Looks like I will be moving to OKC in a couple of months and was looking a getting a home built by DR Horton. How much wiggle room do they have on these new homes?

Don't know if your set on DR Horton, but I've always thought this guys houses are pretty cool.

www.jeffclickhomes.com

[This message has been edited by BRIANVD04 (edited 8/27/2012 4:28a).]

Depends on what your end-goals are typically......if you're okay with a home that is "inventory" for them then you'll have some leverage because they want to turn the product. If you are talking about building your own from one of their floorplans then you're at the mercy of any "specials" they are running at that time.

FWIW I am near closing on a home in the Austin area with them and was fine with inventory. They had it "on sale" and the price had been dropped a few times since it hadn't sold. They claimed a list of $225,000 or so and it was listed for $203,000. They also pay closing costs, etc etc (saving about $8,000 there). They also equip the home with stainless kitchen appliances (including fridge), washer/dryer, and 2" faux wood blinds throughout the house.

Pretty good deal, but this house fit what my wife and I were looking for so we lucked in to it.

Rule of thumb with production builders (because i worked for one and was in charge of sales and construction for multiple communites). They will move much more on an inventory home than a contract build. If you are looking to have them build you a home then expect to may more plus get hit with "upgrade" fees to get what you want. If you find an inventory home that has been sitting for a while and has everything you want or close to it, they will negotiate quite a bit more to move it off of their status report and clear the construction loan. With DR Horton being a public company, they are all about volume as well.

Good info here. A few other points...

- I use a ballpark estimate of the builder having a 20-30% margin on these homes. How much of that they give up is going to depend on how far along in the process the home is.

- You don't need a Realtor and can get the 3% off that they would have paid the Realtor. When I negotiate with them, I usually don't word it that way though. They don't want agents to think they advertise this fact. I usually just make an offer and tell them I will not be using an agent.

Thanks for the info!

Cole posted "you don't need a Realtor..."

I would tend to disagree. To be fair, I AM a Realtor, but anyone that knows me will know that it's not just a self serving argument.

Buying a home is a process with lots of moving parts. If you don't have someone representing YOU, then you are alone if there is any type of issue (the builder sales rep may be really nice but the builder signs their paycheck).

On the savings of 3%- I would bet you that for the average home buyer, if the right Realtor is representing them they will be able to save them more than that 3%. If the Realtor works with a builder enough and has some connections, that WILL matter when negotiating for the client.

Realtor can also help the buyer with things like financing questions, builder walk throughs, inspections, and many other things.

Are there people out there that can manage just fine without a Realtor? Sure.

Does that apply to most people? Absolutely not.

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I'm with Cody on this one. And I'll add to it. Our realtor got us a "dirt build" at the same price the inventory houses were going for.

We picked the lot, the floor plan, the bricks, stone, tile, etc.... and got all of our upgrades for what a similar inventory house sold for down the street.

I'm not a Realtor. But as an inspector I see lots of new construction situations. The ones who have GOOD realtors on their side are by far happier and end up with better houses and less stress. You should definitely get one - just make sure they are good.

AS for the 3% thing. I believe that is unfortunately not true. that 3% is built into the price in various ways. Besides which, having a good representative will save you much more, even if it was true.



[This message has been edited by Absolute (edited 8/31/2012 7:53a).]

Both Realtors (buyer and seller) get paid when the house is sold. Both get paid a percentage of the sale. Therefore, their goals are the essentially the same - namely, to make the deal happen as quickly as possible. As the buyer, neither is "on your side". Keep that in mind.

Before I get flamed (as I know I will), let me clarify a few points. First, I've used Realtors in the past and will again in the future - they definitely provide value. And yes, Realtors have an incentive to have happy clients, so in that way, they are "on your side". However, in any business transaction (such as buying a home), it is foolish to ignore the financial incentives of everyone involved. All I'm suggesting is to keep in mind that both Realtors have financial incentive to get the deal done quickly and for a high price.

Hacker,

Not going to flame you, but want to respectfully disagree on one of your points.

You mention that the Realtor would want the home to sell for the highest price (even the Realtor representing the buyer). I understand your logic. 3% of $300k is more than 3% of $290k. But it's only THREE HUNDRED DOLLARS difference. And that would assume that the Realtor is getting the whole commission, which they hardly ever do...so it's less than $300.

Any good Realtor would fight to save every penny for their buyer. In doing so, they will make less money (very, very slightly less). They will also have a client for life, and a client that will refer family and friends.

It is not about the money made on a single transaction. Not for a successful Realtor, anyway. It is about truly representing your client, and truly being on their side. It is about building a client base that is loyal and that provides referrals and testimonials.

Great Realtors DO work in the best interests of their clients. You cannot analyze it based on compensation for ONE deal...that is very short sighted.





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I will give you a real life example that is to my earlier point, that yes you should have a Realtor, BUT you have to make sure they are a GOOD realtor. As with any profession, they come in all kinds.

Have a nice young couple that I inspected their new construction house early last week. He has been on the ball and watching every detail. He had a pretty detailed "concerns" list when I got there. We found a variety of typical things and 3 things that I would consider big issues. Those things were a leaking master shower, a leak at one of the master bedroom windows, and improper installation of the cement board ceiling on the rear patio (hard to explain, but basically the pieces are too big and stick out from under the brick and there is a 1 inch gap between them and the bricks - so water is going to pool in this exterior ceiling area and cause problems.)

Anyway, client calls me today to ask my advice. He has been dealing with the builder to try and get things fixed from both his list and my report.

Builder claimed my IR camera must not be calibrated right and that I "don't know what I am doing with it" on the master shower. Luckily, in this case the leak actually darkens the grout in some places and that is visible. So my client runs the water and they see the darkening, can feel it is wet. Builder then says, "well hell, you wont be taking a shower in that corner you will be in the middle."

On the window, I could not identify the exact point of leakage. The most likely thing in my experience is improper flashing under the brick since everything on the surface "looked" okay. Builder tells client, it is from the sprinklers (not) yanks up the damaged piece and puts in a new one. Fast forward and it luckily rains again, new unfinished board gets wet. They point it out. Builder shows up rips the board out, throws it across the room and cusses at the client, telling them, he is the expert and they don't know anything about houses.

On the patio thing he flat refused to do anything but caulk it. Which will not work long term.

This client is a really nice, mild mannered seemingly intelligent guy. It is their first new house. The builder has become so abusive in the last week that they have contacted a "manager" and are meeting him tonight. Client called for my "advice/opinions" on how to deal with things. They are supposed to close on Thursday of this week, and the builder, in his rant basically said, walk if you want we will keep your deposit.

They are in a really terrible situation. I gave him my opinion on the phone. I don't know if it will help. Before I did, I asked, "do you have a Realtor - buyer's agent? And amazingly to me, he said yes. Yet this agent is not helping him at all in this. I know a dozen good agents, including Cody, that would be up in the middle of this situation, would have never let it escalate to this point, and would have helped them get things done. I honestly believe that if they had an agent like that, things would have never gotten to this point, the builder would have acted differently.

Builders (no offense meant to the builders on here) are not necessarily on your side. People buy houses every 5 or 10 years. They are not experts. Some builders will try and take advantage of that. It will pay you back in spades to have a GOOD realtor helping you. In the example above it would have made a HUGE difference if he had one of the Realtors I would have recommended to him. Instead, he is trying to decide how to fight, whether to take a new house that has problems, whether to walk and probably lose his deposit (or at least have to fight to get it back) and he did not do anything wrong.

Edit to add, in my experience this kind of situation will get more common and worse as the market continues to improve. The builders (again a very general term) will get more arrogant and harder to deal with. Do your homework on the builders. I have found JD Powers is fairly accurate on rankings from a CS standpoint. Have a Realtor, but do your research on Realtors, do not use your wife's friend's sister who just started (yes that was me 6 years ago.) Research, network and interview your agents They can be a great asset.

[This message has been edited by Absolute (edited 9/4/2012 6:21p).]

"Builders (no offense meant to the builders on here) are not necessarily on your side. People buy houses every 5 or 10 years. They are not experts. Some builders will try and take advantage of that. It will pay you back in spades to have a GOOD realtor helping you. In the example above it would have made a HUGE difference if he had one of the Realtors I would have recommended to him. Instead, he is trying to decide how to fight, whether to take a new house that has problems, whether to walk and probably lose his deposit (or at least have to fight to get it back) and he did not do anything wrong."



How would a realtor have helped in this situation considering 99% of them have very little understanding of the construction process ?

This person would have been better off hiring you or a another inspector to make progress inspections during various stages instead of paying 3% to a realtor who has little experience in construction.

JP,

A good Realtor would fight on behalf of his client. Would use contacts within the builders company. Would use his influence. A good Realtor would make sure the issues found are fixed, and if not would fight to get every penny of Earnest Money back for the client. Builders don't want to lose future business from a successful Realtor. You would be surprised what can get done.

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JP,

A good Realtor would fight on behalf of his client. Would use contacts within the builders company. Would use his influence. A good Realtor would make sure the issues found are fixed, and if not would fight to get every penny of Earnest Money back for the client. Builders don't want to lose future business from a successful Realtor. You would be surprised what can get done.

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JP,

It would not be their knowledge of actual construction. It would be their negotiation skills, their contacts with builder's, their ability to be a foil who takes the heat and keeps the buyer and builder from clashing directly over conflicts.

Another of my Realtors had a good point when we talked about this. She commented that builders also have incentive to keep their relationships with Realtors in good standing. While you and I as individuals do not buy houses all that often, a Realtor may bring numerous clients to a particular builder that they feel provides a good product and deals fairly with their clients. Or if the builder is a jerk, they will be likely to spread that information through their network.

Again, I am not trying to be a Realtor shill. Everything, in my opinion, is dependent upon the getting a GOOD realtor part. In my example and in my personal experience 6 years ago, I saw first hand how absolutely useless having a Realtor can be if they are not good at their jobs. In my case, I knew enough about houses and the process to get by. But I was very inexperienced at the negotiation part, a good realtor would have helped there. I think that probably applies to most people.