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!!!