Understanding Representation: Visiting Colorado Builders

Secrets from a former Colorado Springs, on-site builder sales representative

While most builders diligently strive to staff their models only with trained and competent sales professionals, it is my sincere opinion that you as a modern home buyer honestly need a licensed Realtor on your side from the start.  I have not arrived at this belief based on arbitrary factors, but by past experience working as an on-site builder’s agent for half of my 18 year career.  I was fair and honest, integrity above all, every day.  However, I was there to sell for my builder client.  For example,  I could not tell you about a competing builder I knew of who was soon to release that perfect view lot you said that you really wanted, but gave up trying to find.  In fact, doing so would have violated my ethical duty to my builder client.  This is one of a dozen real-life scenarios that happen every day in on-site sales.  Did you know that an agent can actually be sanctioned or punished for slipping up and trying to help you in this?  Now that I’m free of that, you can become my client, with that same kind or faithful representation, except working for you.  The point is, you can’t know everything that’s out there,  and you surely can’t know all the variations in pricing and features when comparing builders.

(If you are interested in the back-story about working on-site for builders, I think you will enjoy this piece, starting about paragraph # 4…. )

What’s more: modern real estate sales commissions are almost universally designated in advance so that the builder already priced in your agent.  Translation:  using me does not cost you anything.   However, not hiring an agent for representation rarely results in the buyer being able to receive the equal or even a significant part of the commission savings from the builder – it is a fact of life I learned from representing builders for such a long time.  There is an example below as well that illustrates the point in a practical way.

Analysis paralysis?  Let’s switch back to the topic of Too Much Good Information to Process. Nowhere does this apply more suitably than looking into the mind numbing builder quagmire of structural options, upgrades, design studio choices and much more.  None of this is the builder’s fault.  What they are seeking to offer is a wide range of selections, while making varying and targeted levels of profit on each.  The deep water comes when trying to compare all of these things, often paired in a way that gives the builder the greatest advantage.  Again, that’s expected.  Now back to you, studies show that when you have no one “on your side of the desk,” you might not save a dime.  In fact, some studies imply that going it alone might even cost you more.  On top of the options confusion, builders know how to negotiate- they do it every day.  The average buyer, on the other hand, may only negotiate a new home purchase a few times in a lifetime, and is therefore at a predictable disadvantage.

Note: I have seen buyers create elaborate spreadsheets to compare the dizzying options and pricing models between four or five builders. This is not uncommon, and on-site agents actually respect the technique when buyers employ it.  However, having been on the “selling side,” I can tell you that 99% still miss the big picture in a handful of areas,  simply because they don’t do this every day.

Example referenced above: Over the years I have met many home buyers who mistakenly thought that they would have a financial advantage if they approached a builder without an agent representing them.  (We’ll call one of these buyers Jim for this example.)  Jim believed that the builder would discount the price of the home due to the fact that Jim was not bringing in an agent.  Jim thought that all or part of the commission that Jim’s agent would have received could now, somehow, be applied to reducing the purchase price – a better deal for Jim?  No, as previously stated, this almost never happens anymore.  The vast majority of Colorado builders do not and usually cannot respond to this approach for reasons, that if listed here, would make this a 4,000 word article.

Thanks for reading this. What it means is that you want to be the most educated homebuyer that you possibly can be. If you need help in sorting out builders and details, I’m just a phone call away.