Buying New Home Without Realtor?

[justlearning]

Hello everyone,

We have been looking for new homes in the last two months. Currently we did not sign with any real estate agent but we met one through one of the open houses we went. We chatted a little bit casually he said he can look for new homes for us if we want and it does not cost us anything. We usually identify the homes via Zillow or Redfin then we ask him to schedule showing for us and we go to open houses by ourselves and talking to builders directly. He showed us a few homes.

Talking with a few builders so far they are not very positive dealing with buyers agent. One builder we talked today he was saying that we really dont need a real estate agent because we are looking to buy newly built home so real estate agent involvement is usually minimal and it puts a barrier between us and the builder because everything has to go through via real estate agent. This is our first home so we are looking and learning and we don`t know what involves as far purchasing a new home.

My questions:

Do we need to have a real estate agent representing us if we are buying a new home?

Does it really not costing us anything having our real estate agent as a buyer?

any advice you can offer from your own experiences?

Thank you.

[hrain1099]

I'm not sure if you NEED a real estate agent, but I personally don't see many downsides. I just purchased my first home with my wife, and we had an amazing agent who really went above and beyond for us -- dealing with our crazy doctor schedules, videotaping houses if we couldn't get to them to see ourselves, dealing with us being out of the city we were purchasing in and our families who live there being a bit overlying involved, etc. She even gave us a gift card to our favorite restaurant as a congratulations after we purchased (and so so many more little and big things that made a difference). And she didn't cost us one cent -- entirely covered by the seller.

Do your best not only to find someone knowledgable, but also someone who will put up with a million questions (you will have them), who knows the city you're looking in, and who won't try to oversell you...if you know how much you want to spend, or what kind of house you're looking for, be honest with them and make sure they show you the kinds of houses you're looking for.

 

EDIT to say: I don't have any idea how different it is for a newly built home, though, sorry!

[Dreamgiver]

Seller pays agent commission so being “free” to the buyer is normal. Not sure what the agent involvement is when buying a newly built home. Any real estate agent will want a buyer’s business because they can help show you “used” homes even though you are looking for new ones. Understand, even though they are really nice, they are courting you to make money. Nothing else.

[CM]

The seller, in this case the builder, has to pay the realtor's commission. You might be able to negotiate a lower price if you work without a realtor.

This happens often with FSBO (for sale by owner) offerings. The buyer and seller can transact without an intermediary and split the (usual) 6% commission savings between them.

On the other hand, if you are not savvy, and you do not use the absence of a realtor to negotiate a lower price, then you are better off using an experienced buyer's agent who may provide some useful help throughout the process.

[KPInvestor]

Where I live, its pretty standard that a new home builder will offer broker commission to the buying agent.  In my area it ranges from 10k-50K depending on the builder (I live in HCOL area).  Nearly EVERY agent in this area will offer money back to you if you let them "sign" you in.  With new builds, the builders usually have all their "in house" people do all the paper work.  Therefore your buying agent will have very little to nothing to do in this transaction.  Thus they are comfortable giving you a large portion of their commission.  Furthermore because so many agents are willing to do this, they almost have to because you can simply move onto another agent willing to do this.  I suppose getting something for doing nothing is better than getting nothing for doing nothing.  In the past I have negotiated a minimum of 50% to a max of 75% of the commission back to me.  Because it is so easy to find an agent willing to give a part of the commission back, it is almost expected by many buyers.  Some do not know and thus they kind of get screwed if they do not mention it.  If you can find an agent willing to do this, make sure you get it in writing.  Also some agents may tell you this is a taxable event.  It is not.

[StarTrekDoc]

Buyer's Co-op Agent is the usual saying here for a buyer's agent of a new home that the seller (builder pays to the agent).  It's not the full 2.5-3% that's usual for an used home.   As mentioned, most new homes don't need an agent whatsoever since there's a builder home warranty, financing is best through the builder, and closing costs is cheapest through their escrow arrangements anyways.

Is you use Redfin, use their agents and you'll get the commission back as is for all the regular resell units.  They do a pretty good job on the coordination of the sale.   We haven't bought a new home in awhile since before the days of Redfin, so don't know if represent on new home sales.

FYI - new home sales must be with agent on the FIRST visit since it's the foot traffic that the builder wants and counts as the referral.

[justlearning]

thank you all for your input and comments. Also i learned that most of the builders in my area running family business. For example: husband is a builder and wife does real estate on the side other than her primary profession. Usually in the contact if the buyer does not have a real estate agent commission goes to builder`s real estate agent so more profit for the builders family. I dont know if this gives more leverage to buyer to negotiate more but it seems like this maybe one of the reason some builders does not want you bring your own real estate agent.