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What Builders Hope Buyers
Never Find Our
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The Threshold Rule in Arizona
What Builders Hope Buyers
Never Find Our
We wanted to share some information about how our New Construction Market works here in the valley. When a buyer walks onto a Builders Construction Site or through a Model Home Center, and is not accompanied with a Realtor, the Buyer GIVES UP THEIR RIGHT TO FREE REPRESENTATION OF THEIR INTERESTS by a professional Realtor. This is commonly referred to as "The Threshold Rule". Once over the "Builders Threshold", the buyers are on their own, and at the mercy of the builder. The buyer has NO BUYERS REPRESENTATION and no support mechanism in the long process of writing the contract, financing, inspections and/or remedies to any issues that may arise as the process moves forward. Therefore, the information below is intended to let you know:
What Builders Hope Buyers NEVER Learn. This Report Reveals Secrets About New
Construction That Can Save You Thousands of Dollars!
If you are in the market to buy a house, one of the first things you will probably do is check out all the new construction in the area. Studies show that, given their “druthers”, most people would rather buy a brand new home than purchase a resale. Like a new car, a new house has a special feeling attached to it, right down to that ‘new house smell’.
The average couple begin shopping for new construction in this way: they buy the Sunday newspaper, circle all the big ads, climb into the car, and plan a day of visiting sample homes. They are excited and in high spirits. After all, this is going to be great fun!
They drive up to the first sub-division. (Finding the sample home in one of these developments is never difficult. You just look for the flags in the driveway, the sign on the lawn, and thousands of dollars in professional landscaping.) They pile out of the car, go through the door, and are greeted by an attractive, smiling salesperson.
“Just looking,” they tell the Builder’s Representative.
“No problem,” says the salesperson. “If you’ll simply register here, I’ll give you a brochure, and point you in the right direction.”
They dutifully fill out the registration form, get the brochure, and tour the house. More likely than not, to exit the sample home, they have to go right back past the Builder’s Representative. The salesperson, still smiling, stands ready to answer any and all questions they may have.
If the home they saw holds any interest for them, they will probably view the plot plan. The salesperson points out which lots are still available, which have premiums, and which are ready for immediate delivery. He or she will sincerely confide to our couple that a small, totally refundable, deposit will “hold” the lot they like best. This will give them a chance to think about it, without running the risk of someone else grabbing “their” lot.
The couple, feeling very comfortable with this pleasant and non-aggressive salesperson, and very appreciative of the special “insider-information” about the lot, decide to leave the deposit.
After all, they have nothing to lose and everything to gain, right?
Wrong!... Dead Wrong!!
What the couple did when they first walked in and registered was to sign away their opportunity to have their own agent represent them if they buy from that builder – with the builder footing the bill for that representation! When they left the deposit on the lot, they further sealed their fate. Now, this is not to imply that you are not entitled to be represented, only that if you now wish to be represented by a Buyer Representative, you will, in all likelihood, have to pay your Buyer Agent for that representation.
Here’s the truth that builders hope you never discover.
In today’s competitive market, most developers realize that the buyer for their home may already be working with a real estate agent, and THEY BUILD A COMMISSION FOR THE AGENT INTO THE SALES PRICE OF THE HOME. That’s right, the commission to pay YOUR agent is ALREADY figured into the price that the salesperson quoted you. And the house is the SAME price, even if you walk into the sample home all by yourself, without an agent.
How much money are we talking about? Well, if a house is $200,000, the builder may be offering anywhere from 2%, to a full 6%, for the agent who brings a buyer. That’s $4,000 -- $12,000 that you are going to pay, whether you are represented by an agent or not! What happens to all that extra money if you walk into the sample home yourself, as the couple above did? You guessed it, the builder keeps it!
And that is not even the WORST part. While you are now going to pay the same price for the house that you would have if you had brought your Buyer Representative Realtor with you, you now have NO Buyer Representation, NO Buyer Advocate, and the risks you run by just having the Builder’s Representative “take care” of everything for you could end up costing you a whole lot more! Remember the Builder's Representative is hired by the Builder to Represent the Builder and the Builder's Interests, NOT THE INTERESTS OF THE BUYER!
Sooo do your self and your family a favor. Hire a REALTOR to represent you. The Representation is paid for by the Builder and you will be assured of a pleasant trek through the murky water of New Construction Purchases. It's a Jungle Out There!
Read our BLOG about Builder Contracts
So you just can't believe
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Bye for now,
Lori & "G-II"
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