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2 Myths About The Relationship Between Home Builders and Real Estate Agents

Categories: Community Development, Customer Care, New Homes, REALTORS® | Posted: March 8, 2012 | 2 Comments »

Don’t succumb to all the hype. At times it can be portrayed as a war between home builders and real estate agents, but the truth is, more agents today then ever before are bringing their clients in to new home sales sites and for good reason. The quality of construction, the onset of new energy efficient materials, and the numerous warranties as well as lots of options that abound for buyers. After all, a real estate agent is there to find the best possibilities for their buyer.

In the current economy builders and developers realize and respect the fact that real estate agents are a large source of sales for their communities and are making strides to bridging the gap that used to exist previously between builders and buyer’s agents.

Here is a little myth buster session to take into account when looking at new homes. Strong, reputable builders tend to hold to these precepts.

Myth One: If a buyer communicates directly with the builder the agent will be cut out of the deal

The Source: In the past Agents felt that builders might “cut” them out of the deal if their buyers began communicating directly with the site.

The Truth: For the most part new home sales agents are trained to ask if you are working with an agent. As an agent, informing your buyer that they need to disclose that relationship up front even if they go in to “Just look” will help a builder know that an agent is working with a client. Think about per-registering your clients with a builder you think your client may be interested in.

As a buyer, If you are working with an agent, those relationships should be noted upon first visits to a new home sales site to avoid confusion later.

A new home sales agent on site is the best source of information on the home builder, the building process, the community and other pertinent information to help a buyer make a decision on purchasing a home in that community.

A buyers agent is a great source of information on comparisons of the local area, market data, knowledge about the buying process, and many other professional resources for their buyers.

The ability to communicate shouldn’t be blocked by miss conceptions. Everyone should work together to help a buyer understand the process and their options throughout the building and buying process.

The Reality: A builder who tries to cut agents out of the loop will have that reputation and it will spread like wildfire among the real estate broker community. With the high volumes of sales made by real estate agents on new home sites that’s not a lead source most builders would or should risk.

Myth Two: If I don’t use an agent I will get a better deal

The Source: At times real estate agents are concerned that a builder will offer a better deal to their buyer, if the agent relationship is terminated and the builder doesn’t have to pay a commission. And in reality this myth is perpetuated more by uninformed buyers than anyone else, because they perceive they have more ability to negotiate without an agent commission.

The Truth: The fact that there is no commission paid on a particular home does not mean there is more room for negotiation in a home. And any reputable builder will not even offer such a deal because of the ramifications it will have with in the broker community. This means a buyer can not negotiate down the percentage that would have been paid to an agent.

The Reality: Most builders set their margins based on a certain percentage they will pay for commissions throughout the community not based house by house. If a builder were found saying to a buyer, “well if you don’t use your agent I can give you a better deal…” that would be the death of their real estate agent traffic. No builder is willing to risk that no matter how hard an individual negotiates without an agent.  By informing buyers that this is not a stance the builder will take it will help squash the idea that going it alone will help them get a better deal.

These two major myths are the fodder that feeds the perception that builders and agents don’t get along.  But the truth of the matter is that strong builders will make the effort to dispel these myths and work together with real estate agents for the good of the clients and the good of the real estate community.

Image source: ©PhotoXpress.com

 

 

 

Ideal Homes

2 Responses to “2 Myths About The Relationship Between Home Builders and Real Estate Agents”

  1. John Eberle Says:

    With twenty years experience as a new home sales person, sales manager and VP of Sales and Marketing for a regional builder in the southwest and now one year experience as a licensed Realtor in Arizona, I can say, with authority, this article is dead on correct.

  2. Daniel R. Levitan Says:

    Homebuilders and Realtors have shared interests and many shared goals and proper communication will produce a partnership that is a “win-win” for both, not just in distressed markets.  The Institute of Residential Marketing at NAHB created a course titled “Increased Profits Through Effective Builder-Broker Cooperation” that addresses these issues and creates a forum for establishing that opportunity.

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