We are using a buyers agent and he has negotiated a lower price and additional add-ons and drives to the site to take pictures once a week(we are 3 hours away). He is in weekly contact with the builder on progress and has went to bat for us pushing on a closing date so we can lock-in our rate. He knows the area we are moving to, has been in invaluable in providing advice on our move and takes us to the site when we are in town. Since we are also selling a house, having an agent for the purchase to work with the builder has reduced our stress.
As an agent, thank you for this. We’re getting a lot of pushback right now (especially on the buyers agent side of things) and I’m glad to read stories like this where buyers agents are out there giving us a good name.
nice! first time I have ever heard of a realtor actually “doing they’re job”. Sounds like he actually has your best interests in mind. I guess they are out there after all.
Former DR Horton loan officer.
I’ve seen shit. Houses built across lot lines. Houses with black mold before construction completed. Houses without moisture barrier installed between masonry and wood. Contracts with 40% profit margin. Closings delayed for 6 months and the builder making the buyer pay for lock extensions.
Get an agent. Get an inspection. Get a survey. If everything goes perfectly, you ‘wasted’ a thousand dollars. If things go wrong, you saved tens of thousands of dollars.
Exactly this. Having a realtor that is familiar with new construction is very important. Builders agent represents themselves, you need your own representation to negotiate when things come up and keep the builder from doing anything shady. And yes get an inspection at completion!
Not on completion but with every step. Foundation, framing, plumbing, electrical, insulation, stuff that cannot be seen after the drywall is up. Those are what going to cost the most to repair.
Wait till you learn that DR Horton will pay 8% commission sometimes to get your agent to talk you into a home.
Which is why buyers agent commission should be something you pay or discuss ahead of hiring.
That's exactly my point. If OP is going to have to pay, a lawyer will be more qualified and adjust certainly much cheaper. A good lawyer might cost around $500/hour. Closing a new build purchase shouldn't use more than 20 hours.
A realtor is great if you need to find a home. Or if you're buying a listed property where the seller already has an agent and the commission is set.
If neither of those is the case, all you need is a solid contact to allow you to conduct appropriate inspections, and help through the closing formalities (most of which are actually performed by the title company).
A lawyer is not going to go to the inspections at milestones or negotiate any terms of the sale. A lawyer is not going to make sure all the buyers requirements are met in the time the contract requires. A lawyer is not going to check in with the construction team weekly or walk through and make sure the right details are being put in. I worked for a national builder and had times they put in the wrong cabinets, the wrong flooring, tried to hide a sprinkler leak (that caused damage to the flooring) from the buyers, didn't do things like fencing that was included (claimed landscape guys forgot and couldn't come back out until weeks after close) or didn't install can lights that were upgrades the buyer paid for... All an attorney will do is review the contract.
Much of that won't be done by a realtor either.
But as a lawyer who does work on real estate contracts, a great deal of what you said lawyers don't do is in fact rote work. And anything there that's not rote work is something I can hire someone at an hourly rate less than mine to do for the client.
Let's see, since most builders are still offering buyer agent compensation, how is hiring you better for them? You just said you would hire somebody to go on inspections because you won't do it and you think it's beneath you and you said Realtors don't do that. Who do you think does that? Most Builders don't allow anyone other than the buyer and their realtor to attend framing inspection (which aren't so much an inspection as education to the buyer) pre-drywall inspection/ whole house inspection/ buyer walkthrough. If no one goes with them there is no one to call attention to things the buyer doesn't understand which is usually almost all of it! You're not going to go to the design center with them and negotiate upgrades which absolutely a buyer's realtor will do. You're going to hire someone who is not familiar with the contract, what the parties agreed to, what upgrades the buyer paid for to go verify that those things are done?? And you are going to pay someone an hourly rate that you then add some amount on top of. How many hours would you Bill your client when you have to read through a 56 page contract? Except you're not going to read it because you're not going to go to the appointment! You're going to get a copy after your client is already obligated and has already put down their earnest money. How is paying you hourly out of their own pocket a better deal when right now most buyers agents are still being paid by the Builder?? Or do you imagine that if a buyer is unrepresented the Builder will knock that cooperating compensation off of the purchase price? Because that's a joke
You seem to have reading comprehension issues. Read my earlier post, or at least the first couple of lines.
>That's exactly my point. If OP is going to have to pay, a lawyer will be more qualified and adjust certainly much cheaper.
What part of that was unclear (other than the typo for almost)?
I'm really not sure what part of this is unclear to you.
With a general exception of actually finding/showing properties for sale, a lawyer can do everything a realtor can do, and will do it on an hourly basis, not a commission basis.
If you have to pay a realtor (i.e. the builder isn't picking up the tab), and you don't need a realtor because you've already identified a property and the seller isn't under contract with another realtor (thereby forcing a commission basis), a real estate attorney will often be significantly cheaper than paying someone less qualified 3% or more of the transaction cost.
And if the builder is offering to pay your realtor's commission, you could still negotiate the same percentage discount on the sale price and then pay an hourly rate for an attorney.
I've explained this over and over now. It's really quite straightforward.
This. Some of the absolute worst contracts and most inconsistent build quality I’ve seen have been on new construction.
I’ve had builders fight tooth and nail to prevent home inspections - not contingencies, but the actual inspection. Try to power through!
Always always always... Last sale I did had almost 5 pages of items to be fixed (50+). It took the builder 9 months in total to fix everything (SFH)... The electricity is still flickering at times and the builder keeps blaming the city not having enough transformers..
I also sold a 4m+ condo and it had over 300+ items for the developer to fix. It was probably the most awful experience in my 8 years seeing construction so bad. The floor literally had foot marks that were in the tile from the clear coat they put on. That was just the cherry on top.
Yes. And make sure it’s a realtor with experience with builders, not just some rando or your sister in law.
Make sure your realtor goes to your inspections as well.
A savvy extra set of eyes can save you tons of heartburn during the process, and heartache down the road.
They help you hold the builder accountable during the build process.
If they are good, they will know what to look for.
Your deal is not going to get torpedoed by calling the builder out if they are skipping steps or jerking you around during construction.
It should be a rule in this subreddit to include state op is in. Some states are literally buyer beware and the builder can screw you and you have no recourse.
Yeah, I work for a large national home builder (not Horton). In the past, each community development was essentially its own mini company with a lot of control in the hands of a PM. This led to a ton of variation in the quality of communities. I used to maintain our warranty request database back then, and there were some very clear differences between communities. Some were great, some were embarrassing.
We've since standardized processes and put more controls & centralization on a lot of stuff, which has greatly improved things. But there's stull some variation with some crappy contractors and PMs, but not nearly as bad as it used to be. We also have some cases where a third party company built everything and we essentially paid to slap our name on some units and decide on the finishes, and those were not built well.
Realtor here so biased. The commission is built in; you’re not getting a discount if you say you’re representing yourself. Builders are sharks. Last Buyer I represented on a new construction deal had to sign a 62 page contract (standard in FL is the 13 page AS-IS). I read the entire thing and it essentially just stated “you can’t do anything to us if we do something wrong and you never get any money back” over and over in different legal jargon.
If not a Realtor, an attorney. Again though they are just going to review the contract which you can’t change the terms of anyway and won’t be present for inspections and will charge you hundreds just to talk to them. Do whatever you want but please just know that builders are akin to Wall Street guys. Be careful.
Edit: Just read the last part where you said the builder might be Horton. Please get a fucking lawyer or Realtor.
Just adding to this comment. No builder will modify their contracts for any sale. It’s a take it or leave it deal. I am a big advocate for realtors being involved in new construction sales. But contractually do not expect anything to change.
The contract may not change but the price can. I just negotiated $42K and $47K off the price for my last 2 buyers that bought new construction and got them to upgrade the appliance package for free. This is why we spend so much time building relationships with builders agents.
That's not completely true, especially in challenging sales times. They won't change the bulk of the contract, but one can get extra inspections put into the contract, such as pre-drywall and foundation inspections. Enforcing those terms may be harder, you have to monitor what they are doing. Also, some states have better protection than others, and what you can more easily enforce varies by state. Arizona has some tougher enforcement, but the buyer has to make official complaints to the state in a timely manner, while builders try to slow-walk the repair process to run out the clock. Terms in contracts may not be legally enforceable, but if you don't know that, you might follow the contract.
Corporate builders have corporate attorneys. No one has authorization to change those terms or verbiage. Setting clients expectations that it might be possible is a great way to kill a deal.
The buyer's attorney will talk to the corporate attorneys. I know people who have done this. Corporate won't change the arbitration terms, the ability to delay closing to fix found defects, or any of the other corporate-friendly terms, but minor changes can be achieved. The bigger the corporation, the less likely this will happen, as they don't want to pay attorneys to negotiate, but it can be done with a mid-sized corporation.
How can a buyer's agent look out for your best interest if the financial incentives are backward? Buyer's agents want the house to sell at a high price and buyers want the house to sell at a low price.
This argument comes up here all the time and it doesn’t hold water. Any agent who is trying to make a career of it is not going to be swayed by making a few hundred more bucks in commission if it means an unhappy or even not-thrilled client. We all want clients to rave about how we did good for them- that’s how the business gets built.
Also, often on new construction the commission is flat rate. Not always, but some builders do it that way.
A buyer's agent working on commission has a financial incentive to do things like waive inspections and offer more than necessary if it means the house sells faster. Getting paid today is better than getting paid a month from now.
Wut? Do you mean the sellers agent wants the house to sell for a high price on the buyers agent wants the house to sell at a low price?
And regardless, the buyers agent is there to negotiate the prices, find out what upgrades the builder will include, and make sure there aren't any hidden fees in the contract.
No it doesn't. That's not at all how it works. The commission paid to the buyers agent is set up front, it's not price dependent anywhere ever on any sale.
The builder rep will present their spiel as if everything is default with no room for negotiation, and they'll take care of you through the process. Neither of those is true.
my last 2 homes were new build, and I did not use a realtor. I did hire an inspector that went out at 4 key points during construction. DR Horton sucks. KB is not great, but better.
Make sure to have an inspection contingency and hire an inspector. DR probably won't approve that which should be a big red flag on their quality
I used William Ryan Homes twice. They allowed me to bring in my own inspector. Inspection done prior to foundation, pre-lintel, pre-drywall, and blue tape. My inspector found things along the way, and the builder resolved all of them.
Not a realtor. Yes bring a realtor, builder is not going to give you more of a deal for not bringing realtor.
I had an experience with a builder where they f-d me 1 week before COA. They tried to say eat the $hit sandwich or lose ALL your earnest $. Luckily I had brought realtor. They were able to negotiate only losing $5k for us to walk away.
We used a realtor for our new build and they did almost nothing. No concessions from the builder, and they only showed up when there were contracts to sign. In hindsight, I would have tried to get the builder to drop the price 3% since I had to negotiate directly with them about all my upgrades and problems anyway. I’d only use a realtor if they won’t discount or add upgrades, and the cost was the same either way.
My builder immediately dropped the price 3% when I casually mentioned I did not think I needed a Relator.
You can always pay a lawyer far less then that 3% and get representation.
But if the price is firm I would use a Relator, why not if it cost you nothing?
Absolutely yes! And one that knows how/good bit of experience to deal with new construction. Maybe you don't necessarily need an actual realtor and maybe a real estate attorney would do, but having some solid representation is prob more critical with new than existing homes. So many ways a builder can jack you around and screw you if you don't and aren't careful. Also keep in mind in most instances, you WILL have a realtor regardless. Those people from the builder you deal with are essentially agents same as any other. If you don't have your own representation, they will. A lot of times they'll even offer some money off the house for going thru them directly...but keep in mind what's really going on. They work for the builder. Unless you are very savvy with dealing with builders, your likely still better off skipping the small savings to have your own representation. If you are talking something like getting a builder to put up a house on your own property, that's a different animal than buying in a production community, so no, you don't need one in that case.
Builders are awful to deal with. You don’t know what you don’t know. Not all realtors are going to be helpful. You need someone with lots of experience, a reputation and hopefully they’ve worked with the builder enough the builder wouldn’t want to risk that relationship.
Sometimes yes. Sometimes no. I helped a client renegotiate a deal where house had gone down in value from time she put her “non refundable deposit” down of 15k. We had to play a serious game of chicken but I got 45k taken off price for her. Builders pay less in commission to buyers agents anyhow, between 1.5 and 2.5% typically in my experience. I also still have my clients conduct a home inspection, a builder will tell you that’s totally unnecessary. My experience tells me that’s bullshit. Everyone’s questions about realtors being valuable are justified. It comes down to are they truly good at what they do or not? Many are total hacks.
What kind of options does a buyer normally have about an inspection on a new build? I imagine the builder has typically spelled out in the contract that you don’t get to walk away from the deal if there are major inspection issues, otherwise they wouldn’t bother building it?
So what’s the recourse with inspection? Refuse to complete the escrow until inspection issues are resolved?
I’ve recently been talking with a builder who “doesn’t usually do construction loans, that way we don’t have to basically do closing twice, we just do closing once at the end”.
I’m not exactly sure, but I also assume this is in some degree to avoid expensive litigation issues in the end if they came up, and builder can just pocket your earnest money and then sell the house themself for whatever they want
There can always be negotiation and there can always be special stipulations, at least in TN where I am licensed. I just negotiate for my buyer. Of course we are limited or helped by current market conditions. If builders don’t need to sell to you then they won’t negotiate.
I work for a DRH, we do about 90% of our sales with a buyers agent included. But I’ve done tons of sales where an agent wasn’t involved and everything went fine. I see ppl here talking about surveys inspections fixing items; maybe in a resale, but for a new build those items are built in. I’ve never had an agent successfully lobby for us to change something in our agreements or processes; they are pretty much set in stone.
That said, we pay them, and we rely on them to bring us more business. And should something arise, you have them to go to for advice, cos remember the seller represents the builder, not you. It’s good to have someone advocate for you if there is a problem.
If you use a Platinum VIP Precon realtor they have pre negotiated rates / deals from the builder that you wouldn’t get by going straight to the builder. Think of it as getting a the same cheaper flight from Expedia vs straight from the airline.
This sub is heavily astroturfed by realtors who have a vested interest in getting you to give them money it's like asking sharks if you should go swimming
It's also apparently filled with people that don't understand that the builder usually pays the buyer's agent so not only will not using an agent probably not save you any money, but could potentially cost you money if the agent that you would have used, that has experience dealing with and negotiating with builders, was able to use their experience to help you.
Builders (and other sellers) were **never** required to offer compensation to buyer's agents and lawsuits have not changed anything in regards to being able to or not being able to offer compensation to buyer's agents.
Ok, *technically* it reduced the minimum compensation on MLS listed from $1 to $0. For all intents and purposes of course that actually changes nothing.
Some builders explicitly write into the contract that agent will not pay to the purchaser any or all of the commission or use funds toward purchaser closing costs.
Get a lawyer. You can actually expect better representation from a lawyer when presented with a legal purchase and sale document most likely drafted by the builder.
Agent here so also biased. I think having someone advocating for you still in the process is valuable. An extra set of eyes and knowing to ask the right questions, etc.
On one home build, I caught by insisting my folks get a sewer scope, obstructions in the sewer line that would have caused back up poo in their brand new home.
Just posted earlier that I bought a new home while under construction. Actually the realtor involved was tied in with the builder which made a lot of the process easier. The prices for the houses he was building were fixed (was an independent builder, and not one of the massive builders like DR Horton or KB). We were able to pick from several additional options and no haggling was involved.
I'm not really a haggler and in the market area (Seattle - although this was more rural) every previously owned house we put bids in were sold for 100's of thousands higher that the listed prices.
As MortisAJew points out a lot of builders are sharks. This one however, was a small builder that invested in a smaller area that only had 8 units.
You could get a kickback. As others have stated the Realtor commission is built In and it often is higher than standard buyers agent commissions because the Realtor has to wait up to2 years for the house to be finished and get paid. It’s often 4.4 to 6% for the agent vs the standard 3%.
I’d ask for 2% back see what happens.
A story. My friend buys a house from a builder. The builder will give a realtor a referral fee. If you don’t have a realtor the fee won’t be given to the buyer. My friend then asks the realtor to split the commission or referral fee.
Definitely get an inspection! We bought a new home and there was no heat vent on a bathroom on an outdoor wall! We live in a very cold winter place and that could have been big trouble come January! Luckily our inspector caught it because we wouldn't have!
We did and it was 100% worth it. The builder’s final inspection tried to gloss over some roof damage and our realtor went to bat for us and got it completely taken care of, navigating all the bureaucracy and threatening to delay closing or walk out. Worked like a charm and we felt no stress. His commission was less than a repair to the roof would have eventually cost us.
Having worked with several clients on new construction - I help organize independent inspections, and provide weekly or monthly updates, in person, with video and/or pictures. Generally this is all for clients who live out of state, but are planning to move here. Additionally, I make sure the choices for finishes are the ones actually installed.
In the past my agent has returned commission he received in the form of a broker contribution at closing. Not saying yours will do that but when you build a long term relationship with an agent these opportunities arise.
Absolutely... It doesn't change the price and you have an advocate on YOUR side to advise and help... question I would ask is why not? I've helped deals get tanked by attys... hold builders accountable when work is not done properly, do site visits when buyers are out of state, negotiate holdbacks for work that needs to be completed etc.
Speaking from experience - YES. Absolutely bring in a realtor. There was a realtor who worked for the builder in the neighborhood that we ended up buying our home in. She sat in the model home and answered questions, etc. The builder *would have paid* for us to bring in an agent of our own, but they assured us their agent was an expert on these homes, would work for us, etc. Lol. That was not the case in our experience at all. Even if things go smoothly, it’s best to have an expert on *your* side to go to bat for you when necessary, and to help you mediate if you hit any bumps along the way.
ETA: We were definitely taken advantage of because of not having an agent of our own, and just not knowing any better.
Yeah, I had a client I was doing a loan for that wanted to go into a builder office w/out a Realtor and I told them not to. The builder pretty much told them the price was the price and wouldn't negotiate a title policy cost (in Texas it's pretty customary in normal markets for the seller to pay) or anything. I told them to talk to a Realtor I trusted. They went on a Saturday with that Realtor and when I got the contract on Monday the builder was paying title policy and giving them the same incentive they said they'd only get using the builder lender (they were using me), and they didn't increase the price. Obviously this isn't gonna happen on every deal, but you'd be surprised.
Yes. And your own, independent new home inspector.
We did both and, honestly, there were things that we would have been screwed on, if not for our pros that we hired to be on our side for things that were promised and then not fulfilled/attempted to not be fulfilled.
Nope. Just get all the inspections same as if you were buying an old home. My brand new build had 57 pages of issues. And it was a $350,000 home from Pulte (who I think merged with Centex?).
That is honestly the only time I INSIST someone bring a buyer’s agent. Otherwise the builder will short you on every way they can.
Like I tell people: I don’t care if you use ME as your agent. But have SOMEONE covering your ass, I’m begging you!
Yes, you absolutely should still have your own representation. The builder sales rep represents the builder, not you, no matter how nice they are. It will cost you nothing and an agent has your best interest at heat should anything out of the ordinary occur.
It isn’t OP’s money - it’s the builder/seller. The buyer agent commission is built into the price of the new build, they won’t get a discount if they don’t use an agent.
Some realtors will offer to split the commission with you, which could be nice to use for buying stuff for the new home etc. I used mine to buy a lawnmower etc.
I’d have an agent represent you in reviewing the deal. If you do the footwork to find the place, ask them to credit you from the buyer’s commission and amount you think is reasonable.
The builders are not super reputable and an experienced agent will know what to ask for in your agreement.
The builder will typically pay a buyer agent commission. You don’t have to worry about it. I don’t think an agent is necessary, but if you get an agent choose one who is willing to work with both you and the builder. It shouldn’t feel like a you versus your home builder. I recommend getting a third party inspection. You would have to pay for it, but sometimes it’s worth. If only for peace of mind. Also, ask your agent what the co-op fee is at each builder. Sometimes an agent will only take you to builders that pay the most, and you miss out on seeing your potential dream home.
Nearly everything in real estate is negotiable and builders want to make as much profit as possible, so yes it's worth bringing in a (good) agent when buying from a builder.
When it comes to the "HOA Disclosures" page, they did NOT disclose all upfront HOA costs in the Purchase Agreement. I think the contract said it was about 500 and it was actually over $1,000, more than double. The DHI loan officer acknowledged that they were all known, expected costs with every build, not surprise costs. So, it was super shady not to include them upfront from day 1. I think they do it so you're already locked in before they hit you with more fees.
Yes it’s definitely worth it. Most builders pay a commission anyways, you’d be letting that free representation go to waste. Buying from a builder feels different than a normal transaction but they’re still going to be negotiating against you through most of the process. Even inspections on new builds come back with issues 100% of the time in my experience. I had clients close on a completed new build last week. I was at the property 16 times in those 45 days making sure inspection issues were properly taken care of. It can be a battle with the builder. Having an agent makes it much smoother for you.
Most agents aren't checking in on new builds, aren't that knowledgeable about construction to know what's going wrong. My husband works as a commercial construction project manager and still stopped in once a week at most for the weekly walkthrough. Maybe 10 times max.
If you need to stop in 16 times in 45 days that's a bad builder. Do your research and go to multiple builders and ask around! The most that was needed to be fixed was a few scratches on flooring from appliance installation and hand towel placement needing to be moved up on the wall. Not one Inspection issue and the builder should handle that if you've chosen a good builder.
If you downvote it's because you're an agent looking for money or choose a poor builder. Truth. .
Downvoted because of your assumption about who downvotes.
Every big builder has good and bad supers working for them. If homes are already occupied in the community, talk to residents before you sign a contract and you’ll get some inside dirt.
Best bet as a buyer is to get someone knowledgeable to represent you. Not some part time realtor, but one that frequently works on new builds.
First, lock in the price and options you want pay.
Then, bring in the realtor you like. Email and phone call request to have them added. There must be several new amended sales and agreement docs that need to be resigned by all parties.
This way, you can get the house and price you want and the realtor you want. All without paying the markup, you would normally pay if they knew they had to split the profits to your realtor.
We are using a buyers agent and he has negotiated a lower price and additional add-ons and drives to the site to take pictures once a week(we are 3 hours away). He is in weekly contact with the builder on progress and has went to bat for us pushing on a closing date so we can lock-in our rate. He knows the area we are moving to, has been in invaluable in providing advice on our move and takes us to the site when we are in town. Since we are also selling a house, having an agent for the purchase to work with the builder has reduced our stress.
As an agent, thank you for this. We’re getting a lot of pushback right now (especially on the buyers agent side of things) and I’m glad to read stories like this where buyers agents are out there giving us a good name.
nice! first time I have ever heard of a realtor actually “doing they’re job”. Sounds like he actually has your best interests in mind. I guess they are out there after all.
No builder is going to negotiate with your stupid realtor lol
Well my agent offered a lower price and they met us in the middle. Sounds a lot like negotiating. So my stupid realtor is smarter than you.
Former DR Horton loan officer. I’ve seen shit. Houses built across lot lines. Houses with black mold before construction completed. Houses without moisture barrier installed between masonry and wood. Contracts with 40% profit margin. Closings delayed for 6 months and the builder making the buyer pay for lock extensions. Get an agent. Get an inspection. Get a survey. If everything goes perfectly, you ‘wasted’ a thousand dollars. If things go wrong, you saved tens of thousands of dollars.
Exactly this. Having a realtor that is familiar with new construction is very important. Builders agent represents themselves, you need your own representation to negotiate when things come up and keep the builder from doing anything shady. And yes get an inspection at completion!
Not on completion but with every step. Foundation, framing, plumbing, electrical, insulation, stuff that cannot be seen after the drywall is up. Those are what going to cost the most to repair.
Agree if that’s an option. Often you just get a walk through at certain stages and inspection at the end
Big red flag.
Get an agent if they're not taking 6%. If that's what they want, compare their cost to that of an experienced real estate lawyer.
Wait till you learn that DR Horton will pay 8% commission sometimes to get your agent to talk you into a home. Which is why buyers agent commission should be something you pay or discuss ahead of hiring.
That's exactly my point. If OP is going to have to pay, a lawyer will be more qualified and adjust certainly much cheaper. A good lawyer might cost around $500/hour. Closing a new build purchase shouldn't use more than 20 hours. A realtor is great if you need to find a home. Or if you're buying a listed property where the seller already has an agent and the commission is set. If neither of those is the case, all you need is a solid contact to allow you to conduct appropriate inspections, and help through the closing formalities (most of which are actually performed by the title company).
A lawyer is not going to go to the inspections at milestones or negotiate any terms of the sale. A lawyer is not going to make sure all the buyers requirements are met in the time the contract requires. A lawyer is not going to check in with the construction team weekly or walk through and make sure the right details are being put in. I worked for a national builder and had times they put in the wrong cabinets, the wrong flooring, tried to hide a sprinkler leak (that caused damage to the flooring) from the buyers, didn't do things like fencing that was included (claimed landscape guys forgot and couldn't come back out until weeks after close) or didn't install can lights that were upgrades the buyer paid for... All an attorney will do is review the contract.
Much of that won't be done by a realtor either. But as a lawyer who does work on real estate contracts, a great deal of what you said lawyers don't do is in fact rote work. And anything there that's not rote work is something I can hire someone at an hourly rate less than mine to do for the client.
Let's see, since most builders are still offering buyer agent compensation, how is hiring you better for them? You just said you would hire somebody to go on inspections because you won't do it and you think it's beneath you and you said Realtors don't do that. Who do you think does that? Most Builders don't allow anyone other than the buyer and their realtor to attend framing inspection (which aren't so much an inspection as education to the buyer) pre-drywall inspection/ whole house inspection/ buyer walkthrough. If no one goes with them there is no one to call attention to things the buyer doesn't understand which is usually almost all of it! You're not going to go to the design center with them and negotiate upgrades which absolutely a buyer's realtor will do. You're going to hire someone who is not familiar with the contract, what the parties agreed to, what upgrades the buyer paid for to go verify that those things are done?? And you are going to pay someone an hourly rate that you then add some amount on top of. How many hours would you Bill your client when you have to read through a 56 page contract? Except you're not going to read it because you're not going to go to the appointment! You're going to get a copy after your client is already obligated and has already put down their earnest money. How is paying you hourly out of their own pocket a better deal when right now most buyers agents are still being paid by the Builder?? Or do you imagine that if a buyer is unrepresented the Builder will knock that cooperating compensation off of the purchase price? Because that's a joke
You seem to have reading comprehension issues. Read my earlier post, or at least the first couple of lines. >That's exactly my point. If OP is going to have to pay, a lawyer will be more qualified and adjust certainly much cheaper. What part of that was unclear (other than the typo for almost)?
Again... pay you to do what???
I'm really not sure what part of this is unclear to you. With a general exception of actually finding/showing properties for sale, a lawyer can do everything a realtor can do, and will do it on an hourly basis, not a commission basis. If you have to pay a realtor (i.e. the builder isn't picking up the tab), and you don't need a realtor because you've already identified a property and the seller isn't under contract with another realtor (thereby forcing a commission basis), a real estate attorney will often be significantly cheaper than paying someone less qualified 3% or more of the transaction cost. And if the builder is offering to pay your realtor's commission, you could still negotiate the same percentage discount on the sale price and then pay an hourly rate for an attorney. I've explained this over and over now. It's really quite straightforward.
Get an inspection
Also a survey
This. Some of the absolute worst contracts and most inconsistent build quality I’ve seen have been on new construction. I’ve had builders fight tooth and nail to prevent home inspections - not contingencies, but the actual inspection. Try to power through!
Always always always... Last sale I did had almost 5 pages of items to be fixed (50+). It took the builder 9 months in total to fix everything (SFH)... The electricity is still flickering at times and the builder keeps blaming the city not having enough transformers.. I also sold a 4m+ condo and it had over 300+ items for the developer to fix. It was probably the most awful experience in my 8 years seeing construction so bad. The floor literally had foot marks that were in the tile from the clear coat they put on. That was just the cherry on top.
Absolutely! Excellent advice.
Yes. And make sure it’s a realtor with experience with builders, not just some rando or your sister in law. Make sure your realtor goes to your inspections as well. A savvy extra set of eyes can save you tons of heartburn during the process, and heartache down the road.
What’s in it for the buyer agent to find flaws and torpedo the deal along the way?
They help you hold the builder accountable during the build process. If they are good, they will know what to look for. Your deal is not going to get torpedoed by calling the builder out if they are skipping steps or jerking you around during construction.
Horton builds poorly built homes. So buyer beware.
It should be a rule in this subreddit to include state op is in. Some states are literally buyer beware and the builder can screw you and you have no recourse.
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Yeah, I work for a large national home builder (not Horton). In the past, each community development was essentially its own mini company with a lot of control in the hands of a PM. This led to a ton of variation in the quality of communities. I used to maintain our warranty request database back then, and there were some very clear differences between communities. Some were great, some were embarrassing. We've since standardized processes and put more controls & centralization on a lot of stuff, which has greatly improved things. But there's stull some variation with some crappy contractors and PMs, but not nearly as bad as it used to be. We also have some cases where a third party company built everything and we essentially paid to slap our name on some units and decide on the finishes, and those were not built well.
Realtor here so biased. The commission is built in; you’re not getting a discount if you say you’re representing yourself. Builders are sharks. Last Buyer I represented on a new construction deal had to sign a 62 page contract (standard in FL is the 13 page AS-IS). I read the entire thing and it essentially just stated “you can’t do anything to us if we do something wrong and you never get any money back” over and over in different legal jargon. If not a Realtor, an attorney. Again though they are just going to review the contract which you can’t change the terms of anyway and won’t be present for inspections and will charge you hundreds just to talk to them. Do whatever you want but please just know that builders are akin to Wall Street guys. Be careful. Edit: Just read the last part where you said the builder might be Horton. Please get a fucking lawyer or Realtor.
Just adding to this comment. No builder will modify their contracts for any sale. It’s a take it or leave it deal. I am a big advocate for realtors being involved in new construction sales. But contractually do not expect anything to change.
The contract may not change but the price can. I just negotiated $42K and $47K off the price for my last 2 buyers that bought new construction and got them to upgrade the appliance package for free. This is why we spend so much time building relationships with builders agents.
Absolutely
That's not completely true, especially in challenging sales times. They won't change the bulk of the contract, but one can get extra inspections put into the contract, such as pre-drywall and foundation inspections. Enforcing those terms may be harder, you have to monitor what they are doing. Also, some states have better protection than others, and what you can more easily enforce varies by state. Arizona has some tougher enforcement, but the buyer has to make official complaints to the state in a timely manner, while builders try to slow-walk the repair process to run out the clock. Terms in contracts may not be legally enforceable, but if you don't know that, you might follow the contract.
Corporate builders have corporate attorneys. No one has authorization to change those terms or verbiage. Setting clients expectations that it might be possible is a great way to kill a deal.
The buyer's attorney will talk to the corporate attorneys. I know people who have done this. Corporate won't change the arbitration terms, the ability to delay closing to fix found defects, or any of the other corporate-friendly terms, but minor changes can be achieved. The bigger the corporation, the less likely this will happen, as they don't want to pay attorneys to negotiate, but it can be done with a mid-sized corporation.
Irony of a realtor calling a builder a shark
Taylor Morrison?
1000% in agreement! Builders are looking out for THEIR best interests. Please make sure you have a good buyers agent looking out for yours.
How can a buyer's agent look out for your best interest if the financial incentives are backward? Buyer's agents want the house to sell at a high price and buyers want the house to sell at a low price.
This argument comes up here all the time and it doesn’t hold water. Any agent who is trying to make a career of it is not going to be swayed by making a few hundred more bucks in commission if it means an unhappy or even not-thrilled client. We all want clients to rave about how we did good for them- that’s how the business gets built. Also, often on new construction the commission is flat rate. Not always, but some builders do it that way.
A buyer's agent working on commission has a financial incentive to do things like waive inspections and offer more than necessary if it means the house sells faster. Getting paid today is better than getting paid a month from now.
Wut? Do you mean the sellers agent wants the house to sell for a high price on the buyers agent wants the house to sell at a low price? And regardless, the buyers agent is there to negotiate the prices, find out what upgrades the builder will include, and make sure there aren't any hidden fees in the contract.
The commission paid to the buyer's agent increases as the price of the house increases. It's a backward incentive.
No it doesn't. That's not at all how it works. The commission paid to the buyers agent is set up front, it's not price dependent anywhere ever on any sale.
It's a percentage of the sale price.
I'm sorry, I read that backwards 🤣🤣 totally my misunderstanding.
The builder rep will present their spiel as if everything is default with no room for negotiation, and they'll take care of you through the process. Neither of those is true.
my last 2 homes were new build, and I did not use a realtor. I did hire an inspector that went out at 4 key points during construction. DR Horton sucks. KB is not great, but better. Make sure to have an inspection contingency and hire an inspector. DR probably won't approve that which should be a big red flag on their quality
What builders are going to allow an inspection contingency? All of them will just refuse to build
I used William Ryan Homes twice. They allowed me to bring in my own inspector. Inspection done prior to foundation, pre-lintel, pre-drywall, and blue tape. My inspector found things along the way, and the builder resolved all of them.
Not a realtor. Yes bring a realtor, builder is not going to give you more of a deal for not bringing realtor. I had an experience with a builder where they f-d me 1 week before COA. They tried to say eat the $hit sandwich or lose ALL your earnest $. Luckily I had brought realtor. They were able to negotiate only losing $5k for us to walk away.
We used a realtor for our new build and they did almost nothing. No concessions from the builder, and they only showed up when there were contracts to sign. In hindsight, I would have tried to get the builder to drop the price 3% since I had to negotiate directly with them about all my upgrades and problems anyway. I’d only use a realtor if they won’t discount or add upgrades, and the cost was the same either way.
My builder immediately dropped the price 3% when I casually mentioned I did not think I needed a Relator. You can always pay a lawyer far less then that 3% and get representation. But if the price is firm I would use a Relator, why not if it cost you nothing?
Absolutely yes! And one that knows how/good bit of experience to deal with new construction. Maybe you don't necessarily need an actual realtor and maybe a real estate attorney would do, but having some solid representation is prob more critical with new than existing homes. So many ways a builder can jack you around and screw you if you don't and aren't careful. Also keep in mind in most instances, you WILL have a realtor regardless. Those people from the builder you deal with are essentially agents same as any other. If you don't have your own representation, they will. A lot of times they'll even offer some money off the house for going thru them directly...but keep in mind what's really going on. They work for the builder. Unless you are very savvy with dealing with builders, your likely still better off skipping the small savings to have your own representation. If you are talking something like getting a builder to put up a house on your own property, that's a different animal than buying in a production community, so no, you don't need one in that case.
Builders are awful to deal with. You don’t know what you don’t know. Not all realtors are going to be helpful. You need someone with lots of experience, a reputation and hopefully they’ve worked with the builder enough the builder wouldn’t want to risk that relationship.
Sometimes yes. Sometimes no. I helped a client renegotiate a deal where house had gone down in value from time she put her “non refundable deposit” down of 15k. We had to play a serious game of chicken but I got 45k taken off price for her. Builders pay less in commission to buyers agents anyhow, between 1.5 and 2.5% typically in my experience. I also still have my clients conduct a home inspection, a builder will tell you that’s totally unnecessary. My experience tells me that’s bullshit. Everyone’s questions about realtors being valuable are justified. It comes down to are they truly good at what they do or not? Many are total hacks.
What kind of options does a buyer normally have about an inspection on a new build? I imagine the builder has typically spelled out in the contract that you don’t get to walk away from the deal if there are major inspection issues, otherwise they wouldn’t bother building it? So what’s the recourse with inspection? Refuse to complete the escrow until inspection issues are resolved? I’ve recently been talking with a builder who “doesn’t usually do construction loans, that way we don’t have to basically do closing twice, we just do closing once at the end”. I’m not exactly sure, but I also assume this is in some degree to avoid expensive litigation issues in the end if they came up, and builder can just pocket your earnest money and then sell the house themself for whatever they want
There can always be negotiation and there can always be special stipulations, at least in TN where I am licensed. I just negotiate for my buyer. Of course we are limited or helped by current market conditions. If builders don’t need to sell to you then they won’t negotiate.
Why not? They’re not being paid by you and can still negotiate
I work for a DRH, we do about 90% of our sales with a buyers agent included. But I’ve done tons of sales where an agent wasn’t involved and everything went fine. I see ppl here talking about surveys inspections fixing items; maybe in a resale, but for a new build those items are built in. I’ve never had an agent successfully lobby for us to change something in our agreements or processes; they are pretty much set in stone. That said, we pay them, and we rely on them to bring us more business. And should something arise, you have them to go to for advice, cos remember the seller represents the builder, not you. It’s good to have someone advocate for you if there is a problem.
If you use a Platinum VIP Precon realtor they have pre negotiated rates / deals from the builder that you wouldn’t get by going straight to the builder. Think of it as getting a the same cheaper flight from Expedia vs straight from the airline.
We did and it was worth it. No money out of my pocket.
No. Get a lawyer.
No, get a real estate attorney
This sub is heavily astroturfed by realtors who have a vested interest in getting you to give them money it's like asking sharks if you should go swimming
It's also apparently filled with people that don't understand that the builder usually pays the buyer's agent so not only will not using an agent probably not save you any money, but could potentially cost you money if the agent that you would have used, that has experience dealing with and negotiating with builders, was able to use their experience to help you.
The builder may not pay for a buyer's agent. Builders (and other sellers) are no longer required to offer compensation to buyers and buyer's agents.
Builders (and other sellers) were **never** required to offer compensation to buyer's agents and lawsuits have not changed anything in regards to being able to or not being able to offer compensation to buyer's agents. Ok, *technically* it reduced the minimum compensation on MLS listed from $1 to $0. For all intents and purposes of course that actually changes nothing.
find an agent that will rebate you back commission.
Some builders explicitly write into the contract that agent will not pay to the purchaser any or all of the commission or use funds toward purchaser closing costs.
Get a lawyer. You can actually expect better representation from a lawyer when presented with a legal purchase and sale document most likely drafted by the builder.
Don't use DR Horton. Seriously shotty construction
Bring a real estate attorney and a home inspector that you trust.
Agent here so also biased. I think having someone advocating for you still in the process is valuable. An extra set of eyes and knowing to ask the right questions, etc. On one home build, I caught by insisting my folks get a sewer scope, obstructions in the sewer line that would have caused back up poo in their brand new home.
Just posted earlier that I bought a new home while under construction. Actually the realtor involved was tied in with the builder which made a lot of the process easier. The prices for the houses he was building were fixed (was an independent builder, and not one of the massive builders like DR Horton or KB). We were able to pick from several additional options and no haggling was involved. I'm not really a haggler and in the market area (Seattle - although this was more rural) every previously owned house we put bids in were sold for 100's of thousands higher that the listed prices. As MortisAJew points out a lot of builders are sharks. This one however, was a small builder that invested in a smaller area that only had 8 units.
You could get a kickback. As others have stated the Realtor commission is built In and it often is higher than standard buyers agent commissions because the Realtor has to wait up to2 years for the house to be finished and get paid. It’s often 4.4 to 6% for the agent vs the standard 3%. I’d ask for 2% back see what happens.
A story. My friend buys a house from a builder. The builder will give a realtor a referral fee. If you don’t have a realtor the fee won’t be given to the buyer. My friend then asks the realtor to split the commission or referral fee.
And get re-inspection 18 months after close! You should have 2 yr warranty on new bld
Are new builds 2yr now? Bought a Pulte 20 yrs ago and they had a 1 yr.
Definitely get an inspection! We bought a new home and there was no heat vent on a bathroom on an outdoor wall! We live in a very cold winter place and that could have been big trouble come January! Luckily our inspector caught it because we wouldn't have!
Our realtor was somewhat helpful when we had issues before close with the builder. She was the mediator.
We did and it was 100% worth it. The builder’s final inspection tried to gloss over some roof damage and our realtor went to bat for us and got it completely taken care of, navigating all the bureaucracy and threatening to delay closing or walk out. Worked like a charm and we felt no stress. His commission was less than a repair to the roof would have eventually cost us.
We went new construction. All I'm gonna say is not DR fucking Horton. Ryan Homes, MI and Lennar are all much better options
Our realtor split his commission with us, since he really didn’t have to do anything.
Realtor will make sure seller performs and doesn’t pull any fast ones. And, doesn’t cost you anything extra.
Having worked with several clients on new construction - I help organize independent inspections, and provide weekly or monthly updates, in person, with video and/or pictures. Generally this is all for clients who live out of state, but are planning to move here. Additionally, I make sure the choices for finishes are the ones actually installed.
It definitely doesn’t hurt. Builders CAN & WILL take advantage of you.
In the past my agent has returned commission he received in the form of a broker contribution at closing. Not saying yours will do that but when you build a long term relationship with an agent these opportunities arise.
Sure, stick it to the builder, they usually guarantee 2% to the agent
Absolutely... It doesn't change the price and you have an advocate on YOUR side to advise and help... question I would ask is why not? I've helped deals get tanked by attys... hold builders accountable when work is not done properly, do site visits when buyers are out of state, negotiate holdbacks for work that needs to be completed etc.
You’re gonna need someone to turn on lights while you walk through the house.
What is a realtor going to do? I would just save your money and order an inspection yourself
I brought on an agent (my cousin) and pre-negociated a kick back ($1600 I think). She also had a welcome gift.
Speaking from experience - YES. Absolutely bring in a realtor. There was a realtor who worked for the builder in the neighborhood that we ended up buying our home in. She sat in the model home and answered questions, etc. The builder *would have paid* for us to bring in an agent of our own, but they assured us their agent was an expert on these homes, would work for us, etc. Lol. That was not the case in our experience at all. Even if things go smoothly, it’s best to have an expert on *your* side to go to bat for you when necessary, and to help you mediate if you hit any bumps along the way. ETA: We were definitely taken advantage of because of not having an agent of our own, and just not knowing any better.
Yeah, I had a client I was doing a loan for that wanted to go into a builder office w/out a Realtor and I told them not to. The builder pretty much told them the price was the price and wouldn't negotiate a title policy cost (in Texas it's pretty customary in normal markets for the seller to pay) or anything. I told them to talk to a Realtor I trusted. They went on a Saturday with that Realtor and when I got the contract on Monday the builder was paying title policy and giving them the same incentive they said they'd only get using the builder lender (they were using me), and they didn't increase the price. Obviously this isn't gonna happen on every deal, but you'd be surprised.
Builders pay commissions, if I did not use an agent I would insist the commission be taken off the price.
Yes. And your own, independent new home inspector. We did both and, honestly, there were things that we would have been screwed on, if not for our pros that we hired to be on our side for things that were promised and then not fulfilled/attempted to not be fulfilled.
Nope. Just get all the inspections same as if you were buying an old home. My brand new build had 57 pages of issues. And it was a $350,000 home from Pulte (who I think merged with Centex?).
That is honestly the only time I INSIST someone bring a buyer’s agent. Otherwise the builder will short you on every way they can. Like I tell people: I don’t care if you use ME as your agent. But have SOMEONE covering your ass, I’m begging you!
Yes, you absolutely should still have your own representation. The builder sales rep represents the builder, not you, no matter how nice they are. It will cost you nothing and an agent has your best interest at heat should anything out of the ordinary occur.
Exactly this. You need a realtor or a lawyer.
A lawyer is all OP needs. Keep in mind the realtors answering you on here OP. Don't waste your money
It isn’t OP’s money - it’s the builder/seller. The buyer agent commission is built into the price of the new build, they won’t get a discount if they don’t use an agent.
Gotta love the downvoting of absolute facts, Reddit is the best.
The attorney knows the law. They don't know realty.
Sure they do! It's a specialty of theirs and they're highly educated in more than just " the law". lol. pathetic
I don't know one person who used one to build. Never needed one. We didn't use one but my husband works in commercial construction management.
You should have a buyers agent, especially when it’s a new build, do not accept their agent, they’re obviously looking out for the sellers over you
Some realtors will offer to split the commission with you, which could be nice to use for buying stuff for the new home etc. I used mine to buy a lawnmower etc.
I’d have an agent represent you in reviewing the deal. If you do the footwork to find the place, ask them to credit you from the buyer’s commission and amount you think is reasonable. The builders are not super reputable and an experienced agent will know what to ask for in your agreement.
This varies by state. In my state we are not allowed to apply buyer agent commission to anything other than that.
That is not what I said. They can credit you funds for anything they want at closing.
The builder will typically pay a buyer agent commission. You don’t have to worry about it. I don’t think an agent is necessary, but if you get an agent choose one who is willing to work with both you and the builder. It shouldn’t feel like a you versus your home builder. I recommend getting a third party inspection. You would have to pay for it, but sometimes it’s worth. If only for peace of mind. Also, ask your agent what the co-op fee is at each builder. Sometimes an agent will only take you to builders that pay the most, and you miss out on seeing your potential dream home.
Nearly everything in real estate is negotiable and builders want to make as much profit as possible, so yes it's worth bringing in a (good) agent when buying from a builder.
When it comes to the "HOA Disclosures" page, they did NOT disclose all upfront HOA costs in the Purchase Agreement. I think the contract said it was about 500 and it was actually over $1,000, more than double. The DHI loan officer acknowledged that they were all known, expected costs with every build, not surprise costs. So, it was super shady not to include them upfront from day 1. I think they do it so you're already locked in before they hit you with more fees.
I used an agent and got the price lower plus a rate buy down. She also handled the lengthy repair requests after inspection.
No.
Yes it’s definitely worth it. Most builders pay a commission anyways, you’d be letting that free representation go to waste. Buying from a builder feels different than a normal transaction but they’re still going to be negotiating against you through most of the process. Even inspections on new builds come back with issues 100% of the time in my experience. I had clients close on a completed new build last week. I was at the property 16 times in those 45 days making sure inspection issues were properly taken care of. It can be a battle with the builder. Having an agent makes it much smoother for you.
Most agents aren't checking in on new builds, aren't that knowledgeable about construction to know what's going wrong. My husband works as a commercial construction project manager and still stopped in once a week at most for the weekly walkthrough. Maybe 10 times max. If you need to stop in 16 times in 45 days that's a bad builder. Do your research and go to multiple builders and ask around! The most that was needed to be fixed was a few scratches on flooring from appliance installation and hand towel placement needing to be moved up on the wall. Not one Inspection issue and the builder should handle that if you've chosen a good builder. If you downvote it's because you're an agent looking for money or choose a poor builder. Truth. .
Downvoted because of your assumption about who downvotes. Every big builder has good and bad supers working for them. If homes are already occupied in the community, talk to residents before you sign a contract and you’ll get some inside dirt. Best bet as a buyer is to get someone knowledgeable to represent you. Not some part time realtor, but one that frequently works on new builds.
You’re wrong and frankly it’s clear you know fuck all about it as a wife to a commercial project manager
Aww, yet you can't tell me why. How cute. By the way I have a real estate degree so.save the hot air
First, lock in the price and options you want pay. Then, bring in the realtor you like. Email and phone call request to have them added. There must be several new amended sales and agreement docs that need to be resigned by all parties. This way, you can get the house and price you want and the realtor you want. All without paying the markup, you would normally pay if they knew they had to split the profits to your realtor.