Under certain circumstances a builder will offer higher than traditional commissions to buyer's agents.

Here are some of the circumstances under which a builder may offer such a premium:

• Builder is approaching close-out. The builder may be ready to deploy the selling agents at a newer community. By offering higher incentives the builder is hoping to close the community sooner and put a quicker end to the associated expenses of running a community.
• Builder is experiencing slow sales. Higher commissions do bring in more agents. Buying agents need to ask themselves, "am I showing this home because it offers the buyer a 'good deal' or am I doing so at the expense of my fiduciary to the buyer?"
• Builder is closing a month, a quarter of a fiscal year. When builders try to achieve sales goals they may pull out all stops to bring in more deals.

The question of fiduciary...

If the builder is offering an incentive to the buyer that is greater than the incentive to the buyer's agent the question of ethics is less in play. If the builder is offering a buyer's agent a greater incentive than the customer; the question of ethics does arise. In such cases, which are rare, I will (in private) point this inequity out to the builder's agent. I also point this out to the buyer. This is a good time to tell the buyer the costs and incentives that are associated with their potential purchase. It is my feeling that the agent very much should disclose that the builder is offering a higher commission than average and that this should have no merit in their purchasing decision. This will assist in assuring the buyer that the agent holds their interests above their own.

For all those wishing to refer buyers to the greater Phoenix area feel free to refer them or point them to www.newhomesaz.com where they'll be able to search the market for new and existing homes.

Chuck Willman - 480.292.0600