Source: Chicago Agent Magazine —
The relationship between homebuilders and real estate brokers is constantly changing and getting cozier in today’s market.
Brokers in the business of representing those buying and selling residential real estate will often tell you that one of their favorite things about the job is that every day is different. And while each transaction does come with its own nuances and challenges, many aspects of each sale remain the same — it is typically known, for instance, what percentage will be tied to the commission and generally how long it will take for the transaction to close.
But all bets are off in the world of new-construction home sales, where the relationship between builders and brokers often changes with the strength or weakness of the local market. In a tough economy, buyer’s brokers find themselves being courted by builders with larger commissions and bonuses, sometimes in the tens of thousands of dollars. But when new homes are selling rapidly, like they have been over the last few years, agents not only see lower financial incentives, but often find themselves in direct conflict with homebuilders.
Who’s your agent?
Jessica Kelly, a buyer’s agent at Weinberg Choi Residential, Keller Williams ONEChicago, found herself in such a situation recently, while working with out-of-state clients looking to buy a newly built home in the western suburbs. She’d spent about 30 hours with them conducting an in-depth buyer consultation, mapping out possible homes in new developments and taking them on a tour of homes in the area.
Kelly and her clients were both doing their own research and sharing information. “In the process of coming in for showings, they reached out to several developers to gather more information,” she explained, noting that’s where she found herself at odds with the builder.
A sales associate at the company contacted Kelly’s clients asking if they “intended to bring an agent” during the showing.
The email continued: “The reason I’m asking is because usually, unless they developed the relationship (meaning they brought you to [the builder]) they are not a necessary part of the transaction with a custom home — as we do all of the work involving the lot, home, etc. There [sic] commission is paid for by you, so just wanted to inform you of this.”
Kelly was well aware that homebuilders will sometimes try to claim agency on a client, so she advised them not to sign anything at the showing or online. Signing an intake form at a showing or even just on a builder’s website can create challenges on who represents the client down the road, she explained.
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