Realtors Vs Builders: How Well Do They Really Work Together?

In this week’s real estate roundup, Steve spoke with Terry Story, 30-year veteran at Keller Williams, about the importance of real estate agents building relationships with builders and construction companies and what these relationships mean for homebuyers.

Having Someone On Your Side

There are a ton of builders and major companies constructing entire communities full of beautiful homes. These companies want people to find out about their homes and buy them. That’s why they start building relationships with realtors and agents. Realtors and agents act as a sort of middleman, finding and bringing buyers to the doors of the homes.

But how exactly does this work? Let’s say you as a prospective homebuyer want to go to ABC construction site. The realtor brings you out. For connecting them with a potential buyer, the builder compensates the realtor/real estate agent. It doesn’t cost the homebuyer anything.

Understanding Home Pricing

It’s important to understand how builders price things. They have already factored in the real estate agent’s commission. So, it wouldn’t really be right for prospective homebuyers to say, “Well, I didn’t come with a realtor, so I’m keeping X amount of dollars.” It just doesn’t work that way.

Time changes things for builders. As things get closer to build out, things become more expensive – like certain lot locations. But the base price of the house remains the same. The agent is on the side of the homebuyer. They can sometimes negotiate different aspects that go in the home to help bring the price down, things like flooring and tile. Since it doesn’t cost the homebuyer anything extra, it’s really to their advantage to have a realtor’s assistance.

Buying A Home In A New Development

Let’s say there’s a new development that’s announced. A plot of land is cleared, and a little mobile home office is there. But no homes are built yet. There may be some plots that are outlined, but no actual houses have been built. It’s in the pre-construction phase. Homebuyers can definitely save money by buying at that early stage, but they’re also taking a risk. What if the development doesn’t take off and sell well?

Still, buyers definitely pay more by waiting. The building company tends to give better prices to people who buy before the homes are even built. The other advantage of buying early is that, of course, you have the best choice of lots.

With buying a home in a new development, the truth is, as always, “buyer beware”. Builders hire professional decorators to stage the model homes and there are a lot of tricks they can use to make the spaces look as big as possible and the lot locations the most attractive.

If you’d like to learn more about buying or selling a home, or, to learn more about Terry, check out Keller Williams.