27 Mar Which came first the Agent or the Builder
Which came first the Agent or the Builder
This question has been asked more times than I would like to admit! The argument whether or not the builder is going to pay the Realtors commission.
There are so many things to consider, but how about we consider the homeowners first, as they come 1st, in service and doing the right thing by all parties.
The buyer has the right to representation. The buyer has the right to be sure their best interest are being taken care of, so should the builder at the very beginning of the process offer them buyer representation? Not the salesperson who represents the builder, as they work for the builder. Yes, I guess you could have dual agency and my question is, is this being offered by builders. Do they disclose agency in the very beginning like we Realtors do? I honestly do not know the answer to this question, but if the answer is that this is not a requirement then should it be? Should builders selling their own homes be held to the same standards as Realtors to protect the consumer?
There are some very good community builders out there that have a Realtor plan and are happy to work with an agent. They all are different, some pay commission only if you register your client. Some registrations are only good for 30 days so Realtors need to re-register their client. Some builders only offer commission on base price and not total sale.
To be fare to the Builder, there are agents who get their client under buyer agency and send their client shopping, and not do another thing till they are ready to write and offer and then see their buyers at the closing table. Did the agent earn their commission? As if I “refer” business out to a Realtor – I would ask for a referral fee, this seems more like a referral then a buyers agency relationship.
However there are time when the buyer did not know they were going to look at new construction and the buyers agent drove around for days/weeks, has put a lot of effort into the home search – and a buyer could of stumbled on a new construction open house and because the agent/buyer is not registered the builder will refuse to pay commission. If a Realtor has a client go through an open house of resale, the commission is not even a consideration!
I have had some builders say, that Realtors just get in the way and would like us not to participate in the sale. Now that makes me wonder and they are denying the buyer’s right to representation.
As the building industry rises, I think these issues should be addressed and made clear and in the best interest of the consumer.
If you are a buyer’s agent have the discussion with your client about buyers agency. It’s the law! This should clear up a lot – however maybe you would like to go out and look at new construction with your client as well. Do not just send them shopping.
How do we bridge this gap? How do we all work together for the better good of the consumer?
I would love to hear your comments.