Using a real estate agent for buying from builder

[wvjules]

Do you use a real estate agent to buy from a builder or no? We looked at a gorgeous 4-level townhouse this weekend and fell in love. The builder is offering an $8000 credit towards closing costs if we use their preferred lender. Do you think we could get a better deal if we used a realtor? Would having a realtor provide us any advantage in this purchase?

 

[golfgal]

Do you use a real estate agent to buy from a builder or no? We looked at a gorgeous 4-level townhouse this weekend and fell in love. The builder is offering an $8000 credit towards closing costs if we use their preferred lender. Do you think we could get a better deal if we used a realtor? Would having a realtor provide us any advantage in this purchase?

The only thing a Realtor might be able to do in this situation would be to help through the closing or if there is an issue with the builder-but even then that REALLY depends on the Realtor. You can also use a real estate attorney for a fraction of the cost. Chances are the $8000 credit is what they would lose in Realtor fees so you probably can't do any better. Also, using their lender really doesn't have anything to do with the realtor. I would check around at a few banks, credit unions and mortgage companies for interest rates and closing costs and do a side by side comparison of THOSE fees to see if you can get a better deal.

 

[The Mystery Machine]

Do you use a real estate agent to buy from a builder or no? We looked at a gorgeous 4-level townhouse this weekend and fell in love. The builder is offering an $8000 credit towards closing costs if we use their preferred lender. Do you think we could get a better deal if we used a realtor? Would having a realtor provide us any advantage in this purchase?

Do you know where you are getting your mortgage loan from? You really need to shop around for that first.

That has nothing to do with a realtor. You can still use their lender and a realtor if you choose.

However I would still shop around for mortgage loans. The deal they are offering may be good but you might be able to find better.

 

[wvjules]

They have 3 preferred lenders they use. We haven't even looked or talked numbers yet. We will definately mortgage shop for the best deal.

I wasn't sure if using a realtor (or real estate attorney) would be beneficial when buying from a builder.

I did meant to make that 2 seperate issues/questions. Lending and getting a better "deal" (upgrades, etc) by using a RE.

 

[tlbwriter]

This reminded me of a horror story I read on someone's blog a long time ago. It was during the real estate boom, and most likely couldn't happen today. The blogger had gone through her builder's preferred lender and they ended up messing up somehow and were talking about missing the closing date. Her contract with the builder stated that the negotiated price was only good until the proposed closing date. If they had missed the date, she'd still be able to buy the house, but only at its NEW price, which would be several thousand dollars more (she knew of one buyer who actually did have to reschedule closing, due to the same lender, and ended up paying $40K more). So, like I said, this particular scenario probably couldn't happen today. But it does demonstrate that the preferred builder is not necessary competent or honest. I'd get good faith estimates from other lenders as well - like a previous poster said, you may actually get a better deal.

Forgot to mention... we didn't use a realtor when we bought from the builder.

 

[Christine]

wvjules,

In this area, no you do not need a realtor to buy a new home. The only time you would want to use one in this case is if you have a realtor buddy and you wanted him to get some of the commission.

New home builders will honor that if you are working with a realtor. Otherwise, the realtor will do nothing for you in this case.

I purchased my home through a builder many years ago (my dad was a realtor in MD but I did not use him as I bought my house in VA). I also used the builder's lender because their rate beat everyone elses. It was a good deal for me.

New home builders are also fairly non-negotiable on price. The best they will do, if desperate, is throw in some upgrades. A realtor can't help with anything on this.

 

[ccgirl]

Realtor here. If you want to use a realtor, choose one you don't have to pay commission to. My commission always comes out of the selling side (in this case the builder). As far as a better "deal"; usually new home construction is pretty set in stone. I bet the $8,000 credit is what the builder would pay in commission so they are rewarding you if you don't use one. Still get a home inspection and make sure you CYA. Realtors cannot tell you which mortgage company to use, at least in the state of MA, but they can give you a choice of no fewer than 3 mortgage companies that you may want to use.

Good luck.

 

[The Mystery Machine]

They have 3 preferred lenders they use. We haven't even looked or talked numbers yet. We will definately mortgage shop for the best deal.

I wasn't sure if using a realtor (or real estate attorney) would be beneficial when buying from a builder.

I did meant to make that 2 seperate issues/questions. Lending and getting a better "deal" (upgrades, etc) by using a RE.

We have done both. Found out that if you DON'T use a realtor then the builder is "acting as the realtor" and they get that money that would otherwise go to the realtor. So of course they do not want you to use a realtor.

So if you have a realtor then by all means, use them. You don't have to.

Will you get a better deal? Can't say. If you are building from the ground up, most likely not worth it. The deal is different from buying an exisiting home in that there is really no negotiation room.

If you are buying a model home (already built), maybe. A realtor will help you with the comps and pricing so you do not get ripped off in some cases. Esp. if you are new to buying real estate.

 

[wvjules]

Thank you all very much. We are going to talk more with the builder on Wednesday evening and go from there. I will do it without a realtor but will possibly have an RE attorney take a look at the contract and everything prior to signing. I'm am so excited about picking out everything. Right now they have a free granite kitchen upgrade special. WooHoo!

Of course this all depends on what we find out on Wednesday night. I would love to be able to move over the summer but the building we want hasn't even begun yet so... It overlooks a flood plain so we will always have a nice view of the hills since nothing can be built there.

ETA: We are giving up Hawaii next Christmas if we buy this home. We are a little sad about that but DD said we will be in a paradise every day so its worth it.

 

[dawson5]

What you are saying, sounds like you would be contracting to build. I would most definitely have a real estate attorney look over everything. I would research this and be aware of all possible scenarios.

 

[dis-happy]

Even if buying a new home, make sure you get a home inspection done!!!!! Put it into the contract too.

 

[Coach K]

We did not use a realtor when we bought from a builder. You probably should have a real estate lawyer look over the documents before you sign any paper work though. I don't know if this is true but I have heard that some builders write in the paperwork that when you sell, they will receive a portion of the sale-no matter how long it is until you sell (that is if they are still in business at the time). Buyer beware!!!

 

[Molliday]

We did not use a realtor when we bought from a builder. You probably should have a real estate lawyer look over the documents before you sign any paper work though. I don't know if this is true but I have heard that some builders write in the paperwork that when you sell, they will receive a portion of the sale-no matter how long it is until you sell (that is if they are still in business at the time). Buyer beware!!!

Say what??? I've sold new homes for two builders and I've never heard of such a thing.

To the OP, a Realtor can often negotiate the price, incentives or upgrades, however, you can do the same thing.

Where I live, the builder's contract is used, not the state's promulgated contract. The state's contract is to protect the consumer - the builder's contract is to protect the builder, so I would go over the contract with a fine-tooth comb before signing. This is where a Realtor might come in handy, if they're familiar with the contracts - a RE attorney would be even better.

And whatever you choose, as others have mentioned, GET IT INSPECTED before your final walk-through. Trust me on this one.