Buying via builder or Agent?

[Zhouse01]

There is a unit complex being built near my parents home at the moment. The builder basically told us they can give us about 8-10k discount by not going through the agent which i thought was pretty cool.

But an agent friend told me that the agents will still be able to get the price lower than that if i went through them because it wouldnt make any sense to be the agent, pay for all the advertising, and then get undercut by the builders.

I dont know who the believe lol as i dont want to go to the agent if im saving like 10k by going through the builder.

 

[urban cowboy]

go direct to the builder...

an agent can't match the price of the builder unless he is doing it for zero comms. The builder selling it himself doesn't pay comms (if he is smart enough to tick the right box on the listing form) and hence doesn't have to have it built into his price.

 

[Zhouse01]

why would the agent be listing the builders units if the builder can under cut them which is what i dont get.

 

[urban cowboy]

to sell them - builders aren't generally licensed to sell real estate - nor can they often be bothered dealing with joe-public.

and many members of the public won't just rock up and talk to the bloke covered in paint and plaster etc.

agents also have re.com and usually have databases of buyers to play with - so the builder pays for all that in the form of comms...

 

[rugrat]

easy enough to check, I would have thought. Get a price from both, compare and then play them off each other.

 

[Perp]

why would the agent be listing the builders units if the builder can under cut them which is what i dont get.

Most people find out about the property through the agent's advertising; they never talk directly to the builder (as you have done). Once the agent has "introduced" you to the property, ie by answering a phone call, taking you for an inspection, etc, then the builder is unable to sell to that person privately; they have to sell through the agent and can't negotiate directly with the prospective buyer. To do so would be defrauding the agent of their commission, and that's a very big no-no, both ethically and legally.

 

[Cashflow]

The builder may have entered into an open agreement with the REA. This way he can sell the units himself (as long as not introduced by the agent) or through the REA (paying him a commission for his effort).

To ensure this $10K is legit I suggest you employ the services of an accredited independent valuer to carry out a valuation. This will be a non-biased valuation (compared to a price put forward from the builder/REA or their recommended financier). This should then be the basis of your negotiations. It will also inform you as to where the property sits in the market and can give you an insight as to how easy it will be to sell later down the track. It will point out the strengths and weaknesses of the property as well.

You should also get a building report (one that is designed for newly completed buildings). Don't assume because it is new there will be no problems. This report will point out anything that may become a concern in the future.

Especially have the waterproof membrane thoroughly checked - a friend of mine didn't bother with a building report (because the building was new). Twelve months later and the entire complex has major problems and they are having trouble find a tenant because of major water damage! It will take many years in court for the problem to hopefully be resolved and repairs carried out.

If the unit is still in its completion stage there will be quite a few clauses that you will need to have in the contract so as to guarantee the standard of work to be carried out. You can also arrange to view building progress reports.

Look for a solicitor who has this kind of experience.

Keep us informed of your progress.

Peter
www.cashflowcalculators.com.au
www.privaterealestate.net.au