I'm not following you.

Are you asking if you can represent yourself and get the whole commission on your own?

As far as new build, Realtor commissions come out of their marketing budgets. You won't get any discounts a customer with a Realtor would get, and if you dont use one, they simply pocket the savings.

The builder will LOVE that you don't have an agent and that will save them the $12k they normally pay the buyer's agent. They are going to act like they will save you money since you aren't using a realtor.

Will they actually lower their sale price as you described? In a strong market, nope. In a slow market they may, but maybe not drop $12k!

So yes u can try to negotiate this with them and it is worth a try, but don't be surprised if they don't budge much on sale price and don't expect them to discount you on upgrades because at the end of the day they want to take ALL your money lol

Also, a builder will not drop their sale price. They might offer you discounts on upgrades, but they have a duty to the other buyers in their neighborhood to maintain value of the home.

For builders, Realtor commissions are built into the price of the home and if you were to break down a balance sheet they would fall under a marketing or advertising section of the expenses. When you come without a Realtor, they simply remove that 3% expense from the ledger. You may then think that they will give you some kind of comparable discount on sale price, upgrades, or design elements, but they're simply not going to do that because they dont want to establish a trend in the market of increasing discounts.

You're not necessarily hurting yourself (unless you have no idea how to read and understand a real estate contract, in that case.. you better hope they are nice and dont take advantage of you) by not bringing a Realtor, but you're also not really helping.

The reason to not use a Realtor is because there really just isnt THAT much for them to do. But if your reason is because you think you could get the money they would be getting, you're wrong.

exp said:

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Home is listed at $410,000 and he said if we didn't get a buyers agent involved he could probably get the builder to pass the savings on to us in the form of a lowered sales price.

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Let us know how that turns out...that is typically the first thing they push but most people never actually get the savings promised!

Like I said, they want a buyer's agent out of the picture to fatten their bottom line, not yours

I am not a real estate agent so I do not have a dog in the hunt, but I am a lender so see a lot of contracts for new construction. I would say a new construction might be the most important time to have quality representation, not just any representation, because there are a ton of levers that builders push and pull that do not exist in an existing home transaction. There is a lot of funny money built into the deal as well as "inducements" to use certain lenders etc that a good agent can help you navigate the (many) minefields. Again, just any agent might not be of use but a quality agent that is experienced will be worth quite a bit.

I'm also mortgage and you know what I call a client without a realtor? A freeloader. Cause I end up doing the realtor work for free j/k

Serious post. Why not negotiate a rebate with a realtor and get the best of both worlds

exp said:

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I appreciate the feedback, and I'm sure you're speaking from some deal of experience.

The whole reason this came up is because the selling agent sitting in a new build model home proposed the idea to me directly. Home is listed at $410,000 and he said if we didn't get a buyers agent involved he could probably get the builder to pass the savings on to us in the form of a lowered sales price.

That's my entire basis of experience for thinking this is possible, but no idea if they'd actually follow through.

I do believe you when you say builders won't really go down on price. I've heard that they'll set it at X and stay firm...maybe eventually lower it by a few percentage points and sit firm...and keep going until someone pays full price.

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Full disclosure...I'm a broker. My guess is the builder has already planned to lower the price of the home to begin with, and this savvy salesperson has already hit a hot button for you and would love to negotiate with you as opposed to a realtor with market knowledge.

Not a knock on you at all and please don't take this the wrong way, but you don't know what you don't know. You're currently in shark infested waters and it's feeding time...

Builders seem like a cross between a day trader, a sweat shop boss, and a loan shark. But they really like live oaks...well, at least the tiny ones they plant after they kill all the big ones. Don't bring a knife to a gun fight.

I'm with Stacy you will be in shark infested waters. Without a boat. The builder contracts are the most biased piece of binding crap ive ever seen. They should be outlawed they are so bad. Your 12k will be the least of your problems

Always use a realtor as a buyer...

And...never trust a developer (or anyone else that is willing to cut down 4000 trees to build 200 houses)

How many trees were cut down to build your home?

I'll pile on..... Don't just get any-old realtor. You need a realtor that has lots of experience negotiating with builders. Also, since you already met with the builder without an agent, they are going to try to tell you that they arent going to pay them anyways, so you will have to.

Envelope money kickback!

I'm not a Realtor, but am in mortgage so I'll give my most recent case of dealing with a builder, their preferred lender and the contract.

Guy is buying a $650K house and builder sends him to their preferred lender. As an incentive they offer him $6K toward is closing costs. He calls me a couple of weeks into the process and shows me their quote. The rate they were quoting him was significantly above the market (imagine that) and at the loan amount created a premium of just shy of $12K. They were giving him $6K and taking $12K from him and he was stuck with a rate above market for his trouble.

In order to try and compel him to close with this lender they're telling him he must close this month. Contract has no closing date written into it, it states closing will be at the discretion of the builder. The builder had agreed to close July 9, but when they got wind they might lose the financing deal started pressing him.

Never forget the nice guy in the model home works for the builder and doesn't GAF about you.

In this day and age of CFPB and the perceived desire to protect the consumer I have no ideal how the builder/lender pressure deal is allowed to continue.

Let me add one more thing.

Guy I'm talking about was going to go down $6K right off the bat with the incestuous builder/lender financing they offered him and then take a payment $129/month above market for as long as he maintains that loan.

He called me because he has a buddy who's wife is a Realtor. He was bragging to them about getting $6K in closing costs from the builder/lender and the Realtor wife told him he should probably get a second opinion because it sounded to her like he was getting hosed.

Builders love to see unrepresented buyers come in the door.

Builders hold open houses for Realtors, they offer bonuses to Realtors, they offer trips to Realtors. If you think they mind paying Realtors I'd have to disagree.