{"id":363,"date":"2006-09-22T06:41:48","date_gmt":"2006-09-22T13:41:48","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=363"},"modified":"2006-09-22T06:41:53","modified_gmt":"2006-09-22T13:41:53","slug":"buying-a-new-built-home-how-much-is-your-agent-getting-paid","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/363\/buying-a-new-built-home-how-much-is-your-agent-getting-paid\/","title":{"rendered":"Buying a new-built home? How much is your agent getting paid?"},"content":{"rendered":"

This is me from this morning’s Arizona Republic<\/i><\/a> (permanent link<\/a>).<\/p>\n

 
Protect yourself from agent bonus fees by builders<\/b><\/p>\n

Are you buying a home? How much is your agent getting paid?<\/p>\n

If you’re buying resale, the answer is probably 3 percent, and possibly even less, although there may be buyer’s agent bonuses that your agent should have disclosed to you.<\/p>\n

But what if you’re buying a new home? Right now, builders are paying agents 5 percent, 6 percent, 8 percent — even 10 percent of the base price of your home.<\/p>\n

The builders are paying for the introduction. They don’t expect — or even want — your agent to represent your interests.<\/p>\n

They’re paying so much right now for two reasons: They want to sell as much inventory as possible between now and the end of the fiscal quarter on September 30th. And they hope that by offering very high commissions, they can induce your agent to persuade you to buy at one subdivision over another.<\/p>\n

Your agent may be faithfully representing your interests, but the objective of an exorbitant commission is to induce the agent to betray your interests in the builder’s behalf.<\/p>\n

Here’s the kicker: Every cent of that commission will be paid by you. The buyer pays for everything in the sale of the home. If the builders were offering a 2 percent buyer’s agent’s commission instead of 10 percent they could charge you 8 percentage points less for the home, or give you 8 percentage points more in upgrades, or pay your down payment or closing costs, or buy down your interest rate.<\/p>\n

How can you protect yourself?<\/p>\n

First, stipulate in your employment agreement with your agent that all commissions and bonuses will be disclosed to you.<\/p>\n

Secondly, agree in advance on the maximum compensation to be paid to your agent, with all the rest of any sales commission or bonuses going toward your down payment or other costs.<\/p>\n

How much is enough?<\/p>\n

New home builders make all the rules. No matter how much your agent might want to work on your behalf, there is a hard limit to how much the builder will permit.<\/p>\n

Except in extraordinary circumstances, I think 2 Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This is me from this morning’s Arizona Republic (permanent link).  Protect yourself from agent bonus fees by builders Are you buying a home? How much is your agent getting paid? If you’re buying resale, the answer is probably 3 percent, and possibly even less, although there may be buyer’s agent bonuses that your agent should […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[6,5],"tags":[],"class_list":{"0":"post-363","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-marketing","7":"category-real-estate","9":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":361,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/361\/ask-the-broker-why-should-i-take-a-buyers-agent-along-to-buy-a-new-home\/","url_meta":{"origin":363,"position":0},"title":"Ask the Broker: Why should I take a buyer’s agent along to buy a new home . . . ?","author":"Greg Swann","date":"September 21, 2006","format":false,"excerpt":"This question came at an appropriate time. My column in tomorrow's Arizona Republic deals with this topic:Last year it was so hard to buy a new home. We would have had to camp out in some builders' parking lots just to have a chance to be in a lottery to\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":733,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/733\/ask-the-broker-can-buyers-negotiate-for-the-buyers-agents-commission-to-be-paid-to-them-instead\/","url_meta":{"origin":363,"position":1},"title":"Ask the Broker: Can buyers negotiate for the buyer’s agent’s commission to be paid to them instead . . . ?","author":"Greg Swann","date":"December 5, 2006","format":false,"excerpt":"We have been focussing on new construction and have been meeting directly with builders and their agents. We have not been represented by a buyer's agent up to now. Our strategy has been to save on commission by dealing with a single party. We recently looked at several resales where\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1096,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1096\/how-much-is-my-agent-charging-me\/","url_meta":{"origin":363,"position":2},"title":"How Much is My Agent Charging Me?","author":"Russell Shaw","date":"March 1, 2007","format":false,"excerpt":"Lin Savage wrote: I am evaluating a proposal from a realtor to sell my current home and represent me in buying a new home (all in Texas). I would like some assistance in clearly understanding the commission structure as I consider her proposal.In the \"right to sell\" doc that she\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"cash-pile-notes","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2007\/03\/cash-pile-notes.gif?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":258,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/258\/sleaze-versus-sleaze-we-didnt-get-this-awful-reputation-by-accident\/","url_meta":{"origin":363,"position":3},"title":"Sleaze versus sleaze: We didn’t get this awful reputation by accident . . .","author":"Greg Swann","date":"August 28, 2006","format":false,"excerpt":"Give a glance to these excerpts from this article in today's Arizona Republic. There will be a quiz at the end. Sleaze:Home builders are spending big bucks and dishing out heaping helpings of hospitality during what has become the summer of love in the Phoenix new-home market. The objects of\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17242,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17242\/a-sunday-sermon-for-the-phoenix-ibuyers-do-not-bind-the-mouths-of-the-buyers-agents\/","url_meta":{"origin":363,"position":4},"title":"A Sunday sermon for the Phoenix iBuyers: \u201cDo not bind the mouths of the Buyer\u2019s\u00a0Agents.\u201d","author":"Greg Swann","date":"October 4, 2020","format":false,"excerpt":"I don't list a lot, right now, but I have been working for years to list perfectly: Highest\/safest\/soonest offer in minimal Days on Market. I haven't done my numbers in a while, but I've been under seven days, on average, for a long time, typically selling at or above Fair-Market\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/10\/muhammad-umair-TxQSdnp6D_k-unsplash-480x320.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":576,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/576\/learning-to-negotiate-the-buyers-agents-commission\/","url_meta":{"origin":363,"position":5},"title":"Learning to negotiate the buyer’s agent’s commission . . .","author":"Greg Swann","date":"October 27, 2006","format":false,"excerpt":"From my column in today's Arizona Republic, a familiar theme. The permanently linked version uses a somewhat longer version of the text. \u00a0Negotiate agent commission In past weeks, we talked about using the simple question \"How much do you charge?\" to negotiate a more reasonable buyer's agent commission. 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