@Sk323i wrote:
I'm interested in a new home that is built by a big builder named DR Horton.
I'm in a communcation with a real estate agent who is looking at other properties in the area but not this one by DR Horton.
Should I mention my interest in this property? Yes, tell your agent any property you are interested in - including new construction.
What are the implications if she shows me to the development? The builder pays her broker a structured commission. This commission is built into the sales price of all the units right from the beginning. The builder assumes X% of the homes will be sold by outside agents so even if you come in without an agent, you get the same sales price - but not necessarily a better deal at all. Most agents that work with new construction know what the builder will provide in freebies (either in extras or closing costs).
Does the builder even allow/recommend agents? DR Horton cooperates with real estate agents and most, but not all, builders do. They solicit us endlessly to show their properties. However, builders do not recommend outside agents. The sales reps onsite are sellers' agents and they ONLY represent the seller. The seller's agents have a fiducerary duty to get the best deal they can for the seller and not for the buyer.
Would it ultimately just cost me more in commission if this agent accompanies me to the build site office/and or looks at the new property with me? No.
What types of negotiations happen when dealing with a big builder like DR Horton? The builder is going to not want to negotiate on sales price. However, they will 'throw in' extras at no charge up to a certain $ amount. This depends on your negotiating skills and the specific unit you are interested in purchasing. Some of the properties will have greater allowances than others.
You are not paying the commission. The sellers representative is required to get the best possible deal for the seller as possible. The contract that you sign is a builders contract and it has clauses that are completely different from a normal real estate contract. It is common for the builder to push over some of the builders closing costs (normal closing costs) over to the buyer side. In some markets the builder pushes over more costs than other markets - this is the true effect of "whatever the market will bear".
If the builder can get away with you paying top dollar and no seller contribution, that is what their sales reps will push for as it is their duty to get the builder top dollar. The builder is their client, not the buyer. In fact, it is contrary to license law that the consumer (buyer) is represented by a builder's agent. Check your state's real estate license representation laws so you know the difference.
What do you have to lose by having your own representation (Realtor)? Nothing. What do you have to gain? Quite a lot.
EDIT: I am a Realtor. I have been on both sides of that desk - representing builders (at one time) and also a general real estate agent representing consumers (now).
I am not biased. You do want an experienced agent because the agent will be able to show you resales and new construction so you can make the right decision for your needs and negotiate effectively whichever direction in which you decide to purchase.
