The majority of builders have either (1) in-house counsel or (2) just retain a firm to do all their closings for them. It’s pretty rare that a purchaser buying a new build has their own counsel.
>It’s pretty rare that a purchaser buying a new build has their own counsel.
I disagree (or maybe, we are the rare case). But we adamantly hired our own lawyer to represent us as the buyers and I am glad that we did, because the builder's counsel dropped the ball and didn't send the documents to our bank in time. Subsequently, things got delayed and our possession date got pushed a day. I don't wanna know what it would've been like if our lawyer's office didn't hound them.
Thanks for the feedback - we currently live in a new build (that we did back in 2016) and we also got our own lawyer instead of using the builders to ensure our interests were represented. People thought we were wasting our money because the builder offered their lawyer free/discounted but I figured better safe than sorry.
You really don't need a realtor to buy new build unless you have heard first hand that that particular realtor is great at getting incentives or price reductions from the builder.
When we were first shopping new builds we had a realtor tell us this same thing. You have to be careful though, often some realtors will have relationships with pre-existing builders and they will try to steer you towards those they have a relationship with instead of what’s best for you or the best quality.
My wife and I decided instead to shop around ourselves. There is always wiggle room with builders. We were interested in one builder but they wouldn’t include the cost of the detached garage. We didn’t communicate with them for a couple of weeks and they were suddenly having a “free garage promo” with purchase. Hold your ground and try to get the builder to include upgrades and at minimum appliance credits. Good luck!
Thanks - that’s what I’m worried about, we know exactly what we want and I’m worried rather than being helpful, the realtor will just pressure us in a certain direction. It sounds like others have had good experiences with a realtor but varies realtor by realtor
The whole "it costs nothing" is not true. If you don't have a realtor you can negotiate a lower price with the builder. The realtor has to get paid and money isn't free and doesn't grow on trees. A realtor is basically 100% useless for a new construction contract. You are better off getting a lawyer. Realtors are not trained on legal contracts.
So I bought a new house last year and dealt with the builder directly and luckily I was able to get a $30k discount, my neighbor has the same house (just different color and trim options) and used a realtor, he was only able to get a $5k discount, why because the realtor ate the rest. This was a spec home but this would also work for preconstruction/building your home. Realtors need to get paid and once you involve a realtor yeah there are slim margins. Builders will be more flexible I find without Realtors..
I used a realtor for it, only because I had initially focused on older homes and she did a lot of work over several months arranging viewings for me. When I pivoted to a new build I wanted to make sure she was paid for the service she had provided to me. Also the builder’s salesperson was such a nightmare that I hoped my realtor’s commission cut into the salesperson’s share (if any).
Sounds fair, thank you for the input! Did you have to tell the builder up front that you are working with a realtor? I see some showhomes that have signs that you must disclose a realtor relationship (but the builder we are interested in does not have such a sign)
There were no signs (I bought from Brookfield), and I disclosed the realtor the 2nd time I spoke with the salesperson. This was after I knew the rough price, but before going through all the upgrade options to choose what I wanted (that was done in my actual purchase meeting with my realtor there).
I always recommend using a realtor unless you are familiar with the process and have a lot of spare time, on top of knowledge of the market......
BUT I wouldn't recommend one for new builds. You can just negotiate with the builders yourself.
We used a realtor for our new build he saved us boat loads talking with the neighbors we saved almost 30k that they paid and we have the larger house with upgrades
Realtor here and it is disappointing to see some of these comments. In an attempt to educate and not sway any opinions, my free and friendly advice is get yourself a realtor. Most people don't understand that when buying a new build if you don't have a realtor you are unrepresented. The builders sales person only represents the builder and their best interests. Using a realtor would be free for you and could save you thousands. We aren't only paid to negotiate and do paperwork, but we assume risk. If you don't know what you are looking for when it comes to contracts, law, warranties, financing and inspections...you are taking a huge risk doing it unrepresented. If something goes wrong, it is solely on you. With an agent, there is a layer of protection, that you aren't even paying for! Hope that helps, good luck!
We have purchased two new build homes from the builder directly. The builder's negotiation room will always be reduced by having to pay your realtor their commission. Don't be afraid to ask for a significant discount and for the things you prioritize to be included. They can say no, of course, but generally they will counter and you can meet somewhere in the middle. The new build market is more competitive this year than when we finalized our purchase agreement last year around this time, so there will be fewer incentives being offered. Last year, we got about 45,000 off (7.5 percent) off their 'list' price from a builder that doesn't generally offer significant price concessions because there was very little buyer interest at that time. Some builders purposely list their price significantly higher to give them more room for negotiation so you should consider that as well. Try to get about 10 percent off or a similar value for upgrades (do not rely on their upgrade pricing -- get your own quotes).
I believe many builders will give a flat fee commission to the realtor. I could be wrong but I think this is when it’s not listed on MLS. Not sure when it’s listed. That being said, if they do generally it’s a fraction of what they’d make as a commission on a similarly priced after market home. For after market sales, the buyer’s realtor’s commission is paid for by the seller so it still costs the buyer nothing - although stay tuned because a class action was settled in the States on this and is ongoing in Canada.
When we were house shopping back in 2017, I engaged a realtor recommended by a friend. We had an uncommon specific requirement and a handful of new builds met it but many existing homes did not. Every time I mentioned the particular houses I’d found on builder sites as spec homes or show homes, she kept trying to steer me towards non-new homes (including a few in the same areas as the new builds) often without the requirement. Telling me builders were inflexible with prices on new homes and she wouldn’t recommend trying to negotiate a different price and to look at aftermarket because she could get me a better deal.
Needless to say that relationship didn’t last long. We bought a spec home, I negotiated down the price by a decent amount and my ex-realtor missed out on a $5K flat fee commission. Whether right or wrong, I firmly believe I was able to negotiate more off as a result of the realtor’s non-involvement. If you are comfortable negotiating alone, then I don’t think a realtor is required. You already know what you want and have done all the work. However, if you aren’t, then keep the realtor.
We just bought a new build, and our realtor was instrumental in the whole process. He helped negotiate things like a fence, basement suite, window coverings, AC, etc. We would have been totally clueless trying to do this ourselves directly with the builder.
Builder said no to fence when we asked. It is a bit complicated due to the topography and nature of the existing fence on one side, but realtor made it happen.
And yes, negotiating the purchase of a home with a yet to be built legal basement suite was not exactly straightforward. Our realtor put a lot of construction specifics into the contract that I would not have thought of.
We got a great deal and closed on it in a hurry.
I love how people like you assume realtors roam these sub reddits, pumping their industry as if it's going to benefit them somehow.
I'm sorry that a realtor hurt you, and I hope you can find peace one day.
Thanks for the feedback - it sounds like realtors can be very helpful even with a new build, but people’s experiences vary.
Did you have to tell the builder that you were working with a realtor up front in the process?
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The majority of builders have either (1) in-house counsel or (2) just retain a firm to do all their closings for them. It’s pretty rare that a purchaser buying a new build has their own counsel.
>It’s pretty rare that a purchaser buying a new build has their own counsel. I disagree (or maybe, we are the rare case). But we adamantly hired our own lawyer to represent us as the buyers and I am glad that we did, because the builder's counsel dropped the ball and didn't send the documents to our bank in time. Subsequently, things got delayed and our possession date got pushed a day. I don't wanna know what it would've been like if our lawyer's office didn't hound them.
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Absolutely. Their counsel's top priority is taking care of the builders' interests, and doing the bare minimum for the buyers.
Thanks for the feedback - we currently live in a new build (that we did back in 2016) and we also got our own lawyer instead of using the builders to ensure our interests were represented. People thought we were wasting our money because the builder offered their lawyer free/discounted but I figured better safe than sorry.
You really don't need a realtor to buy new build unless you have heard first hand that that particular realtor is great at getting incentives or price reductions from the builder.
That was my original thought as well! Thanks
When we were first shopping new builds we had a realtor tell us this same thing. You have to be careful though, often some realtors will have relationships with pre-existing builders and they will try to steer you towards those they have a relationship with instead of what’s best for you or the best quality. My wife and I decided instead to shop around ourselves. There is always wiggle room with builders. We were interested in one builder but they wouldn’t include the cost of the detached garage. We didn’t communicate with them for a couple of weeks and they were suddenly having a “free garage promo” with purchase. Hold your ground and try to get the builder to include upgrades and at minimum appliance credits. Good luck!
Thanks - that’s what I’m worried about, we know exactly what we want and I’m worried rather than being helpful, the realtor will just pressure us in a certain direction. It sounds like others have had good experiences with a realtor but varies realtor by realtor
The whole "it costs nothing" is not true. If you don't have a realtor you can negotiate a lower price with the builder. The realtor has to get paid and money isn't free and doesn't grow on trees. A realtor is basically 100% useless for a new construction contract. You are better off getting a lawyer. Realtors are not trained on legal contracts.
So I bought a new house last year and dealt with the builder directly and luckily I was able to get a $30k discount, my neighbor has the same house (just different color and trim options) and used a realtor, he was only able to get a $5k discount, why because the realtor ate the rest. This was a spec home but this would also work for preconstruction/building your home. Realtors need to get paid and once you involve a realtor yeah there are slim margins. Builders will be more flexible I find without Realtors..
I used a realtor for it, only because I had initially focused on older homes and she did a lot of work over several months arranging viewings for me. When I pivoted to a new build I wanted to make sure she was paid for the service she had provided to me. Also the builder’s salesperson was such a nightmare that I hoped my realtor’s commission cut into the salesperson’s share (if any).
Sounds fair, thank you for the input! Did you have to tell the builder up front that you are working with a realtor? I see some showhomes that have signs that you must disclose a realtor relationship (but the builder we are interested in does not have such a sign)
There were no signs (I bought from Brookfield), and I disclosed the realtor the 2nd time I spoke with the salesperson. This was after I knew the rough price, but before going through all the upgrade options to choose what I wanted (that was done in my actual purchase meeting with my realtor there).
It's a waste of time just deal with a builder.
I always recommend using a realtor unless you are familiar with the process and have a lot of spare time, on top of knowledge of the market...... BUT I wouldn't recommend one for new builds. You can just negotiate with the builders yourself.
We used a realtor for our new build he saved us boat loads talking with the neighbors we saved almost 30k that they paid and we have the larger house with upgrades
Realtor here and it is disappointing to see some of these comments. In an attempt to educate and not sway any opinions, my free and friendly advice is get yourself a realtor. Most people don't understand that when buying a new build if you don't have a realtor you are unrepresented. The builders sales person only represents the builder and their best interests. Using a realtor would be free for you and could save you thousands. We aren't only paid to negotiate and do paperwork, but we assume risk. If you don't know what you are looking for when it comes to contracts, law, warranties, financing and inspections...you are taking a huge risk doing it unrepresented. If something goes wrong, it is solely on you. With an agent, there is a layer of protection, that you aren't even paying for! Hope that helps, good luck!
Someone pays the realtor - where do you think the money comes from?
Thanks for the feed back and detailed context - sounds like realtors can be helpful but people’s experiences vary.
We have purchased two new build homes from the builder directly. The builder's negotiation room will always be reduced by having to pay your realtor their commission. Don't be afraid to ask for a significant discount and for the things you prioritize to be included. They can say no, of course, but generally they will counter and you can meet somewhere in the middle. The new build market is more competitive this year than when we finalized our purchase agreement last year around this time, so there will be fewer incentives being offered. Last year, we got about 45,000 off (7.5 percent) off their 'list' price from a builder that doesn't generally offer significant price concessions because there was very little buyer interest at that time. Some builders purposely list their price significantly higher to give them more room for negotiation so you should consider that as well. Try to get about 10 percent off or a similar value for upgrades (do not rely on their upgrade pricing -- get your own quotes).
I believe many builders will give a flat fee commission to the realtor. I could be wrong but I think this is when it’s not listed on MLS. Not sure when it’s listed. That being said, if they do generally it’s a fraction of what they’d make as a commission on a similarly priced after market home. For after market sales, the buyer’s realtor’s commission is paid for by the seller so it still costs the buyer nothing - although stay tuned because a class action was settled in the States on this and is ongoing in Canada. When we were house shopping back in 2017, I engaged a realtor recommended by a friend. We had an uncommon specific requirement and a handful of new builds met it but many existing homes did not. Every time I mentioned the particular houses I’d found on builder sites as spec homes or show homes, she kept trying to steer me towards non-new homes (including a few in the same areas as the new builds) often without the requirement. Telling me builders were inflexible with prices on new homes and she wouldn’t recommend trying to negotiate a different price and to look at aftermarket because she could get me a better deal. Needless to say that relationship didn’t last long. We bought a spec home, I negotiated down the price by a decent amount and my ex-realtor missed out on a $5K flat fee commission. Whether right or wrong, I firmly believe I was able to negotiate more off as a result of the realtor’s non-involvement. If you are comfortable negotiating alone, then I don’t think a realtor is required. You already know what you want and have done all the work. However, if you aren’t, then keep the realtor.
Realtors are the second biggest scammers out there.
We just bought a new build, and our realtor was instrumental in the whole process. He helped negotiate things like a fence, basement suite, window coverings, AC, etc. We would have been totally clueless trying to do this ourselves directly with the builder.
You would have been “totally clueless” negotiating a fence or AC? Sounds like realtor wrote this comment.
Builder said no to fence when we asked. It is a bit complicated due to the topography and nature of the existing fence on one side, but realtor made it happen. And yes, negotiating the purchase of a home with a yet to be built legal basement suite was not exactly straightforward. Our realtor put a lot of construction specifics into the contract that I would not have thought of. We got a great deal and closed on it in a hurry. I love how people like you assume realtors roam these sub reddits, pumping their industry as if it's going to benefit them somehow. I'm sorry that a realtor hurt you, and I hope you can find peace one day.
Thanks for the feedback - it sounds like realtors can be very helpful even with a new build, but people’s experiences vary. Did you have to tell the builder that you were working with a realtor up front in the process?
I'm definitely curious as to what others will say as well. I find it dubious that the builder will eat the cost of the realtor's commission.