Well, first...yes, the builder's trying to make as much profit as possible. And, you're trying to buy at the best price possible. Hopefully, you can meet in the middle.

Assuming 6%, a REALTOR commission will take $21,300 out of the deal. Is it your intention that you would pay this commission...or, are you expecting the builder to pay? The builder's sales office representative has told you that she's not authorized to change the whole deal with the builder now paying the commission. The builder has countered your offer assuming he doesn't have to pay any commission.

If you want an agent now, you'll either need to pay the commission yourself or start over on the negotiations through whatever REALTOR you choose. Who knows whether you'll save any money, or not? That risk would be in your court.

/tricia

It is way to late to bring in a real estate agent. Additionally, real estate agents don't really negotiate on our behalf the way I believe you are expecting. They more present the offer you make and present your points, but they are not professional negotiators. They are are not equipped to review the agreement with the builder either. You need an attorney with experience in real estate and construction law.

Something many people are not aware of is that builders who do any kind of volume don't pay 6% to real estate agents.

The real estate agents I know require that you speak up immediately if you are using a buyer's broker. You can have them do all the work and then bring someone in at the last minute. They should be informed with the first phone call. If you drop in (such as an open house), you should tell them and fill in the broker's name if there is space for it on the sign in sheet.

I'd say continue to negotiate yourself. As others said it is too late to bring an agent in. BTW generally builders pay the agent 3% not the full 6%.

How about coming back with a few K above what you offered and counter their offer. See what they say and stick to your points of why that is the offer. At some point you'll reach a final offer either from you or the builder. I would assume yours is 10K above your current. Have no clue what the builders is.

One thing to keep in mind though is they often will lower the price on a completed home as it cost them money when it is just sitting, but an unbuilt that they have a contract for is different.

Play hard ball. Call the sales person back, tell them you can't come up that much and you'll be looking at other builders now. And then go look at other builders. See what you can get from another builder. If you can't be serious about walking away, then just sign a blank check and hand it to the builder and get it over with.

Real Estate Agents don't negotiate new construction, they can really help you find them, but then you're on your own.

I'd also advise you to have any contract with a builder reviewed by a Real Estate Attorney before signing. Even if you can't modify any terms, you should know how you have absolutely no rights under their contracts and are at the builder's mercy for closing dates and timelines. It was eye opening our first time.

I've been brought in "late" on builder transactions, & it does work.

Sometimes, having a knowledgeable agent to guide you as well as to negotiate on your behalf is well worth their fee.
& the builders I've worked with consider that they are capable of representing themselves, so they pay me the buyer's agent "half" of the fee I'd charge for handling both sides of a transaction.

Best luck!

I'm confused. You say you gave the builder your "best offer" of 355K, and then you say you really can't offer more than 10K more. Does that mean you're actually willing to pay 365K?

The builder countered at 380K (your 355K offer plus 25K more). That's only 15K more than what I think would be your final offer. Why try to involve an RE agent when you've taken it this far?

Why not offer something like 360K and see if you get a decent counter to that? If you can get the difference between your two offers down to a smaller figure, you might be able to get the builder to cave, conditions being what they are in the construction industry.

I have talked to my real estate agent about this and he told us to wait a few days and talk with other builders in the area and see if they could beat the deal. We really like the neighborhood, street, floorplan of the the 1st builder but there is another builder that has an almost identical floorplan in a newer subdivision (only 8 houses built and 10 under construction). Builder #2 is right at 355K but is further out. #1 House would be 10 minutes from work and #2 House is 15 and closer to the highway (as far as noise goes - the sales person said once more house go up in that neighborhood the highway noise would go down but I don't see that it would go down that much)
The #1 builder told us the offer is good until the 24th of this month.

Berniek,
Are you actually going to reply constructively or just repeat what I have written? I don't know if I am an expert, but I am an attorney and my husband spent most of his career as a builder. In our area (MA, NH, ME) volume builders do not pay 6% commission. My opinion (which is really 90% of what anyone writes on here) is that the OP needs an attorney. This house may well be the largest excessively frugal at this juncture. Spend the $500 it will cost to have an attorney review the agreement and provide suggested alternatives to the worst language. Have you read any of the posts on Building a Home or Kitchens where people ended up with serious issues with their build and no recourse because standard builder contracts offer home owners little proteection? Does the OP understand the contract without legal assistance? Does the OP know all the scenarios that could arise during the build and whether she is protected? Does the OP know what her state law requires be included in construction contracts. Even my state, which is not exactly consumer friendly, has lengthy requirements, and IME, the builders don't even know the requirements. Do you know of a real estate agent that will review the builder's contract for a client and provide legal advice, which is part of negotiating new construction? Why do you think the OP does not need an attorney?

Real estate practitioners assist with real estate marketing & negotiation;
they cannot offer legal advice.

Attorneys can offer legal advice;
I never met one who would assist with real estate marketing or contract negotiation.

Something happened in my post. The 4th sentence should have read:

This house may well be the largest purchase OP ever makes. It makes no sense to be excessively frugal at this juncture.

We are not being excessively frugal. We looked at the newly built homes in the neighborhood and what the sales have been. In the past year, about 4-5 houses have sold around the 345-370K range, more around 360K. This neighborhood has a street that was involved in the Parade of Homes(upscales homes the city tours once a year in different neighborhoods). Those 7 houses range in price from 450-600K. There only has been one house that has been a resale in the neighborhood. They bought it for 412K about 3 years ago and had to lower the original price to sell it at 390K. There are a lot of the builder's employees that have bought and built in the neighborhood and have gotten good incentives (lower priced homes). I just don't want to pay more than the average home sales in the neighborhood then take a loss when and if it comes time to sell (if my husband relocates).

"Berniek,
Are you actually going to reply constructively or just repeat what I have written? I don't know if I am an expert, but I am an attorney and my husband spent most of his career as a builder."

And I'm a REALTOR who all of his life has worked in Civil Engineering and construction and Real Estate.
The buyer has a right to representation, without it they should walk. Case closed.

Berniek,

I have a question. We have talked to the sales person in the model home and priced the floorplan we want and went to the design center to price out the options ourselves. This has taken about 1 month. We submitted our offer on Monday and when the salesperson got back with us on Tuesday night they said we couldn't bring in our real estate agent. I said we need one now to help make the negotiating easier. She said that if we brought the agent in on the deal she could lose her job. I don't see how that is true. This is the same person that last week she said that the company gives no discount to someone without an agent. We have an attorney in mind to go over the contract. But I wanted a real estate agent all along but my husband wanted to see if they would come down a little on price. Is is too late for a real estate agent to be involved? We haven't signed any contract yet. The only thing we did was submitted an offer letter with our price and the reasons why we thought that was a fair offer, based on what other builders are offering and the recent sales in the neighborhood.

"She said that if we brought the agent in on the deal she could lose her job. I don't see how that is true."

What she will lose is part of the commission your agent would get. IMO. Tell her you did not make those rules (if true), but you have the right to be represented.

"This is the same person that last week she said that the company gives no discount to someone without an agent."

That's pretty much the way it is where I am.

"But I wanted a real estate agent all along but my husband wanted to see if they would come down a little on price."

Probably to late for that. Some builders here will not pay an agent unless they accompany the buyer on the first visit, is that the case where you are? It is more difficult for volume builders to adjust the price in a neighborhood(because of appraisals), than to give incentives.

"We have an attorney in mind to go over the contract."

If they don't allow for you to have representation by an agent, will they allow representation by an attorney?
One other possible way is for you to pay the agent and reduce the offer by the agents commission, all they can say is no, you never know until it's in writing. Remember, the builders sales person works for the builder and does not represent your best interests, sometimes talking to the person above the builders rep. makes a difference in the outcome.
Just make sure you don't go down this path alone.

You submitted an offer;
has the offer been executed (all parties signed off, earnest money given)?

If negotiations are still continuing, I don't see that the builder (who bears the same relation to you that a used car salesman bears to anyone who buys a car from him/her) has any business denying you the right to have your own Realtor involved.

Best bet might be to spill your guts to your Realtor & ask him/her to help you here.

I know when I was looking at all the new homes being built in the new community EVERY SINGLE one of the sales offices had a sign that says your Realtor must be registered upon your first visit to the models/sales office. Most only pay up to 3% of the base price.

I would think you have more leverage not dealing with an agent but use an attorney to fine comb your deal. This late in the game you can still use an agent but I am 99.9% sure they would not be paid the commission.

Good luck and I hope they can meet your offer!!!

We are waiting it out. We have until the 24th of this month but we might lose the lot we like. They haven't contacted us this week.

We just purchased a new spec house at a huge discount. I watched the MLS daily, and the day we bought, the builder had discounted 20%. I actually think they over-discounted for this area. Their national operations were hurting so bad, they had to get sales (khov). Just keep watching it...

As I was writing the deposit check on the house, I asked the agent if he was glad he didn't have to split his commision. He told me that it didn't matter one bit; the company paid their buyer's agent commissions out of a seperate "fund," and he got the same either way. I then remembered the name of a flat fee agent that refunds 2% to buyers, and quickly entered his name in the line. We pretty much didn't have to pay anything at closing, and I used him again to sell my house flat fee a month later...

I would only use an agent if you are sure to get something back..

berniek: "The buyer has a right to representation, without it they should walk. Case closed."

sylviatexas: "If negotiations are still continuing, I don't see that the builder (who bears the same relation to you that a used car salesman bears to anyone who buys a car from him/her) has any business denying you the right to have your own Realtor involved."

The spin from the real estate agents on this board never ceases to humor me. C'mon, now! You both know darn well that the builder is not denying the buyer representation. The buyer can have anyone he or she wants represent them at any time. What the builder is saying is that the builder is not going to pay for the buyer's representation.

And you both know very well why that is, don't you? C'mon now.....say it with me.....those two little words that every real estate agent knows so well......

procuring cause.

You remember that phrase now, don't you? Sure you do!

So quit trying to obfuscate the issue by suggesting that the builder is somehow denying the buyer his or her right to representation.

The buyer can have his or her agent represent him in any manner he wishes - - -- the builder just isn't going to pay a commission to the agent because the agent was not the procuring cause for the contract.

And as berniek so eloquently put it:

Case closed.

"The buyer can have his or her agent represent him in any manner he wishes - - -- the builder just isn't going to pay a commission to the agent because the agent was not the procuring cause for the contract.

And as berniek so eloquently put it:
Case closed."

That is always the builders options, and some do enforce it, knowing that over 80% of his business in my area is because of REALTORS.

Representation & procuring cause aren't the same thing.
Procuring cause is getting a buyer for a property or a property for a buyer.

Representation is representing the client's best interests.

Builders don't make "special deals" in which they cut the sales price by the amount of commission they'd have paid had the buyer brought in a Realtor;
they can't afford to, since that sales price would go into the mix for the next appraisal, lowering the comps for their future sales.

As Bernie says, it's good business for builders to welcome Realtors;
if the builder refuses to pay the buyer's Realtor, he's setting up a negative relationship with that Realtor & maybe with all the agents in that Realtor's office.

& there's got to be a reason.
My guess is that the buyers hadn't gotten the "deal" they think they are.

If I started negotiating with a builder on my own & felt that I was in over my head & the builder told me I couldn't bring my Realtor, I'd look for another property.

sylviatexas: "Representation & procuring cause aren't the same thing. Procuring cause is getting a buyer for a property or a property for a buyer. Representation is representing the client's best interests.

HaHaHaHaHa. OF COURSE it isn't the same thing! That's the point that I was making, lol! It was you who was implying that the builder wouldn't let the buyer have representation when all along the issue was the builder wasn't going to pay the agent because the agent wasn't the procuring cause for the transaction. Nice spin. And speaking of spin.....

sylviatexas: "If I started negotiating with a builder on my own & felt that I was in over my head & the builder told me I couldn't bring my Realtor, I'd look for another property."

Let's change your example ever so slightly without altering the basic concept. Let's say instead of looking at a new house you're looking at a resale. Same circumstance except instead of dealing with a builder's sales office, you're dealing with the seller's listing agent. Okay, now let's get back to your example. You're negotiating with the listing agent on your own and feel that you're in over your head and want to bring in your own real estate agent to negotiate for you.

Are you seriously suggesting that the listing agent should now allow the buyer to use his own agent and pay that agent half the commission?

Hmmmmmm??

I didn't think so.

And the reason why?

Let's all say it again:

Because the buyer's agent would not have been the procuring cause for the transaction.

It is really not that difficult a concept.

"Are you seriously suggesting that the listing agent should now allow the buyer to use his own agent and pay that agent half the commission?"

That might be a mute point in locations where the buyer has a legal right, by state statute, for representation, like here.

"Are you seriously suggesting that the listing agent should now allow the buyer to use his own agent and pay that agent half the commission?"

Yup, I think some people are suggesting that and in every day life it happens frequently. I can think of at least three deals I was involved with where I was not procurring cause but was chosen to represent the buyer and was paid without incident (1 FSBO 2 builders). I can also think of one time that I had procurring cause and I stepped aside for the sake of the buyers and ease of the transaction.

In real estate there are no "case closed"- every situation is different and everything is negotiable even when they say that it is not.

If you feel that you are in over your head then you should consult an agent or an attorney before you move forward.

Bernie, the phrase is "moot point", not "mute point". Just thought you'd want to know for future reference.

"Bernie, the phrase is "moot point", not "mute point". Just thought you'd want to know for future reference."

Thanks, it's my German showing again.

My reference for not using the right word.

Here is a link that might be useful: World Wide Words

In law. "moot" isn't used just in law mock appeal hearings, as World Wide Words appears to think, but also to describe any legal issue that has already been decided by an appropriate controlling tribunal and, therefore, should not be raised in subsequent litigation.

Arguing whether an issue is "moot" or not consumes a fair amount of any trial lawyer's time. It is very common for a trial court judge to throw out significant portions of litigants' cases because s/he has found them to raise moot issues. So this is a much more important legal concept than the link would suggest.

The popular use of "moot" is exactly opposite -- it's used to describe an issue that still needs to be decided. Since bernie was not using the term in a legal context, I assumed he meant it that way. Of course, as the WWW says, it's not supposed to be spelled or pronounced "mute."

Time to stop this and "nip it in the butt" and hit the irrelevant "mute" button.
(ok, bud)