My Builder Says I Don't Need a Realtor. (Well, of course he would...)

Real Estate Agent with RE/MAX Alliance in St.Louis' Illinois suburbs 475.122155

Here's an absolutely true story (I wish it weren't) about why you really do need a Realtor when you're buying a new construction home from a builder:

My buyer client and I looked at maybe 30 homes together over the course of a three month period last summer. 

He'd like what we found and then would have relatives and friends come take a peek at his choices. After their input he tended to spin off in a wave of confusion, so we'd begin the search again. And again. And again.

On our last day out together, he invited a friend I hadn't met before to have a look at a new construction ranch he liked. We were doing a second showing and he was close to making an offer on the property with my help. The friend, who claimed to be a builder, told him that he could do better for him. 

Off they went, I suppose, because my client quit returning my phone calls or answering my emails after that day. 

Today I checked the property tax records and saw that he bought a new construction home in our area for $195,000. It was a builder transaction not in the MLS. No surprise. And it was also no surprise to see what had happened to him. 

Can you guess?

There had been six other sales in the same neighborhood over the same time period -- all listed in the MLS and using Realtors on the buyer side.

Those homes sold for:







My former client got royally screwed (that's the technical term) by his friend, the builder.

He paid about $23,000 more than the highest priced home in the neighborhood, and $30,000 more than the average neighborhood price. 

So friends...when a builder tells you that you don't need a Realtor to represent you in a new construction transaction, thank him for his advice and use your Realtor anyway.  The seller/builder will pay your Realtor's commission and you'll get a better deal. You will have your own agent advocate during the transaction and your won't be duped into overpaying for your new home. 

The builder told you not to use a Realtor? Of course he did...

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Enjoy life in the (618) area code in Southwestern Illinois, St. Louis' Illinois suburbs. SEARCH FOR HOMES HERE.



I help good people buy and sell good homes in St. Louis' Illinois suburbs, with special emphasis on the Metro East communities of Edwardsville, Glen Carbon, Maryville, Collinsville, Troy and surrounding areas in Madison County, Illinois.

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REMAX Preferred Partners is located at One 157 Center, Edwardsville, IL 62025, 618-791-8007 (direct) 618-655-1188 (office). We're easy to find on IL-157 in Edwardsville between Pasta House Co. and Shenanigans. Each office is independently owned and operated.


Michael & Belinda Jackson
Keller Williams Group One, Inc. - Reno, NV

You are SO right. We have seen so many buyers fall for the builder line... In the end they will pay big time for not hearing our side out.

Apr 17, 2010 07:48 AM
Pat, Ben and Martin Mullikin
M3 Realty - Brookfield, WI

Wow, does THAT ever bring back some memories. Similar situation, then the buyer had great remorse, but it was too late for me to help at that point. That was before Buyer Agency was a common practice around here. Now I cover that in our initial "real estate facts of life" chat before we put too many miles on the car.

Apr 17, 2010 08:02 AM
David Obbee - Agoura Hills, CA

Nancy: Sorry you lost out on that sale!  Hopefully by sharing, though, you may save someone else from overpaying for a home.  Thank you for the lesson!

Apr 17, 2010 08:35 AM
Constantine Isslamow
RE/MAX Eastern Realty Inc. Brokerage - Peterborough, ON
"Training and Accountability"

Thank you for posting and sharing your very informative article.

Wishing you continued success.

Apr 17, 2010 08:41 AM
Nancy Milton Holtzscher
RE/MAX Alliance in St.Louis' Illinois suburbs - Edwardsville, IL
Edwardsville/Glen Carbon, Illinois Broker, REALTOR

Mike & Belinda: Thanks for your comment. It would be nice if we could at least convince people to use some research in their buying decisions -- not just take someone's word for value.

Hey, Pat: Thanks for stopping by the blog. Sure would have been better if your buyer had listened to you first, wouldn't it. They'll know next time. As you can imagine, I had that "facts of life" chat more than once, but it just wasn't sinking in. Some people are moving so fast that they won't take the time to stop and really listen.

David and Constantine: Appreciate your comments. Thanks for visiting.

Apr 17, 2010 11:03 AM
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Just make sure that you go with your buyer the first time you visit the builders site and register them. 

Apr 17, 2010 11:04 AM
Nancy Milton Holtzscher
RE/MAX Alliance in St.Louis' Illinois suburbs - Edwardsville, IL
Edwardsville/Glen Carbon, Illinois Broker, REALTOR

Thanks for your comment Cindy. You're absolutely right. Unfortunately in this case, the builder was a buddy of his who did a custom build for him. 

Apr 17, 2010 11:53 AM
Ryan Shaughnessy
PREA Signature Realty - - Saint Louis, MO
Broker/Attorney - Your Lafayette Square Real Estate Partner

Nancy - We see alot of dual agency situations where the listing agent makes this kind of representation - in both new and existing home sales.  We take a different approach.  When we list a property in a new home community, we act solely as the seller's agents and not as dual agents.  It is the old adage - a person can't serve two masters (or at least can't serve two masters well).

Jul 11, 2010 05:27 AM