Phoenix Az Real Estate Buyer MYTH-Understanding Series: Myth #4

After working with hundreds of homebuyers, I've come to recognize that there are several common misconceptions that are widely held to be true by experienced homebuyers and first-timers alike. I refer to them as "Myth-Understandings" and I've seen many prospective buyers harm their own cause as a result of their misled belief in them.

Keep in mind that real estate laws vary from state to state. If you have any questions about how this topic applies outside the State of Arizona, consult a local attorney in the state in which you plan to do business.

Phoenix Real Estate Homebuyer MYTH-Understanding # 4 -

I don't need a Realtor to buy a new home because the Builder's agent will represent me.

Truth: The Builder's Sales Agent represents the Builder ONLY!

There's a sign posted on the front door of every model home sales office in the State of Arizona that states something to this effect:

"If you are represented by a Realtor®, they must accompany you during your first visit to this community."

Home builders factor a Realtor's® commission into the cost structure of every home they build, but they would much rather retain that margin than pay it out for your representation. Therefore, they take the stance that, if your Realtor® is not with you during your first visit to the community, the Builder's advertising must be the reason you found the community, and will thus serve as the procuring cause (see "Myth-Understanding 1") if you decide to purchase there. The Builder will not pay your agent.

Furthermore, if you do move forward with your purchase, with or without independent representation, the Builder will make you sign a disclosure form whereby you acknowledge that the Builder's agents and staff represent the Builder and the Builder only, not you. They may make you feel like you're long-time best friends, but in the end, the Builder's employees are obligated to do whatever they can within the confines of the law and company policy to enhance the Builder's bottom line. Shouldn't you have someone looking out for you?

Implications for the buyers of Phoenix Arizona Real Estate:

Whether you’re considering a new home or a resale home, having an experienced Realtor on your side can:

-Help you negotiate more effectively with the Builder. In today's market, a good Realtor® can often save their clients several thousand dollars above and beyond than the Builder's advertised incentives. At worst, having a Realtor on your side won't cost you a dime!

-Review contracts, addenda, disclosures, governing documents, and Public Reports for red flags. In contrast to a residential resale transaction, a new home transaction is governed by documents that are created and drafted by the Builder. They are not the same Arizona Association of Realtors® forms that guide the majority of transactions. An experienced Realtor® will have seen enough Builders' contracts that he or she may be able to spot 'holes' or potential adverse implications before they arise, saving you time, money, and aggravation.

-Broaden your horizons. A busy Buyer's Agent may know of a new home community that even the best targeted search methods overlook. As an expert on today's market, he or she may introduce you to a community that is perfect for you that you would have otherwise never found.

Written by Justin Lombard