My Chance to Be a Fly on the Wall

By
Real Estate Agent with Long and Foster REALTORS®, Gainesville, VA VA License # 0225089470

I've often heard stories from agents in my area about the new home builders doing their best to cut out the Realtors from new home transactions.  I must admit I thought a lot of this was just sour grapes on the part of the agent who got left out.  Seemed no different than an unfaithful buyer dropping their agent in favor of something better.  And my first encounter with the builders on this issue reinforced my opinion.

I received a phone call from a client that I had sent over to look at some new homes in Haymarket.  I was tied up with another client and could not get my buyers to wait for me.  I explained what might happen (the builders will try to fast talk you out of representation), sent them off with a business card and hoped for the best.  Somewhere during their "experience" with the builder's rep, my buyers were asked if they had an agent.  When they explained yes, two things happened. 

1. The rep explained it was a shame since they would have been able to discount the home for them if they didn't have an agent (something I had already prepared them for)

2. Said that if I was not there during their first visit, that I would not earn my commission.   The husband of this buying couple called me to tell me that he was disappointed in the attitude, and he wasn't so sure he wanted to buy from the company that didn't want him represented.  I had trained him right.  And he made me chuckle when he added, "If she asks where you are, I'm going to tell her you're in the bathroom."

Earlier this month I was helping my mother move into a new construction condo in the Gainesville area, one I had helped her purchase. (Being represented by her agent, she negotiated a sales price almost $80,000 below list price on the last unit with a great view).  I was not dressed to impress that day.  I had no make-up, was in sweats, and had on a baseball cap.  When I walked into the sales office to borrow the elevator key to make our move to the third floor easier, I got that chance to be a fly on the wall of "that" conversation between a bulider's rep and their prospective buyers.  Thankfully, it wasn't the rep that had helped my Mom.  Here's what was happening:                                                

Two or three daughters were sitting around the couple who were interested in buying the condo.  The builder's rep was saying, 

 "If you chose NOT to use your agent, I could adjust the price of the condo accordingly, but with your agent, our prices are firm." 

I walked into the opposite office where my Mom's rep was sitting and said, "I can't believe what I'm hearing out here.  Your co-worker is trying to talk these buyers out of their Realtor representing them."  He all but ignored what I said and started talking about the key I'd come to claim, and hussled me out of the office. 

Needing a bottle of water (and wanting to see if the former conversation had been squahsed), I walked back into this sales office ten or fifteen minutes later, only to hear more severe arm twisting going on from the builder's rep for this couple to not use their agent.  How disappointing. 

The couple that had stuck to their guns with the builder in Haymarket, and even lied about my being in the bathroom, had been prepared for the battle.  I had told them my own horror story of building my house, and how I eventually needed to hire an attorney to claim $10,000 incentive that was clearly written in my contract.  I explained that without my Realtor representing me, I would not have been so brave, and likely would have caved.  I detailed every intimidation technique my builder had used on me, and clearly, it made my buyers want a Realtor on their side. 

I still prepare my buyers this way if I suspect they will be out on their own dropping in on new construction on a whim.  The bottomline is: Even though it is a new house, every buyer should have someone looking over their shoulder making sure they get everything they are entitled to. 

Now I've added another story of deceit on behalf of builders.  One that clearly shows WHAT a Realtor can gain for you in a new home transaction ($80,000 off the list price) vs. the 3% off of a $300,000 sales price.  That's a savings of about $70,000, in a transaction that was listed in the low $300's. 

It pays to have a Realtor.  Make sure you share these types of stories when educating your buyers.  Builders in the Northern Virginia area are still trying to cut agents out of deals!!!

 

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Topic:
Home Buying
Location:
Virginia Prince William County
Tags:
realtor
builders
new construction
commission
gainesville
attorney
prince william county
haymarket

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Rainer
62,831
Allen C. Wright
RealtyU - Aliso Viejo, CA
NS, AHS, REPS
I have worked with many builders and the one contention that they had was ... if the agents wants to get paid they had better be present during the Offer (Contract Signing) and the Closing ... Most builders I did consulying work with went out of their way to keep agents happy ... but they did not want to do all the work for the agent and the agent NOT even bother to be their to right/review the contract with their client or be their at the closing ... that is just plain lazy and is not representing your client
Nov 28, 2007 01:07 AM #1
Rainmaker
1,924,738
Tom Braatz Waukesha County Real Estate 262-377-1459
Coldwell Banker - Oconomowoc, WI
Waukesha County Realtor Real Estate agent. SOLD!

Chris,

A lot of the builders in Wisconsin are pretty cool. Of course, some were not. I remember in a great market where I could not even get in the door. Times have changed. Now the co-broke is larger than normal.Over all, there are many really good builders in my area that are really nice to work with.

Sincerely

Tom Braatz

Nov 28, 2007 01:07 AM #2
Rainer
43,308
Michael (Mike) Elliott
Nottingham Real Estate Group - Hamilton, NJ
Every situation is different, and we have all seen agents who dont earn their fee.  Many others do. Problem is, most consumers don't understand until they are too far down the road. Not all buyers need "our savvy" either, as many of them are rather capable. Most are not just off the turnip truck.
Nov 28, 2007 01:13 AM #3
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

I always try to be there when my clients tour homes, but I can't control their every move.  It's really no different than having one of your buyers enter an Open House that you had no clue they were going to see. 

The point of this particular blog was to show how vehemently this rep was talking these people out of using their agent.  It was sad, and probably a spur of the moment thing when this particular couple landed in the builders office.  Their agent likely had NO IDEA they were going there. 

When I'm educating my clients about home shopping, I always recommend differing their looking at new construction until I can be there to help them. 

 

Nov 28, 2007 01:14 AM #4
Rainmaker
575,553
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re
You are right the builders are trying to go around us because they know they can control the transaction if we are not involved. Thanks for the post and you are correct we need to prep the buyers to be prepared.
Nov 28, 2007 01:19 AM #5
Rainmaker
94,887
Nancy Pav
Century 21 Redwood Realty - Ashburn, VA
Nancy Pav, Your "GottaHave" Realtor
It is unfortunate that this is happening.  I'm glad you educated your client on what might happen.  As a consumer, it would make me really nervous if somebody recommended against representation....of any kind!
Dec 02, 2007 12:53 AM #6
Rainmaker
117,777
Anne Clark
Metro Referrals - Gainesville, VA

This is what I also feared with new home builders.  Very eye opening that one of our own actually heard it happening.

Jul 27, 2010 10:39 AM #7
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Terry:  And they make more money.  Don't forget that motivating factor.

Jul 27, 2010 10:43 AM #8
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Nancy:  Happens all the time.  Of course, when the market turned, the builder LOVED us.

Jul 27, 2010 10:44 AM #9
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Anne:  Too many sad statements made in our business.

Jul 27, 2010 10:44 AM #10
Rainmaker
431,187
Bob Willis
Berkshire Hathaway HomeServices California Properties - Orange, CA
Orange County & L.A. County Real Estate Agent

What an interesting story, Chris Ann.  I popped by here to read your first blog.

Builders here will not cooperate with a commission unless the agent does accompany the buyers during the first visit.  So, I make sure all my buyers know not to go without me.

Dec 19, 2010 05:39 AM #11
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Bob:  It's sad to hear others in our industry want to cut us out for "the good of the buyer."

Dec 19, 2010 06:16 AM #12
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Chris Ann Cleland

Associate Broker, Bristow, VA
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