in mind yes the seller's agent called you when a lot opened up but that is also part of his job in selling the property - it is not to say that your buyer's agent couldn't have called him if you instructed him too you just didn't

Re: Spinoff to my own 'New Construction' Thread & WWYD?

I am confused... When you say "buyer's agent," do you mean that you signed a contract with an agent to have him represent you, the buyer, or do you mean you were just working with an agent previously? If it's the former, and you have a contractual agreement, you don't really have a choice. Your agent is going to get his commission if you buy a home before your contract with him expires (regardless of who pays him).

Also, is the listing agent also the builder (that is sometimes the case) or a realtor who the builder gave the listing to? Is it listed on MLS? I am assuming it is, because you said there's a listing agent. If it is listed on MLS, then the seller is probably already offering out commission (2%, usually) to the agent who brings the buyer. It's not for the listing agent to now say that he won't share the commission because you initially contacted him and didn't mention having an agent (btw -- why did you do that in the first place?). No one "owns" the buyer (unless the buyer signs a contract with an agent), and you as the buyer have a right to decide who you want to present an offer to the seller on your behalf and work with you throughout the process. If the listing agent didn't want to share commission, he shouldn't have listed it and offered out commission to a cooperating agent (assuming he did). Although if you've had many discussions and/or meetings with the listing agent and never mentioned you had an agent or got your agent involved, I can see why the listing agent wouldn't be happy.

If it's the listing agent's exclusive (not listed on MLS) and you didn't sign a contract with the agent you'd been working with, then that agent is out of luck. Not very fair to him, especially if he's been working with you over a period of time and has invested time with you. But that's a pitfall of working with buyer's in a real estate sale -- you basically work for free and you can show someone 100s of homes and NEVER get paid for your efforts.

Personally, I am not sure why you would want to deal directly with the listing agent and/or builder. I think there are more pitfalls and unknowns when buying a new construction home than a regular type, why wouldn't you want an advocate? I had a buyer's agent when I bought my home (before I was in real estate), and I am an attorney and my husband works in banking. Maybe we would've been fine on our own, but I was not going to take any chances, given this is a huge transaction. Better safe than sorry!

Also, you say the listing agent is 100% honest -- and maybe that is true (although I am not sure what you are basing it on, other than his comment about the commission). But keep in mind, his job is to sell the house quickly and to get the most money for the seller, NOT to make sure that you have all of the information and do your due diligence and not to ensure you don't overpay. No matter how professional or even friendly the listing agent is toward you, he does not represent your interests in any way. And under NY real estate law, sellers don't have a lot of obligation to disclose things to the buyer -- it's pretty much "buyer beware." So just think about it before you make your decision!

Re: Spinoff to my own 'New Construction' Thread & WWYD?

Hi! Thank you for your response…here are a few items to clarify:

Message edited 5/16/2011 9:58:02 PM.

Re: Spinoff to my own 'New Construction' Thread & WWYD?

OK - Now that you clarified, I think that your agent was foolish to let you make the contact with the builder/listing agent, knowing that there was at least a chance that he could be cut out of the deal, should you choose to buy a house from the builder. Also, if he is working with you, then he should be doing this type of legwork for you, imo. Real estate is all about providing a good level of service to get repeat business and referrals, so not sure why your agent would decline to make a few phone calls/inquiries on your behalf.

I still think you ought to be careful when dealing with the builder and independently verify as much info as possible before you buy. Given that you have some real estate connections (friends and family who have experience with new construction), that should help.

I think it's always a good idea to have a buyer's agent, but given that you did not have that type of representation with your agent (I am assuming, because usually an agent who takes on the liability of being a buyer's agent will want you to sign a contract), it's really neither here nor there with you. Your agent -- if you didn't sign on with him to make him your buyer's representative -- would still be ethically obligated to represent the builder's interests and get the most money for the builder. The agent could have been helpful as an intermediary and could have guided you through the process, but he really couldn't have been a true advocate for you -- not in the same way he could be if he was your buyer's rep.

But as far as the commission issue -- you gave your agent the opportunity to be involved, and he declined that opportunity. Under those circumstances, he should not expect to earn a commission!

Good luck! Hope it works out.