Representation!! How Much Does A Buyer's Agent Need To Know??

By
Managing Real Estate Broker with RE/MAX Executive Realty 104763
http://activerain.com/droplet/5cKR

One of my favorite topics is new construction.  That was my niche for decades, and I need to admit, I miss it. I miss dealing with buyer agents and doing my job as a listing agent.  What exactly is the job of an agent who represents the builder?

 

 

If I had a dollar for every buyer’s agent who visited one of our construction sites to show a new home or condo and knew nothing about selling new homes, I could pay cash for a new Rolls Royce. Most do not understand, nor are they thinking about, what their buyers are spending for additional extras. Some are just thrilled they found a property the buyer loves, and they can stop beating the pavement. 

 

 

Let’s discuss what a listing has to offer. One of the listing agent’s jobs is to “sell extras” for the builder.  It's an important job.  My job as a listing agent was to put as much money in the builder’s pocket as possible, and I did a fine job of that!!  I would promote and “sell” the reason for the buyer to add a variety of optional extras to his/her package. The builder would profit significantly, above and beyond his standard profit. The additional extras were priced “at what the market would bear.” That was usually well beyond what a reasonable profit would be.

 

Many of these upgrades and optional extras were not going to benefit the buyer, other than the enjoyment of those items.  The financial gain, when the property sells in the future, will not be a result of those items. Whose job is it to know and explain this information?  Not mine!!! I represented the builder.  I was the listing agent.

 

Buyers should have an awareness of this topic, and when selecting a buyer’s agent to represent them in their quest to secure a new home, select a buyer’s agent who knows new construction and can give guidance with selecting optional extras that will bring a return in the future and/or include a few extras in the sale price.  That’s a major role that a buyer’s agent plays, when creating a new construction package for their buyer clients.

 

The buyer agents who accept OUR direction on spending the buyers’ money are not doing justice for their buyers.  However, they certainly DO make us look good in the eyes of OUR builders!!!

 

 

I’ll give you one example. The electrical upgrade that I could close all of the buyers on was the wall switch that would lower the chandelier to the floor for easy cleaning and changing light bulbs.  The electrician had to climb a ladder for the builder to install the chandelier.  This extra meant he purchased an extra switch and some wiring, but he also had to climb that ladder several more times!!!  This was in the very early 2000’s. I would suggest to the builder to charge $2,500 for that wall switch upgrade. Nice profit for the builder, and buyers who used buyer agents who were not well-versed in selling a new home would pay it rather than including it in the offer to purchase package.  A few did but most did not.

 

Just another thought for the moment…and I do miss working directly with builders!!

Posted by

       

Barbara Todaro, sales manager of RE/MAX Executive Realty 

Marketing Agent for The Todaro Team

308 W. Central St...suite E

Franklin, MA 02038

508-520-9881

www.todarosellsfranklinma.com

Exclusive Marketing Agent for The Todaro Team

 

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Ambassador
2,934,830
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

I love that assembly to flip a switch and bring down a foyer chandelier too.

Jun 12, 2018 07:09 PM #13
Rainmaker
2,709,952
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Barbara you are preaching to the Choir, I have been saying all the "must have don't need" is picking your pocket if you are a buyer, some listen others do not...and some agents are sleeping at the wheel in their Fiduciary Responsibilities, Endre

Jun 12, 2018 11:40 PM #14
Rainmaker
2,437,071
James Dray
Fathom Realty AR LLC - Bentonville, AR
Exceptional Agents, Outstanding Results

Morning Barbara.

Another topic for us to discuss at a future meeting.  As usual going to bookmark this one.  thanks

Jun 13, 2018 02:29 AM #15
Rainmaker
4,265,070
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Kathy Streib and when that home was being built, a buyer's agent who is well-versed with new construction would have written that detail into the buyer's package to be included at n/c.....

Will Hamm I miss working with builders....

Jun 13, 2018 03:16 AM #16
Rainmaker
4,265,070
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Chris Ann Cleland actually, every new home with a 2 story foyer should have one...

Endre Barath, Jr. most agents do not know the product and the builder makes his/her money on that agent's client....

Jun 13, 2018 03:18 AM #17
Rainmaker
4,265,070
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

James Dray I'm so happy someone gets some mileage on my info....always glad to hear that, James...by the time you finish all of your discussions with your agents, YOU'LL be an authority on many topics in real estate.... that "ups" your value incredibly!!!! good for you.

Jun 13, 2018 03:20 AM #18
Rainmaker
3,998,661
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Barbara, I hope home buyers will read this post. It is im to work with a good buyer agent .

Jun 13, 2018 03:20 AM #19
Rainmaker
4,265,070
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Gita Bantwal it's the a buyer's advantage to select a buyer's agent who is worthy of showing them property and will do them justice....

Jun 13, 2018 03:21 AM #20
Rainmaker
2,759,678
Sally K. & David L. Hanson
Keller Williams 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

SO true...most agents are not aware of what is or is not in the base package of new construction and that when you visit a model...what you see is not what you get !

Jun 13, 2018 03:30 AM #21
Rainmaker
4,265,070
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Sally K. & David L. Hanson (Sally).... and the buyer takes it on the chin....

Jun 13, 2018 03:35 AM #22
Rainmaker
2,834,697
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Condo & Home Sale Specialists

Here it is very unusual not to have preimums on the lots. Last one we sold was $175,000 extra for the lot and the average was $200,000 additional!

Jun 13, 2018 04:16 AM #23
Rainmaker
4,265,070
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

that doesn't work in our area... we focus on the contruction and that's where the builders make their money... Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400 (sheila)

Jun 13, 2018 04:21 AM #24
Rainmaker
2,881,821
Michael Jacobs
Coldwell Banker Residential Brokerage - Pasadena, CA
Los Angeles Pasadena Area Real Estate 818.516.4393

Hello Barbara --- the emotional aspect needs to be set aside and logic needs precedence.  If a buyer doesn't grasp this concept calmer and more knowledgeable minds need to step in.  

Jun 13, 2018 07:55 AM #25
Rainmaker
4,265,070
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Michael Jacobs that's the problem.... all minds do not add up to that profile.... 

Jun 13, 2018 03:49 PM #26
Rainmaker
529,965
Carolyn Roland-Historic Homes For Sale In Delaware and S. Chester County PA
Patterson-Schwartz Real Estate - Wilmington, DE
Carolyn Roland, GRI, CRS

I do not like to sell new construction because it is set up to benefit the builder only. We can't use our State agreement of sale. They all have their own contracts and you need a lawyer to figure out how your buyers can end up happy campers with what they want and need and no more. And lot premiums are always lying in wait in our area.

Jun 13, 2018 08:40 PM #27
Rainmaker
452,858
Terry McCarley
REMAX Realty Team - Cape Coral FL - Cape Coral, FL
REALTOR, SRES, CDPE - Cape Coral, FL

I have never worked for any builders but have represented buyers in the purchase of a new home.  I have been very successful at getting the buyers lots of extra upgrades at no cost.  Some of the builders here won’t allow us to represent the buyers if they happen to visit the sales center without their agent with them even when the buyers told them straight up they had an agent so that has definitely caused issues

Jun 14, 2018 05:57 AM #28
Rainmaker
884,069
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

I so get this information. Great post as always!  I always tell my new construction buyers that I go to every appointment.  I know the difference in prices and can tell them that something might be cheaper after closing than adding it to their mortgage.  Love this post.  Makes me want to write a post to buyers of why they need an agent for new construction - best get on it!

Jun 14, 2018 08:39 PM #29
Rainmaker
345,647
John Wiley
Right Move Real Estate Group- EXP Realty - Fort Myers, FL
Lee County, FL Real Estate GRI, SRES,GREEN,PSA

Thanks Barabara for a very honest discussion of the need for buyer's agent to be knowledgeable about new construction.

Here in Florida, many people want a pool. If the builder includes the pool in their package they may charge $60,000. But if the buyer gets their own pool company to install it might be $30,000. 

As you illustrate, we are not talking about pocket change. 

Every buyer of new construction needs their own agent to guide them through the process.

Thanks for a great post.

Jun 16, 2018 05:53 AM #30
Rainmaker
4,265,070
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Carolyn Roland-Historic Homes For Sale In Delaware and S. Chester County PA new construction is not so one-sided here.... the big national builders are no longer in my town....the town building dept was not happy with them and made it known....our local codes far exceeded what they were accustomed to....

 

Jun 16, 2018 07:16 AM #31
Rainmaker
4,265,070
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Terry McCarley that should be challenged in court by a buyer who wants buyer representation.... 

Jan Green that's a good post to write .....

John Wiley buyers need their own representation.... the more posts that are written about that topic, the better the chance of every buyer reading one...

Jun 16, 2018 07:20 AM #32
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