The New Home Sales Center

by admin on April 24, 2010

Ever pull into a new, under construction community and waltz right into the Sales Center for some information?

Of course you have. Everyone does this. It’s fun and the folks in the sales center are typically oh so helpful and chipper.

“How are you today? It’s sooo nice to see you…can I offer you some water, cookies, maybe even a Diet Coke?”

This is fine for casual non-serious buyers but if you are a real buyer with a real timeline, you should go in with your Realtor. A good Realtor will know all the questions to ask and bring a ton of experience into this process.

Take a look at this actual occurrence:

Recently I was in one of these Sales Centers with a client of mine in South Forsyth County. My client was fairly interested and had decided that one or two of the floorplans worked for his young three-kid family. He was taking a look at the lot map, the map of the community with the lot numbers all over it.

He’s a smart guy so he easily identified all the good cul-de-sac lots and lots on low traffic roads, backing up to the woods:

Client: What about Lot 47?
Sales Center
: Yes, very nice lot, cul-de-sac lot, large pie shape, woods in the back. It has a lot premium of $15k.
Client
: Ouch! What a out Lot 53?
Sales Center
: You’re good at picking these! Lot 53 is on The Preserve and has a $12k lot premium.
Client
: Ouch again! Do all the good lots have premiums?
Sales Center
: Un-for-tun-atel-y yes! [smile] …here’s a sheet showing all the lots and premiums.

REALTOR: C’mon. What’s stopping us from putting in an offer at a certain price that completely ignores the Lot Premium?

Sales Center: [hushed secretive type tone] That’s happened before and just between you and I, we definitely waive the Lot Premiums to get a contract done.

So we just saved my Client $15k or more and opened up his options to include all the very best lots in the community.

Here’s another Sales Center myth:

You can get a better price if you do not have a Buyer’s Agent (Realtor) with you because they will discount the Realtor’s commission from the sales price. This one is completely incorrect. To see why, you need to understand what the Sales Center is, and how they operate.

In¬†communities¬†with large national builders, like KB Homes, Centex, etc., the Sales Center is owned, run and operated by the builder itself. In this case, a 3% commission for the Buyer’s Realtor is built into the entire business model. If you show up with no Realtor, you will not get better pricing on anything, the 3% simply gets saved by the corporation. Kudos to the ladies working in there. Also, you will be completely unrepresented, which is very bad for YOU.

In communities with smaller builders, or a community that uses many different builders, the Sales Center will be run by a local Real Estate Brokerage. In this case, all the builders in the community have agreed to a 6-7% total commission on all sales. This is split with the buy-side Realtor and the Sales Cener Brokerage. If you happen to show up with no buy-side Realtor, the Brokerage running the Sales Center will pocket the entire 7%. It does not matter to the Builder that the buyer is unrepresented, they are still paying the Sales Center 7% on every deal. Unfortunately, you will still get no better pricing and most importantly, you will be completely unrepresented. Not good.

How many Sales Center Agents will tell you you might be better off at the competing community down the street?

Hopefully this helps you understand these Sales Centers and what’s happening. By all means, go into them, give them the name of your Realtor, and gather all the info you need. Walk the models, the lots, talk Design Center Options pricing, the whole nine yards.

But if you get serious, take your Realtor in. If you have a good Realtor, you will get a much better deal on pricing, options, lots, extras, you name it!

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