Nov. 10, 2006: Helping my clients make a great deal on a new home purchase in Phoenix even better
I have clients who are closing escrow on a new-built home soon. They're moving from a house of about 1,725 square feet to a home of about 2,100 square feet.
Because it's a new build and because of when they're buying it and, most especially, because it's a spec home -- a home specified by and started for another buyer who has since canceled the purchase -- they're getting a smoking deal.
The builder is trying to close on absolutely every spec home, so it's making great deals. It's giving my buyers a $75,000 upgrade package, plus throwing 6 percent of the purchase price toward their down payment.
If the Valley's real estate market gets back to normal soon, they'll have a ton of equity fairly quickly. And even if not, this home is an incredible bargain -- an unrepeatable opportunity.
Here's the kicker: The builder's sales rep told me in private that the buyer's agent's commission is 8 percent. Unbelievable!
I strive to be a vigorous champion for my buyers, but builders leave precious little room for a Realtor to effect any meaningful buyer's representation.
In effect, taking a party to a new-home subdivision is a referral. That could explain why so many builders and Realtors treat it that way.
For my part, I'm doing everything I can to defend and protect my clients' interests, and that still won't be very much.
So how much should I get paid for doing not very much work as capably and professionally as I can?
Surely not 8 percent. I won't even take 3 percent on new construction.
Here's what I did for this home: I conceded 6 percent to my clients, keeping 2 percent for the brokerage.
They didn't have to ask for this, nor should they have to. The value of my efforts didn't change just because the builder is trying to bribe me into betraying my clients, and with their own money.
This is true buyer's representation: I'll make a reasonable amount for my efforts, but my clients will get an even more incredible bargain.
Greg Swann is the designated broker for BloodhoundRealty.com, a full-service Metropolitan Phoenix real estate brokerage. This article originally appeared in the West Valley regional sections of the Arizona Republic.
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