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MARYLAND AND NORTHERN VIRGINIA NEW HOME SALES - ARE BUYERS HELPED BY WORKING WITH A BUYER'S AGENT???

By Lenn Harley

Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

February 02, 2010 10:18 PM

MARYLAND AND NORTHERN VIRGINIA NEW HOME SALES - ARE BUYERS HELPED BY WORKING WITH A BUYER'S AGENT???

"HIRE A BUYER'S AGENT" would seem to make sense.

For new construction, I would say, "Hire a Buyer's Agent with experience selling new homes."

The differences between new and resale properties are significant from the basic Contract of Sale to the contingencies, to financing, to walk-through and settlement. Experience counts when working with new home buyers too. The contract, inspections, closing, etc. for new construction are not at all similar to managing a resale contract.

Was the agent the "procuring cause"? Builder's practice in MD and Northern Virginia is to pay the broker/agent fee to the agent who accompanies the buyer when they first visit the site. The agent must do nothing but accompany the buyer, get the registration made, sign the "Broker Fee" agreement in the Contract of Sale and sit back and wait for the commission check.

In reality, few real estate agents are even interested in selling to-be-built new homes. They would prefer to sell a resale and close in 30-60 days rather than the 5-10 months needed for new construction. I don't say that as criticism. Simply that few agents actually specialize in new home sales and the income stream is a factor. Which is, of course, why so many agents will show resales, ignore new construction and then are shocked, shocked when the buyer goes into a new home model without their agent and buys a home. That builder owes nothing to the buyer's agent/broker.

Short Sales also introduce a protracted closing and more than a few agents do not represent buyers in Short Sale transaction for the very reason of the delayed closing.

This is a lot more complicated than just considering working with an agent when buying a new home. Working with an agent with new home sales experience is the key.

SOLD BY LENN ROUND HILL, VIRGINIA

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988. Specializing in New Home Sale in Maryland and Northern Virginia.

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A LOUDOUN COUNTY REAL ESTATE AGENT FOR LOUDOUN COUNTY HOME BUYERS.

To search homes for sale in Loudoun County, visit the Homefinders.com "Search Listings"site. Enjoy your search and contact us to visit new or resale homes for sale in Loudoun County, Virginia. Ask about the Homefinders.com New Home Buyers' REBATE. 1% cash back to you when you work with Lenn to find and buy a new home in Loudoun County. We know Loudoun County homes. We can help.

Lenn Harley, Broker, New Homes Specialist, Homefinders.com, 800-711-7988.

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Darla Maddalone

Bend Oregon Homes Online-Principal Broker, SFR, CSP - Bend, OR

Well said. There are many nuances to new construction - a Buyer's Agent experienced in selling new homes can offer their client excellent insight and prepare them for the whole process. There are specialized new construction forms, a whole new set of rules, disclosures, etc.

Feb 03, 2010 04:53 AM

Virginia Hepp - Mesquite NV REALTOR

Desert Gold Realty - Mesquite NV Homes For Sale - Mesquite, NV

Mesquite NV Homes and Neighborhoods - Search MLS

I love helping buyers with new construction - choosing the lot is the first step - location within the subdivision can have a huge impact on future value of their home. Most of my buyers are from out of area, buying a second home or retirement home - they are not here to monitor the construction - I am and I do.

Last year, an agent in my office did a study on solds in a certain new home subdivision. Buyers who were represented by an agent paid an average of $6 to $7 per sq ft less than buyers who bought on their own - and that did not include the extra seller concessions like appliances and landscaping.

Feb 03, 2010 05:54 AM

George Souto

George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT

Your Connecticut Mortgage Expert

Lenn, it is a long time between going under contract on a new construction house and the Closing, and I do see that as a turn off for many Realtor, when it should not be. To me Dana has the right attitude. Just keep feeding that pipeline, because you are still going to need a pay check in six months.

Feb 03, 2010 06:10 AM

Claudette Millette

The Buyers' Counsel - Ashland, MA

Buyer, Broker - Metrowest Mass

Lenn:

I love helping buyers with new construction. Yes, it can be a long process but it is also a fascinating one that results in very happy buyer clients.

Working with new construction is different than dealing with resales. There are nuances that an agent needs to know about from looking at builder specs and possible upgrades to an entirely different negotiating process.

Feb 03, 2010 06:23 AM

Joetta Fort

The DiGiorgio Group - Arvada, CO

Independent Broker, Homes Denver to Boulder

All the builder's contracts that I've seen (I actually have a collection) require the buyer to sign away several of the rights they have when buying a house in the state of Colorado. I've never known an agent who represents the builder that pointed out that fact. Or any other facts either. It's just, "sign here, initial here, sign here". Buyers need an agent who will do their job and look out for their interests in new home transactions.

Feb 03, 2010 06:53 AM

Cheryl Ritchie

RE/MAX Leading Edge www.GoldenResults.com - Huntingtown, MD

Southern Maryland 301-980-7566

I've done new home construction sales since Day one 25 years or so ago. It's rewarding and the delay in pay all becomes a flow after a while.

Feb 03, 2010 07:59 AM

David Cahill

Century 21 Cahill Associates - Boston, MA

It does help to ask your agent what kind of experience they have in selling new homes. Also, random question here, but why are there no windows on the side of the house???

Feb 03, 2010 08:23 AM

Jeff Belonger

Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ

The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Lenn.. of course your post makes sense and the end result is to have someone that is experienced and knowledgeable about the whole process adn services. I do agree that some realtors think one source over the other is better for them. But what kills me is what I just read from Trulia questions yesterday. A borrower sent out a question asking for advice and help in buying new construction, but that they didn't want a realtor.. LOL Rut Row... sorry... I know this person asking this question is not educated in the process... but seriously, what is their thinking on this... wow.. In any how, good post.

Jeff Belonger

Feb 03, 2010 08:26 AM

Aaron Vaughn 830-358-0455

Conifer Builders LLC - Canyon Lake, TX

I have years of experience selling new homes -- as the builder. As an agent, I don't like to simply register the client and walk away, because I know that the builder contracts are weighted to the builder and I like to be there when my client has questions.

Feb 03, 2010 11:30 AM

Charles Stallions Real Estate Services

Charles Stallions Real Estate Services Inc - Gulf Breeze, FL

Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

When it is one of our builders I would rather the buyer come in with another agent, if not we let them know and sign off that we represent the builder and in no way represent them.

Feb 03, 2010 11:57 AM

Lana Robbins Realtor ® Licensed Real Estate Broker

Aloha Kai Real Estate - Clearwater, FL

Licensed in Florida, Washington, and Hawai'i

Hi Lenn. My twin sister lives in Newport News VA and when she bought her new home she used a buyer's agent. I'm glad she did. ~ Lana

Feb 03, 2010 12:59 PM

Chris Olsen

Olsen Ziegler Realty - Cleveland, OH

Broker Owner Cleveland Ohio Real Estate

Hi Lenn -- I used to live in Great Falls, VA and we bought a new home there and hired a very experienced new home inspector as part of the process before closing and it was amazing all the things he found, and the builder was considered a good builder. The builder fixed everything on the list. An agent is key to understanding the process and dynamics of new home sales. Great post!

Feb 03, 2010 01:37 PM

Jean Hanley

Coldwell Banker Kivett Teeters - Hemet, CA

Specializing in Folks Who Want To Buy/Sell Homes

Lenn, back in the late 80's I sat a tract of new homes for a while and learned so much from THAT side of the table. It IS a different buying experience for these buyers, and they really need to be protected. Those agents (of which I was one) are working for that builder for the most part.

Feb 03, 2010 01:40 PM

Markita Woods NMLS#196099

Fairway Independent Mortgage Inc. - Woodbridge, VA

Queen of Mortgages - FHA, VA, Conventional, USDA

Good post. Experienced agent equals less stree for everyone.

Feb 03, 2010 01:40 PM

Jane Peters

Home Jane Realty - Los Angeles, CA

Los Angeles real estate concierge services

I would definitely be careful when using an agent to represent you in new home sales, especially here in Southern California. I was recently helping a buyer who was considering a condo in a newly constructed development. I did not have a clue what I was doing, but I was diligent enough to get myself educated as soon as possible and learned a tremendous amount. Enought to know that the contract would need to be reviewed by an attorney. However, once reviewed I was fully prepared and able to take over. I would be scared to death as a buyer to even think of purchasing without being represented by someone on my side.

Feb 03, 2010 03:07 PM

Katerina Gasset

The Gasset Group & Get It Done For Me Virtual Services - Provo, UT

Amplify Your Real Estate & Life Dreams!

Lenn- And what better agent for a buyer to choose than Lenn Harley! ;) You know your contracts and you know how to represent your buyer. That is the key.

Feb 03, 2010 04:21 PM

David Dee

RMX REALTY - Alhambra, CA

Real Estate - San Gabriel Valley (L.A.) & N. Orang

From the desk of David Dee,

Lenn, great topic and it is vital to hire a buyer's agent. It costs the buyer nothing and they get the protection they needed throughout the process in regards to reviewing the contracts.

Feb 03, 2010 05:40 PM

Julie Baldino

Front Door Realty - Vancouver, WA

Opening Doors to New Chapters...

Great post! I recently lost a long term client to a builder who offered them a 0.5% rebate for not using me as a buyers agent (insulting huh?). I have sold new construction for years as well as built homes myself.... in fact my business partner sold these folks their last new home.

I actually encouraged them to go the school district they loved ,and request a boundary exception. They got it, walked into the model home, and said they didn't have an agent IF it meant a kick back to them.

The result? They are building a $500,000.00, 4000 square foot house surrounded by 1500 square foot ranches that sold for 240k! Easy to do the math there! I strongly urged them to reconsider the decision to do so based on the comps (because of course they were still calling me for free advice). I saw the foundation being poured the other day and couln't help but shake my head.... what are they thinking making a half million dollar decision by themselves for 0.5% advantage??? NOT smart.

The kicker? My husband was his boss at the time! You can't imagine how the next day at work went .... after I showed my husband how many listings I had shown them in the last 18 months. Ugly situation with an uncooperative builder that did not help the scenario... they just wanted to milk them out of as much money as possible.

Feb 03, 2010 06:41 PM

Marian Goetzinger

Pine Knoll Shores Realty 252-422-9000 - Pine Knoll Shores, NC

Crystal Coast Real Estate NC

Hello Lenn. I've only sold a very few new construction homes in my fifteen years of the business. I'm looking at all my practices now to see what else I might do to be profitable. Thanks for this heads up. I think I'll get up to speed and try some of that too.

Feb 04, 2010 04:54 AM

Lane Midgett

1776 Real Estate Group Richmond, VA Local Expert - Richmond, VA

Everything is negotiable, so it helps to have a buyer agent assist them.

Feb 04, 2010 08:23 AM

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