I don't need an agent because I'm buying a new home from a builder

Mortgage and Lending with Fairway Independent Mortgage Corporation Nevin NMLS #69651

signGet real!  Why would I want to have an agent act as a middleman when I can deal with the builder?  I can get the house for less because there will be no commission to pay. Why should I lose thousands of dollars just to have you walk in with me? If you are a home buyer how often have you thought this?  If you're a Realtor how often have you heard this?

When the cat is away the mice will play.  There are so many things that can work against a home buyer when they aren't properly represented. Check out  the latest scandal by some home builders.  No agent to review your paperwork and you aren't an attorney or well versed in deciphering a harmful clause in a real estate contract.  Glad I'm not you.

People will pay legal fees to protect themselves in a small civil case but think they can "wing it" on their own when buying a structure costing hundreds of thousands of dollars. As I recall a lot of people were taken advantage of by builders.  For example, everyone in the real estate community in Sacramento knew to steer clear of this company.  These unlucky home buyers who went at it alone ended up with a huge mess on their hands. A mortgage on a home they couldn't occupy.

Don't think this is an isolated incident.  Visit www.ripoffreport.com and type in your favorite builder and see what pulls up.  Most complaints are made by buyers who were not represented by an agent.  To further drive my point home, how many of you reading this post think oversight of mortgage lenders and investment people is a good idea?  Who is going to oversee your new home purchase?  The agent who is paid by the builder?  Uh huh, you catch my drift.

You're not  hiring a person who lets you look at the inside of houses or a shuttle driver.  You're hiring a professional who's little subtle re directions during the transaction helps you avoid disasters.  You think it was a great idea and we know it was more than that.  It saved you from a lawsuit.  These lawsuits aren't always contractual either.  Many can fall into the form of discrimination.  Some blatant most subtle.  I didn't know is no excuse in a courtroom.

Even if your theory of a home being sold for more holds true, hiring a Realtor to represent you in a purchase of a new home is much cheaper than the potential mounting legal bills or paying for a home you can't even occupy.  Agents know contracts, federal and local laws, have the inside scoop on bad and good builders and always stay abreast of breaking news that could affect the area you are buying in or the credibility of the builder.  If the builder thinks they can pull a fast one on you to make more money, then there's a good chance they might.


Re-Blogged 20 times:

Re-Blogged By Re-Blogged At
  1. Bob Haywood 08/27/2010 03:42 AM
  2. Lottie Kendall 08/27/2010 04:57 AM
  3. Carla Muss-Jacobs, RETIRED 08/27/2010 08:48 AM
  4. Andi Grant 08/27/2010 08:49 AM
  5. Cece Blase 08/27/2010 03:10 PM
  6. Lane Midgett 08/27/2010 03:32 PM
  7. Susan Laxson CRS 08/27/2010 03:38 PM
  8. Kathy Mendham-Meathrel 08/27/2010 04:16 PM
  9. Ralph Janisch ABR CRS Broker 08/27/2010 04:34 PM
  10. Linda Graves Arnold 08/27/2010 05:08 PM
  11. Megan Izdebska & Hanna Manoufar Chandler, Scottsdale Real Estate Agent 08/27/2010 05:35 PM
  12. Chris Webster 08/27/2010 08:37 PM
  13. Ritu Desai 08/28/2010 04:17 AM
  14. Ritu Desai 08/28/2010 04:18 AM
  15. Jason Feinman 08/28/2010 05:23 AM
  16. Yvette Chisholm 08/29/2010 02:26 AM
  17. Carrie Sampron 08/30/2010 05:50 AM
  18. Nancy Timberlake 08/30/2010 07:09 AM
  19. Michael Johnson 08/30/2010 08:18 AM
  20. Randy DeLaMare 09/20/2010 06:01 PM
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Eileen Hsu
Douglas Elliman Real Estate - Manhattan, NY

Many Manhattan New York buyers have had similar thoughts on going 'direct'. However, it is hard for buyers to know all the ins and outs of the builder since at the sales office, only the positive of the building will be discussed.

Aug 28, 2010 01:35 AM #41
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Nevin...those that have not learned to "purchase" a second set of trained, caring eyes, will live to tell the story on what it cost them one day.......Biggest investment of your life and you are cutting corners? I don't think so...Great post for the most........thank you Nevin...

Aug 28, 2010 02:57 AM #42
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Nevin, buyer representation is a must. Someone has to look after the buyer's interest whether it is a resale home or a new home. These are the same people who don't think they should pay for an inspection because the house is new. This can also be a big mistake.

Aug 28, 2010 03:10 AM #43
Irene Bilinski
RE/MAX Hallmark Realty Group Ottawa - Ottawa, ON
Real Estate… It's All About You

Had this happen just recently in Ottawa, Ontario Canada.  Young couple being transferred did their homework online set up an appointment with the agent for the builder but then their mortgage broker suggested they call me.  Here's what I was able to do:

1.  I found out that (a) a multi-lane bus route was going to be built behind their home; (b) - huge hydro towers were going behind their home and the last item - a 4 or 6 apartment building next to their unit.

2.  Found them a nicer unit - less money - closer to schools and daycare and the closing date worked better for them.

The first builder representative never disclosed any of the information - BUYER BEWARE - and how can you when you are new to the area.

Aug 28, 2010 03:34 AM #44
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

As a person who sold new homes for many high profile builders in the San Diego community, I know that builders do have a bottom line, and many times when agents would walk in after their clients had been into the community and register with out an agent, and demanded that they get a commission -was always a issue.

If a builder is co-operating with agents, they have a rule, that you must accompany your clients across the sales office threshold to have them register, & it must be the first visit to the builders -- not so hard to do -- so why do agents not follow this simple guide line.

Aug 28, 2010 03:41 AM #45
Nevin Williams
Fairway Independent Mortgage Corporation - Cary, NC
Senior Mortgage Advisor

Susan _ Hi there and thank you!  Yes I am witness to clients calling on your professional services to represent themon a new home purchase.  I spoke to them a couple of weeks ago and they said they will be ready to go in a few more months.

Rosalinda - Thank you for sharing this!  To any new home buyers reading this here is proof of how important it is to get representation.  Rosalinda is herself a Realtor and even an experienced Realtor requests representation from another Realtor because that agent is local to the area and can guide her.  For us loan officers locality really is not important.  For agents it is extremely important.

Frank & Sharon - WOW!  I wasn't aware of this and I'm a real estate investor and have bought many new construction homes.  Tricky tricky!

Coleen - My thoughts exactly!  Hey I understand that people want to save money but where do you draw the line?  Thanks for commenting!

Ken - I think this is steering and is a RESPA violation.  Totally unethical

Jeanne - So true.  If I had this magic method making me millions then why would I pitch it on TV?!

Chris - Correct.  I warned a friend who wanted to buy new construction.  Now she has the builder in court trying to recover $70,000 in repairs she had to make due to the builders negligence.  She refused to be represented by an agent.  Later she found out that some of the local agents tried to steer clear of this builder.

Jennifer - Love to hear about your experiences!

Fred - That lost deposit in some cases is more than an agents commission aren't they?

Bernadine - Thanks

Lori - That's a biggie too.  In some parts of the country I suspect that the city inspectors are paid off by the builder.  Either that or they are negligent themselves.

Nate - That goes for our industry as well.  People don't focus on the great experiences as much as they do the negative.

Cheryl - Wow, I never knew that.  Was is customary nationwide or local to your area?

Don - I think greed clouds people's judgement- period.

Eileen - So true.  I think sharing true but scary stories about people being burned in a transaction where they weren't represented may be a productive marketing strategy.

Richie - Thanks!

Michael - So true.  I bet buyers reading these comments are thinking, Oh you just say that because your an agent and want to get paid.  Not so.  We're like parents watching their kids do something that will get them hurt!

Irene - I think this story should be a blog post with plenty of details and then should be featured!

Lorraine and Loretta - I think your comment is a different issue than non representation.  There's an idea for you to write about.  Probably get featured too! 


I disagree with you that the agent must accompany their clients.  Agents can't always control their clients behavior but may have already spent hours with them.  Although the agent may not have procured the buyer in this one instance I think if they are being represented and have not asked their agent to be released from their agreement then I think it is unethical to not pay their agent.

  Sometimes clients might be going somewhere and drive by a new development and say, hey want to take a look at these really quick?  Their agent may not be there when they make this on a moments notice decision.  Ethical builders ask the customers if they are working with an agent and when they say yes I'm being represented I have known the builder to ask them to write down their agents name. Personally I think this is the best policy.



Aug 28, 2010 05:15 AM #46
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Carla - thanks for blogging this important topic.

I have listed many short sales for clients who extremely overpaid for their houses that they bought without Realtor representation. Whether it's new construction or not, a good buyer's Realtor will point out prices of comparable houses, and will emphasize major or subltle floorplan or location issues that severely diminish the resale value of the house.

Aug 28, 2010 05:28 AM #47
Mario Jannatpour
RE/MAX Alliance in Louisville, Colorado - Louisville, CO
Author of the Book, "The Honest Real Estate Agent"

Nevin--thank you, thank you, thank you!  You are so right!  I'll have my Clients call you next time when they think they are getting a "great deal" by going direct with the Builder.  :) 

We run into this all them time and when the Buyers then become Sellers they sometimes find out their great deal was not so great when they can't sell their house for what they expected.



Aug 28, 2010 07:39 AM #48
Ellen Kippel
Weichert Realtors - Suffern, NY
Licensed NY and NJ realtor 914-588-2365

Thanks, Nevin.  I like the way you identified how important we realtors are in helping people buy new construction.  People don't always realize how many ways we help them and that we are not just glorified drivers.

Aug 28, 2010 07:44 AM #49
The Brewer Team - Benchmark Realty
Benchmark Realty - Franklin, TN

Nevin -I've heard this song before, and it always leaves a sour taste in everyones mouth. I had a visitor at an open house last year who ended up buying a Fsbo because he thought he was saviing money. he ended up paying appraised value, but didn't have an inspection and missed a lot of deferred maintenance in his haste to save money. It cost thousands more in the end than it would have if I had represented him.

Aug 28, 2010 03:37 PM #50
Yvette Chisholm
Long & Foster Real Estate, Inc. - Rockville, MD
Associate Broker - Rockville, MD 301-758-9500

Absolutely excellent post.  I am going to reblog!

Aug 29, 2010 02:22 AM #51
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Great post Nevin.  I'm going to re-blog this information for wider distribution.

Aug 30, 2010 04:58 AM #52
Kathy Batterton
RE/MAX Infinity CDPE, E-PRO, GRI - Pace, FL
TeamWork makes the Dream Work!

Great post!  A buyer will most likely get a BETTER deal with agent representation.  How many homeowners show up at the house after closing and realize there are no blinds, garage door openers, etc?  The agent would have asked for those things in the contract.

The best comment was the one about knowing the comps of other sold homes in the neighborhood and what the concessions were.

Aug 30, 2010 05:38 AM #53
Carrie Sampron
Home Smart Realty Group - Highlands Ranch, CO
ABR SFR & Kathy Sampron (303) 931-3629 Highlands R

Nevin:  Love the post.  I bought new construction years before I became a Realtor and my agent at the time was one of those who did just show up and didn't offer any substance to the deal.  We learn from these experiences, whether we know it at the time or not, and become better for them.  I love your points - thanks for bringing this topic to the forefront.  I will be re-blogging as well.  Thanks - Carrie

Aug 30, 2010 05:49 AM #54
Joe Feinhandler
First Priority Financial dba Best Equity - Coronado, CA
FHA, Jumbo, San Diego

Now lets talk about builder financing :)

Aug 31, 2010 06:41 PM #55
Nevin Williams
Fairway Independent Mortgage Corporation - Cary, NC
Senior Mortgage Advisor

Dave - I say don't go to court without your lawyer!  Same thing.

Mario - I have heard of this many times before!  Have them call me, I'llset them straight.

Ellen - People sometimes just don't "get it"

Brewer Group - Guess he got what he asked for.  Why don't people listen?

Yvette - Thanks!

Gabe - Thank you!

Kathy -  LOL Don't you love it when the seller tries to take half of the house with them?  Until you tell them they can't!

Carrie - Thanks!


Sep 01, 2010 03:06 AM #56
Nevin Williams
Fairway Independent Mortgage Corporation - Cary, NC
Senior Mortgage Advisor

Joe - No kidding!  We have it now

Sep 01, 2010 03:07 AM #57
Victor Zuniga
Berkshire Hathaway Home Services California Properties - San Diego, CA

Realtors are problem solvers and problem solvers are sometimes hired not for what they do but for what they know.

Sep 02, 2010 07:23 AM #58
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

Home inspections are another thing that people buying new construction think they can skip. Not a wise move.

Sep 05, 2010 05:37 AM #59
Nevin Williams
Fairway Independent Mortgage Corporation - Cary, NC
Senior Mortgage Advisor

Victor - Agreed!  Look at lawyers for example

Jim - Not getting a home inspection is crazy!

Sep 05, 2010 04:03 PM #60
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