I recently began working with a client from out of the Texas state area. She came from the Pennsylvania area and worked for a home builder out there. Even though she was a re-lo buyer, she did not have a Realtor. I was shocked. I encouraged her to find one... and quickly!
I could feel resistance and asked her why she didn't already have one. She proceeded to tell me that where she was from, having a Realtor meant an automatic 3% higher price on the home. I couldn't believe it! I knew I had to tell her how untrue that was here in the grand ol' state of Texas.
You see, I work for a builder. I am not a Realtor. So, my statements are totally unbiased and come from a side most people don't get a chance to see. In Texas, for any reputable builder, there is no negotiating a commission that may or may not be paid to a Realtor. In fact, your negotiations are damaged by not having a Realtor! Think about it in the large scale of "Economics 101". You will only be buying one home from the builder. Statistically you are unlikely to buy another home for 5 years. That comes from the US Census. Buying your new home with a Realtor is like shopping at Costco, Sams, or other "big box" stores. You get the benefit of buying "in bulk". As a builder, I am far more willing to accept an offer lower than my list price if a Realtor is on the deal. Why? Common sense. That Realtor will have another client... and another... I am willing to make a little less on this one for the opportunity to sell several.
Now let me take it a step farther. What do we know about Uncle Sam? Taxes are inevitable. When we pay Realtors, it is a business expense. That's right, a tax deduction! Most builders have a fund set aside at the beginning of the year, a marketing fund, specifically for Realtor commissions, events, and advertising. It has already been calculated into the entire business plan. The point being, an individual home has no specific Realtor commission value.
Now that having a Realtor has not cost you anything, let me talk about the benefits (beyond negotiating) of having a professional on your side. If you are blessed enough to be purchasing a new home, you probably work for a living. Even if you do not, you most likely have several commitments that keep you busy. A Realtor's job IS your new home. While you are raising kids, filing your taxes, going to work, etc. your Realtor is watching the construction of your home. They are investigating the area you wish to live, the builder whose floor plan you liked, and the construction techniques that will influence your electricity bill every day for the life of your home. They know the market, the area, and best of all... YOU. They can help you find the right school for your special needs daughter, the best location for your son's select soccer, and the area with the most teenagers friendly hang outs... the best place for singles, couples, or families. They find where you will best fit. We have all been to Wal-Mart and walked the endless isles looking for the exact spaghetti sauce for dinner tonight. We get lost in labels. Okay... this one is higher calories but lower fat... this one is made with real vegetables... this one is organic... Wouldn't it be great to have a spaghetti sauce expert right there. You simply say, "I do not want to spend more than $5 for the spaghetti sauce and it can't have thyme because my husband is allergic." Then the expert hands you the 2 best sauces to choose from that fit your needs. THAT is a Realtor.
Of course, you now understand there is a benefit without cost of having a Realtor. There is one more issue left to discuss... a dark corner I have to bring up... ANY builder who would even insinuate that you do not need a Realtor. Why would a builder suggest such a thing after everything you just learned? For selfish, self serving reasons. Perhaps if you had a Realtor, you would know that had you driven 5 miles east, there is a nuclear dump, a prison release program, or a community ranked number 1 in the nation for it's amenities (twice as many for half the cost of the one you stand in). Or, perhaps they do not want a real estate professional seeing their construction techniques. I could come up with reasons for this behavior all day but they all come down to the same basic principle. The builder is not confident that a Realtor would encourage you to buy with them. The reasons for this may be vast (bad home owner reviews, poor warranty, sub-standard construction techniques, bad geographical area, poor reputation, etc). All I can say is that if you went to a used car dealership to buy a car and asked the sales person for a mechanic's report on the vehicle and they told you, "You don't need a mechanic. It's a good car. No lemons here. Trust me." Would you run? Of course you would. It is no different in real estate.
You are buying a home for your family, your most important and most valuable asset, to rest their heads in at night... a place for your children to learn to walk, talk, grow up, and graduate in. A place for you to retire and spend your years doing your favorite hobbies... for these important things... why take a risk?
Realtors do not cost you more on a home. They save you countless hours of research, thousands of dollars, and from making a mistake on the largest purchase of your life. If you are shopping for a new home, find a good Realtor first. Then let them do the hard work!
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