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Whether purchasing a home for the first time or the tenth time, you should always use a competent full-time Realtor. There are so many rules, regulations and laws involved in purchasing a new home, that you the consumer can easily be taken advantage of. The buyer does not pay for the services of the Realtor. If you are purchasing a new home directly from a builder, the builder pays a set commission to the Buyer’s Agent.
The buyer’s agent is there to work solely on your behalf. They should accompany you when you first visit the property, when the contract is being prepared, when you meet with the project managers, initial walk-through as the property is being built, once the property is completed and of course the Realtor should accompany you to the settlement table.
Builder’s Representative Responsibility
The builder’s rep is there to look out for the builder’s best interest. Most rep’s salaries are tied to the cost of the home as well as concessions to the buyer. The more money the rep saves the builder the more money they make. Do you feel confident negotiating with a builder who has built thousands of homes and whose sales rep is determined to get top price and not give an inch? Do you know which items can be negotiated?
Real life story of one of my clients
I assisted a husband and wife in purchasing their first home together. It was a high $475k+ property. The husband didn’t think a Realtor was necessary but the wife thought it was a good idea to have representation.
It took the builder about 4 months to build the property and deliver. The builder contract, as is customary, was prepared by the builder’s representative with all parties present…including me, the Realtor. Builders use a standard State template for their businesses. The contract is pretty straight forward, IF you are familiar with residential real estate lingo. Most people aren’t familiar…I’m just saying.
I gave the husband an addendum to take to his job for employment verification. He thought since the builder didn’t include it in their paperwork that it wasn’t necessary so he never had it signed by his employer. When the buyer’s final loan documentation and purchase documents were almost finalized, the bank sent us a copy of ALL documentation for review.
I immediately called the wife (who called the husband) about the form I had given him months ago. I told her it would be a sizeable savings if he only got the form completed and returned to the bank PRONTO.
Well, long story short, this addendum was for verification of employment as a Police Officer. This county in Maryland waived a total 1.4% of the sales price because of his employment status (1%) and because he was a first-time home buyer (.4%). The wife was ecstatic. The builder’s representative either didn’t know of this addendum or didn’t care because the representative works for the builder, NOT YOU.
Moral of the story…Get your own representation when purchasing a new home!