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rated:
I have looked at a few new construction townhouse communities recently, and visited the sales offices without a real estate agent. I never thought about having agent representation just for walking into a sales office, but now I've been thinking about it.

Thoughts online are mixed. I was thinking about doing my own negotiations, and many people have apparently done this successfully. I'm a good negotiator/haggler, and I've done a lot of research on the whole buying process. 

Any unbiased opinions on this? (A lot of the people online advocating for using a real estate agent are real estate agents, so I'm taking that information with a grain of salt.) Your thoughts and advice are appreciated.

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We bought a new home last year. We used an agent since my relocation bonus gave us extra money toward closing costs/loa... (more)

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rated:
Use a rebating agent. Typically, you can negotiate upgraded options or closing costs on new construction but not the sales price. If the builder gives you a discount on the sales price, it now lowers the price for every other unsold unit. If you are buying an already finished unit, a rebating agent will likely get you the best results.

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We didn't use a real estate agent when we built our current home.

We had consulted a part-time real estate agent who tried desperately to steer us into buying in a different development. The prices there were higher, probably because that builder would only sell his new construction homes through the real estate agent. High-pressure sales with a take-it-or-leave-it attitude. Fortunately, that agent was still in the training phase of his new career and didn't know what he was doing. He neglected to have us sign a contract, so when we learned of another builder in the same area who dealt directly with customers, we checked it out. We found lower pricing for essentially comparable homes and a willingness to work with us to make the home what we wanted it to be.

Really, there wasn't much to negotiate on. They gave the base price for the various models, plus costs for any additional options. We chose what we wanted, they itemized it all in the purchase contract, and we signed. 3 months later, we moved into our new home. That was 20 years ago.

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The only use I have for a realtor is access to real time MLS and showing me houses. Neither applies here.

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zhelder said:   I never thought about having agent representation just for walking into a sales office, but now I've been thinking about it.But will they actually sell to you without an agent ?

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xoneinax said:   
zhelder said:   I never thought about having agent representation just for walking into a sales office, but now I've been thinking about it.
But will they actually sell to you without an agent ?

  Why wouldn't they? 

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If you've already visited a community and filled out a registration form, they won't let an agent represent you.  They usually have a disclaimer that they co-operate with realtors only if they accompany the client on the first visit.

Otherwise, I agree with the suggestion to use a rebating realtor. You don't get a lot of negotiating power with or without a realtor on new home sales.  Once when we bought one without a realtor, we asked for a credit back because of it, and they gave us $600 in appliance upgrade credit.  But they saved almost $6k on the $200k house by not having to pay a buyer's agent.

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I'll throw out another opinion... we used a RE agent for new construction and she was able to negotiate a $15k discount on the sale price that I don't think we may have gotten otherwise (based on discussions with neighbors who bought similar properties).

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BigFatCat said:   I'll throw out another opinion... we used a RE agent for new construction and she was able to negotiate a $15k discount on the sale price that I don't think we may have gotten otherwise 
  How?

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BigFatCat said:   I'll throw out another opinion... we used a RE agent for new construction and she was able to negotiate a $15k discount on the sale price that I don't think we may have gotten otherwise (based on discussions with neighbors who bought similar properties).
  Maybe you coulda got a $20K discount on the sale price if you didn't have a RE agent. Instead of paying the agent $25K in fees the seller would have been happy to give you a $5,000 bigger discount.

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bbr said:   Use a rebating agent. Typically, you can negotiate upgraded options or closing costs on new construction but not the sales price. If the builder gives you a discount on the sales price, it now lowers the price for every other unsold unit. If you are buying an already finished unit, a rebating agent will likely get you the best results.
  
That is what we did. The builder would not negotiate from list prices but we used a real estate agent and worked out that we will get some % back from his commission. I didn't negotiate too high a % back since the same agent did a lot of leg work to show me other houses etc.

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use a rebating agent.
some builders will not sell without an agent (for fear that agents will not show their community), almost none will let you keep the commission or take it off the price (again for fear that agents will get left out once buyers find out) so the most likely way to benefit is to get a rebating agent. Otherwise you'll likely have to pay full price (or whatever you can negotiate) and the cost of commission built in the sale price.

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rufflesinc said:   xoneinax said:   zhelder said:   I never thought about having agent representation just for walking into a sales office, but now I've been thinking about it.But will they actually sell to you without an agent ?Why wouldn't they? This ||
miserly said:   some builders will not sell without an agent (for fear that agents will not show their community), almost none will let you keep the commission or take it off the price (again for fear that agents will get left out once buyers find out)

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But then again, I too have wondered if the builder can LEGALLY refuse to sell to someone not represented by an agent.

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Some builders around here require an agent, as they don't want to deal with questions that buyers have. They'd prefer to pay an agent to deal with them. If you can do it on your own, go for it, and use a real estate attorney to review your contract.

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rufflesinc said:   The only use I have for a realtor is access to real time MLS and showing me houses. Neither applies here.
  Problem is that good houses/great deals that come up on the hot sheet BEFORE they go to MLS are sold to realtors for a profit flip or realtors who have clients they can reach at a moments notice.
You are looking at the stuff that's been already looked at closely.
I've known house that have sold in one hour sometimes.
Good luck.

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mistycoupon said:   
rufflesinc said:   The only use I have for a realtor is access to real time MLS and showing me houses. Neither applies here.
  Problem is that good houses/great deals that come up on the hot sheet BEFORE they go to MLS are sold to realtors for a profit flip or realtors who have clients they can reach at a moments notice.
You are looking at the stuff that's been already looked at closely.
I've known house that have sold in one hour sometimes.
Good luck.

  
Yep, lots of people who have bought just a couple of houses think they know it all so reject all help. A few times things have come on the market and you think of your most loyal clients first. The ones that go directly to the listing agent are typically the least loyal and don't really know what they're doing which is why they're always wasting their time trying to get a deal.

And yes, the reason the builder doesn't discount their prices is that if they have 10 units to sell and all sale prices get listed, if they cut their price by 5k or 10k, then everyone else knows it. So that 10k turns into 100k. So they don't do it. All you have to do is look at the sale prices in a development, they all typically sell for asking price. They typically like paying commissions because brokers can bring them repeat business and lots of homes are sold through brokers so if they didn't offer a commission, it would hurt their sales. It's supply and demand. Reduce the demand, reduce your prices. The only time you can really get a deal is if it's the last couple of houses. But that typically means it's the least desirable house because the first buyers picked the best units first and so maybe it deserves to be reduced in price. Rebating broker is the way to go.

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mistycoupon said:   
rufflesinc said:   The only use I have for a realtor is access to real time MLS and showing me houses. Neither applies here.
  Problem is that good houses/great deals that come up on the hot sheet BEFORE they go to MLS are sold to realtors for a profit flip or realtors who have clients they can reach at a moments notice.
You are looking at the stuff that's been already looked at closely.
I've known house that have sold in one hour sometimes.
Good luck.

  Yes sorry, I forgot to include pocket listings, I have bought several of them myself. But how would new construction be pocket listing that you need a realtor for? They are incredibly obvious when you drive by and they advertise

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henry33 said:   
mistycoupon said:   
rufflesinc said:   The only use I have for a realtor is access to real time MLS and showing me houses. Neither applies here.
  Problem is that good houses/great deals that come up on the hot sheet BEFORE they go to MLS are sold to realtors for a profit flip or realtors who have clients they can reach at a moments notice.
You are looking at the stuff that's been already looked at closely.
I've known house that have sold in one hour sometimes.
Good luck.

  
Yep, lots of people who have bought just a couple of houses think they know it all so reject all help. A few times things have come on the market and you think of your most loyal clients first. The ones that go directly to the listing agent are typically the least loyal and don't really know what they're doing which is why they're always wasting their time trying to get a deal.

And yes, the reason the builder doesn't discount their prices is that if they have 10 units to sell and all sale prices get listed, if they cut their price by 5k or 10k, then everyone else knows it. So that 10k turns into 100k. So they don't do it. All you have to do is look at the sale prices in a development, they all typically sell for asking price. They typically like paying commissions because brokers can bring them repeat business and lots of homes are sold through brokers so if they didn't offer a commission, it would hurt their sales. It's supply and demand. Reduce the demand, reduce your prices. The only time you can really get a deal is if it's the last couple of houses. But that typically means it's the least desirable house because the first buyers picked the best units first and so maybe it deserves to be reduced in price. Rebating broker is the way to go.

  You may be able to get seller's assist and additional upgrades though.

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henry33 said:   
he only time you can really get a deal is if it's the last couple of houses. But that typically means it's the least desirable house because the first buyers picked the best units first and so maybe it deserves to be reduced in price. 

what about the saying "buy the worst house in the best neighborhood"? That seems like the FWF play, no?

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Bought a new construction townhome in 2013 using Redfin. Got half of Refin commission back as a rebate which was then used for new appliance purchases, etc. As others said, the cost of commission was built into the new construction sales price and was completely non-negotiable, so rather than letting the seller (builder) keep the whole commission, at least Redfin got some of it back for me. There really isn't much to negotiate in a new construction except for maybe various upgrades on hardware, modifications, and appliances.

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rufflesinc said:   
henry33 said:   
he only time you can really get a deal is if it's the last couple of houses. But that typically means it's the least desirable house because the first buyers picked the best units first and so maybe it deserves to be reduced in price. 

what about the saying "buy the worst house in the best neighborhood"? That seems like the FWF play, no?

  
Depends on what constitutes the worst house. For instance first floor and basement units are the least desirable units so even if you get a discount when you buy them, when you sell them, you'll have to sell them for a discount and then you've ended up living in an undesirable unit. Either you see people's feet walking by or people staring into your windows as you live inside so you have to have the blinds down all the time, some pay a premium for a view and for sunlight. 

As for the commission, it's an eternal conflict, the seller wants to keep it for themselves as they have twice the work to do without a broker and the buyer wants it for themselves because it's not "wasted" on a broker. So what usually happens is that there's no deal. Which is why sellers prefer to work with brokers, they just have to handle their end of the deal and the broker has to control their client or it's no sale. 

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I've built a few houses... I always use an agent. If for no other reason than it doesn't cost me anything. More importantly though, sometimes the builder pisses me off -- and I have the agent run down the issue, or call them to ask about an issue, etc. If use the agent as a go-between when I'm short on time, or if it is something minor that doesn't really warrant me spending time on it.

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If you are not good at negotiating then get an agent. From what I understand most builders have the agent commission built into the price of the home. So unless you are able to knock off at least 3% from the price, go with an agent.

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All depends on the deal.  If you are submitting a competitive offer (asking for a good chunk off) and have is contingent on the sale of your existing home then you might get it accepted if they see it sound.  If you are going FSBO there is risk for them in holding or whatever if it takes you longer or you don't have the cash you need to finance ect...  If using an agent shop for ones that own thier own brokerage and get something good out of it for a rebate.

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I can't think of way that it would benefit you not to have an agent unless the builder were to pay you the commission, which they are not likely to do.

Shop for a realtor that will give you a 1-2% rebate.

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I recently closed on a new construction home (bought it when only a foundation existed). We used an agent and did not receive a rebate, even though we had agree to one prior. The builder was very unwilling to budge on certain terms that our agent was able to convince them otherwise. We wanted certain upgrades that were not on the "approved list" that our agent was able to negotiate in. In addition, they were able to negotiate certain date requirements (10% deposit, full financial commitment date and closing date). There were several conversations that got "heated" to the point where we were relieved to have our agent be there as a buffer.

We felt that he had earned his full commission by the end of the sale and allowed him to keep it all.

I would say that there is a downside to using an agent and that is timeliness and miscommunication. You will always have to wait for your agent to be available before they can contact the sellers agent and then must wait for the communication to come back again. In addition, having a third person can sometimes misconstrue a message as well as the tonality of a message e.g. think about a time when you received a text/email and became offended by it but then later clarified that it was not intended to come off in such a way.

I think its unique to each situation. If the home is a spec home with no negotiation, then forego the agent and just hire an attorney to draft up the P&S. If you are going completely custom with a builder that you or someone you know has no experience with, get appropriate agent representation. If you negotiate a rebate, don't expect that they will put you at the top of their priority list when you need little tasks accomplished that would take you significant time to do yourself.
 

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We bought a new home last year. We used an agent since my relocation bonus gave us extra money toward closing costs/loan buy down if we used a "preferred" agent. For our transaction she was more of a pain than anything else. She tried to insist on going to the carpet/tile store when we picked out the finishes for our house. We just ignored her requests and went without her anyway. But it was highly annoying having to go through her for everything.

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Dayne411 said:   
I would say that there is a downside to using an agent and that is timeliness and miscommunication. You will always have to wait for your agent to be available before they can contact the sellers agent and then must wait for the communication to come back again.

  In this age of smartphones, there's no excuse for timeliness. My agent gets back to my within the hour even in the evening. I've even had him show a house  that just came on the market literally in the middle of the night at 1am before we were leaving town.

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rufflesinc said:   
Dayne411 said:   
I would say that there is a downside to using an agent and that is timeliness and miscommunication. You will always have to wait for your agent to be available before they can contact the sellers agent and then must wait for the communication to come back again.

  In this age of smartphones, there's no excuse for timeliness. My agent gets back to my within the hour even in the evening. I've even had him show a house  that just came on the market literally in the middle of the night at 1am before we were leaving town.

  He did a great job with his availability, however there is no way he can ever be as fast as me reaching out directly to the seller's agent.

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