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Agency Relationship and the Builder's Agent

By
Real Estate Agent with John L. Scott Sandy

A few days ago, I wrote a short blog about the benefit of a buyer's agent when working with a builder. That value of a buyer's agent is pretty apparent.  After reading Don Rich' blog titled, Let's Buy a Brand New House, I wanted to raise an issue that I have been stewing over.  I am not referring to independent agents who work for a builder.  I am referring to the builder's agents who are W-2 employees (not independent contractors).

When I am working with a builder's agent, I like to be just as involved as I would be otherwise. It is sad to hear Laurie Mindnich's comment made on Don's above mentioned blog:  "In my many years of representing builders, I can count on one hand a Realtor that did anything beyond the initial contract (except, of course, checking on the closing date).  Most agents arrive and leave, and the rep on site...does all of the contact and follow up."  I can personally say that I have never treated a client this way.  It is my job to manage my client's transaction, take care of any issues that arise and care for their emotions.  Anything less would be unprofessional.

I have worked with builder's agents who were great, and builder's agents who were not so great.

But what about the builder's agent who tries to go around you?  I had an experience once with a builder where there was no respect for the agency relationship that I have with my buyer.  After the offer had been submitted, I made a few phone calls over the period of a few days to the builder's agent regarding the status of the offer.  The builder's agent didn't call me, but instead called my buyer to let them know that their offer had been accepted.  This particular builder's agent wasn't returning my phone calls and was trying to deal directly with the buyer.  I called, finally got a hold of him and explained that it is improper for the seller's agent to contact the buyer's directly when they have their own representation.  This is, in essence, an example of interfering with agency relationship. 

When the builder's agent attempts to undermine the agency relationship between the buyer and the buyer's agent by "going around" the buyer's agent, I can see how it can appear to the buyer that the builder's agent is the one to go to when a problem arises.  A good builder's agent will refer the buyers back to the buyer's agent to answer their questions and concerns.  The builder's agent should not be contacting the buyer's directly.  That is one of the many reasons why they have an agent.

When I bring a buyer into a new construction site that has an on site agent, I am the buyer's agent, and the builder's representative is just that...the builder's representative.

JMHO

Comments(3)

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Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Valerie your humble opinion is right on!  I remember my first construction deal and how they kicked me out at walk through.  I was appalled and took that up with my broker.  He said "you just drop your buyers off at the door and let them do the rest."  Uh uh, not me!  I refuse to let them take control, I am REPRESENTING THEM! 

Another time my client was ready to go into contract.  THe girl was new and the market was crumbling (this was last spring) and she had never done her builder's contract before.  Can we do it tomorrow?  NOPE!  We are doing it TODAY before they change their minds!  She forgot to tie the incentives to the builder's lender :snicker:

I am actually working with a builder rep right now that is AWESOME and she seems to respect the whole agency aspect.

If a builder wants to co-op, they will respect agency.  If they want us to drop them off the door they should give us a referral fee.  Everyone deserves representation, not just the builder!

Feb 22, 2007 12:25 PM
Valerie Baldwin
John L. Scott Sandy - Gresham, OR
Harvey, Gresham Oregon Real Estate

Renee,

Thanks for your confirmation of my actions here.  I take agency very seriously and I can tell that you do too.  I am with you on the referral fee thing, but I feel that the sheer volume that these large builders do would not provide my clients with the best service and represention that they deserve.

Feb 22, 2007 01:35 PM
Todd Hueffed
Champions Real Estate Services - Everett, WA

I just recently wrote a blog about builders trying to get agents comments on how they feel about builders......during the normal markets they treat agents horribly and our clients almost as bad but then when the market tightens they beg for our buyer business......when will they learn....

Please check out my blog DO YOU HATE BUILDERS as I would love to hear what agents think in other territories......

Todd Hueffed

www.ThatHomeZone.com in partnership with Keller Williams North Seattle

Nov 01, 2007 06:16 AM