Big trouble? I hear they usually tell the buyer(w/o a agent) the commissions saved on the buyer side can go to upgrades. Why do they do it?
Michael, because the builder has huge profit margins built into the upgrade pricing (generally around 50%++). In traditional real estate/resale, it costs the seller the same amount if there is one agent or two. In new homes, this is not the case. The builder does not pay their agent more if there is no buyer agent on the deal, so they do save on their bottom line if there is no buyer's agent.....even if they give the buyer an equivalent amount in upgrades.
The sales agent also wants to simply 'close' the buyer today....the mentality of the new home sales agent is that a buyer's agent just gets in the way....especially in a market like ours where it is a seller's market. Based on my experience, the builder feels that if a buyer went to a new home subdivision on their own, they don't deserve representation as the BUYER was their OWN procuring cause. Most builders pay a co-broke to agents to BRING their clients to the sales office. Once they walk through those doors, the builder feels that the buyer's agent's job is done.
I can tell you, it is not uncommon that this is the case with many buyer's agents....but with a savvy, experienced agent who knows how the transaction should go from start to finish, and what red flags to watch for, how to talk to the builder/builder's agent/field crew/superintendent if things don't go as planned, etc. etc....this is NOT the case.
Comments (2)Subscribe to CommentsComment