FAQ V:  Why do I need a broker when the builder has its own sales team?

You are interested in buying a home – but not just any home.  You want to buy THE home; your dream home, as the phrase goes.  You’ve been doing research on line until your retinas detach.  You’ve dreamed about the features you’d like to have in your perfect home.  You’ve got numerous Pinterest boards with bathrooms, dens, libraries, home offices, patios, landscaping, garages, master bedrooms, and dining areas.  You’ve likely visited numerous open houses and model homes in different subdivisions.  When asked if you’re working with anyone you state “oh, I’m just looking for decorating and design ideas.”  These activities have been going on so long your spouse and kids think you’ve taken a part time job as a professional real estate researcher.

Now, the time has come.  Your investigations are complete and you’re ready to pull the trigger and make an offer.  A friend (a really, really good and smart friend) suggests you contact a real estate broker to help you.  You think to yourself “But I already know what I want and there are plenty of sales people willing to help me at any of the housing developments – won’t that work just as well?”  In short, the answer is no, not really.

Here’s the deal.  A builder is a seller.  The builder’s sales team works for the builder, not for you.  Sure it is super easy to waltz in to the sales center, pick out the floor plan, the cabinets, the flooring, the paint colors, etc, etc.  The builder even has its own contract.  Each of these things is designed to make the product look more enticing and improve the builder’s profit margin.  There’s nothing wrong with that.  That’s what business and investing is all about, right – making a profit?

But who is looking out for you, the buyer?  Who can you rely on who is familiar with the home buying process?  Who can you rely on who has read and is familiar with numerous contracts?  Who can you rely on who is well-versed in negotiating strategies so that you get everything you want at a reasonable price and will hold up to the bright light of day all of the fine print the builder includes in its contract to protect itself?  In sum, that person is a real estate broker working as your agent.  For a discussion of the value and definition of an agent, please take a look at my colleague, Dick Greenberg’s post on this subject:  Are You Working for Me?

Now, this may sound like I’m trying to bash builders and that they are all out to take advantage of every buyer that stumbles into their project.  Not so.  Builders must establish and nurture solid reputations in the communities they serve.  Otherwise, word gets out and fewer people will buy what they have to offer.  However, builders are biased to their own interests.  Who isn’t?  For this reason, it is critical that you have someone in your corner who is biased to your interests; who will stand with you and provide the chutzpah to hold the builder accountable to their agreements; to ensure you’re paying no more than market price for what you’re buying.  In essence, a broker is there to help you attain your goal while helping to improve your own potential profit margin.