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!!