Buying lot from developer, use agent, questions…

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RubyTuesday
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Buying lot from developer, use agent, questions…

Post by RubyTuesday »

Hi,

We are likely to relocate to area about 600 miles away. We recently visited area and looked at a number of existing homes and drove through neighborhoods and new developments.

We haven’t interviewed or talked with a local agent yet.

We are very interested in exploring buying a lot in a development that we like, and have a few questions.

- does it make sense to engage a local agent if we plan to buy a lot from a developer? I assume developers will pay a buyers agent commission, but that not having an agent will likely not save us money.

- I also assume the developer’s sales staff are agents and if we let them show us the property before we engage an agent, our agent may not be eligible for a commission. Is that your understanding?

The lot is in a hot market and lots are starting to go fast. Does it make sense to contract for the lot ASAP with broad enough contingencies to be able to get out if we have concerns / issues?

We’ve bought and sold homes before, but never bought land and built… starting our research now. Will have additional questions in this thread soon…
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
mkc
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Re: Buying lot from developer, use agent, questions…

Post by mkc »

RubyTuesday wrote: Mon Aug 02, 2021 5:38 pm We are very interested in exploring buying a lot in a development that we like, and have a few questions.

- does it make sense to engage a local agent if we plan to buy a lot from a developer? I assume developers will pay a buyers agent commission
It will depend on the community, and whether the developer is also the builder, or if it is on MLS.

If the developer is also the builder or requires you to use one of their builders (a "master planned community"), unlikely they will pay a buyers agent commission. If the lot is listed in MLS, then your agent would likely get part of the commission.
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RubyTuesday
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Re: Buying lot from developer, use agent, questions…

Post by RubyTuesday »

mkc wrote: Mon Aug 02, 2021 6:12 pm
RubyTuesday wrote: Mon Aug 02, 2021 5:38 pm We are very interested in exploring buying a lot in a development that we like, and have a few questions.

- does it make sense to engage a local agent if we plan to buy a lot from a developer? I assume developers will pay a buyers agent commission
It will depend on the community, and whether the developer is also the builder, or if it is on MLS.

If the developer is also the builder or requires you to use one of their builders (a "master planned community"), unlikely they will pay a buyers agent commission. If the lot is listed in MLS, then your agent would likely get part of the commission.
Thanks.

Developer not builder.
Is MLS listed.
Has an Architectural review board and some build restrictions. Has some pre-approved builders with impact fees charged to non-approved builders.

Let’s assume they will pay an agent commission, do you think an agent will add value to the process?
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
mkc
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Re: Buying lot from developer, use agent, questions…

Post by mkc »

RubyTuesday wrote: Mon Aug 02, 2021 6:22 pm
Thanks.

Developer not builder.
Is MLS listed.
Has an Architectural review board and some build restrictions. Has some pre-approved builders with impact fees charged to non-approved builders.

Let’s assume they will pay an agent commission, do you think an agent will add value to the process?
Unless you are paying the buyers agent's commission and you are trying to decide between communities, I don't see how having an agent will bring any more benefit. If you've already decided on the community and a lot or lots, what do they bring to the table?
TropikThunder
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Re: Buying lot from developer, use agent, questions…

Post by TropikThunder »

RubyTuesday wrote: Mon Aug 02, 2021 6:22 pm Let’s assume they will pay an agent commission, do you think an agent will add value to the process?
I find it reassuring that I can have someone drive by and check on construction progress when I live 1,500 miles from the build site. Or at least that the builder knows I could do that.

Also, real estate is local as they say, and a practice that may seem odd to you could be perfectly normal - your agent would know these things. I don’t see any harm in using one, and you won’t save any money on the commission if you don’t. But as you said you generally can’t bring one in after having visited the site and made contact with the seller’s agent.
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RubyTuesday
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Re: Buying lot from developer, use agent, questions…

Post by RubyTuesday »

TropikThunder wrote: Tue Aug 03, 2021 1:10 am
RubyTuesday wrote: Mon Aug 02, 2021 6:22 pm Let’s assume they will pay an agent commission, do you think an agent will add value to the process?
I find it reassuring that I can have someone drive by and check on construction progress when I live 1,500 miles from the build site. Or at least that the builder knows I could do that.

Also, real estate is local as they say, and a practice that may seem odd to you could be perfectly normal - your agent would know these things. I don’t see any harm in using one, and you won’t save any money on the commission if you don’t. But as you said you generally can’t bring one in after having visited the site and made contact with the seller’s agent.
I’ve already contacted developer to get list of available lots and to ask about HOAs, etc. Do you think this locks out my realtor if I select one now?

I would also find it reassuring to have someone dropping by and checking in. But to be clear, my original question was about the lot. I assume I could still have agent involved when selecting builders unless there’s little value.
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
chazas
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Re: Buying lot from developer, use agent, questions…

Post by chazas »

Find a buyer’s agent who will rebate part of their commission.
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RickBoglehead
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Re: Buying lot from developer, use agent, questions…

Post by RickBoglehead »

RubyTuesday wrote: Tue Aug 03, 2021 6:00 am
TropikThunder wrote: Tue Aug 03, 2021 1:10 am
RubyTuesday wrote: Mon Aug 02, 2021 6:22 pm Let’s assume they will pay an agent commission, do you think an agent will add value to the process?
I find it reassuring that I can have someone drive by and check on construction progress when I live 1,500 miles from the build site. Or at least that the builder knows I could do that.

Also, real estate is local as they say, and a practice that may seem odd to you could be perfectly normal - your agent would know these things. I don’t see any harm in using one, and you won’t save any money on the commission if you don’t. But as you said you generally can’t bring one in after having visited the site and made contact with the seller’s agent.
I’ve already contacted developer to get list of available lots and to ask about HOAs, etc. Do you think this locks out my realtor if I select one now?

I would also find it reassuring to have someone dropping by and checking in. But to be clear, my original question was about the lot. I assume I could still have agent involved when selecting builders unless there’s little value.
No, that doesn't lock out a buyer's agent.
Do you have a real estate lawyer?
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RubyTuesday
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Re: Buying lot from developer, use agent, questions…

Post by RubyTuesday »

RickBoglehead wrote: Tue Aug 03, 2021 6:35 am
RubyTuesday wrote: Tue Aug 03, 2021 6:00 am
TropikThunder wrote: Tue Aug 03, 2021 1:10 am
RubyTuesday wrote: Mon Aug 02, 2021 6:22 pm Let’s assume they will pay an agent commission, do you think an agent will add value to the process?
I find it reassuring that I can have someone drive by and check on construction progress when I live 1,500 miles from the build site. Or at least that the builder knows I could do that.

Also, real estate is local as they say, and a practice that may seem odd to you could be perfectly normal - your agent would know these things. I don’t see any harm in using one, and you won’t save any money on the commission if you don’t. But as you said you generally can’t bring one in after having visited the site and made contact with the seller’s agent.
I’ve already contacted developer to get list of available lots and to ask about HOAs, etc. Do you think this locks out my realtor if I select one now?

I would also find it reassuring to have someone dropping by and checking in. But to be clear, my original question was about the lot. I assume I could still have agent involved when selecting builders unless there’s little value.
No, that doesn't lock out a buyer's agent.
Do you have a real estate lawyer?
Don’t have a real estate lawyer yet, but plan to engage one.

What’s best way to find reputable RE attorney 600 miles away? Would asking a realtor we hire be good approach?
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
mkc
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Re: Buying lot from developer, use agent, questions…

Post by mkc »

TropikThunder wrote: Tue Aug 03, 2021 1:10 am
RubyTuesday wrote: Mon Aug 02, 2021 6:22 pm Let’s assume they will pay an agent commission, do you think an agent will add value to the process?
I find it reassuring that I can have someone drive by and check on construction progress when I live 1,500 miles from the build site. Or at least that the builder knows I could do that.
Not the role of a real estate agent, especially when this is the purchase of just a lot.
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Re: Buying lot from developer, use agent, questions…

Post by Golf maniac »

RubyTuesday wrote: Mon Aug 02, 2021 5:38 pm Hi,

We are likely to relocate to area about 600 miles away. We recently visited area and looked at a number of existing homes and drove through neighborhoods and new developments.

We haven’t interviewed or talked with a local agent yet.

We are very interested in exploring buying a lot in a development that we like, and have a few questions.

- does it make sense to engage a local agent if we plan to buy a lot from a developer? I assume developers will pay a buyers agent commission, but that not having an agent will likely not save us money.

- I also assume the developer’s sales staff are agents and if we let them show us the property before we engage an agent, our agent may not be eligible for a commission. Is that your understanding?

The lot is in a hot market and lots are starting to go fast. Does it make sense to contract for the lot ASAP with broad enough contingencies to be able to get out if we have concerns / issues?

We’ve bought and sold homes before, but never bought land and built… starting our research now. Will have additional questions in this thread soon…
In your original post you state you want “broad enough contingencies to be able to get out if we have concerns / issues.” I highly doubt any developer in a hot market with lots selling fast is going to give you an out. You may be able to sell the lot to someone else and maybe even make a profit. You can always ask for contingencies but I would be surprised if the developer allowed anything that would simply let you walk.
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RubyTuesday
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Re: Buying lot from developer, use agent, questions…

Post by RubyTuesday »

Golf maniac wrote: Tue Aug 03, 2021 9:21 am
RubyTuesday wrote: Mon Aug 02, 2021 5:38 pm Hi,

We are likely to relocate to area about 600 miles away. We recently visited area and looked at a number of existing homes and drove through neighborhoods and new developments.

We haven’t interviewed or talked with a local agent yet.

We are very interested in exploring buying a lot in a development that we like, and have a few questions.

- does it make sense to engage a local agent if we plan to buy a lot from a developer? I assume developers will pay a buyers agent commission, but that not having an agent will likely not save us money.

- I also assume the developer’s sales staff are agents and if we let them show us the property before we engage an agent, our agent may not be eligible for a commission. Is that your understanding?

The lot is in a hot market and lots are starting to go fast. Does it make sense to contract for the lot ASAP with broad enough contingencies to be able to get out if we have concerns / issues?

We’ve bought and sold homes before, but never bought land and built… starting our research now. Will have additional questions in this thread soon…
In your original post you state you want “broad enough contingencies to be able to get out if we have concerns / issues.” I highly doubt any developer in a hot market with lots selling fast is going to give you an out. You may be able to sell the lot to someone else and maybe even make a profit. You can always ask for contingencies but I would be surprised if the developer allowed anything that would simply let you walk.
Good point. Do you think contingencies around suitability to build or get permits etc would be accepted in hot market? The lot is in mountainous region but slope isn’t terrible and there are houses on adjacent very similar lots.
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
TropikThunder
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Re: Buying lot from developer, use agent, questions…

Post by TropikThunder »

mkc wrote: Tue Aug 03, 2021 8:40 am
TropikThunder wrote: Tue Aug 03, 2021 1:10 am
RubyTuesday wrote: Mon Aug 02, 2021 6:22 pm Let’s assume they will pay an agent commission, do you think an agent will add value to the process?
I find it reassuring that I can have someone drive by and check on construction progress when I live 1,500 miles from the build site. Or at least that the builder knows I could do that.
Not the role of a real estate agent, especially when this is the purchase of just a lot.
Oh I thought they were eventually going to buy a house to put on the lot. I didn't know they were just buying the land.
delamer
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Re: Buying lot from developer, use agent, questions…

Post by delamer »

The sales agents for the builders in our development (contract signed about 2 years ago) were not licensed realtors. So they weren’t covered by the realtors’ commission structure.

Our realtor got a commission, but a low one (on base price of house we chose, so excluding our lot premium and any upgrades to house).
Last edited by delamer on Tue Aug 03, 2021 6:02 pm, edited 1 time in total.
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Kenkat
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Re: Buying lot from developer, use agent, questions…

Post by Kenkat »

RickBoglehead wrote: Tue Aug 03, 2021 6:35 am
RubyTuesday wrote: Tue Aug 03, 2021 6:00 am
TropikThunder wrote: Tue Aug 03, 2021 1:10 am
RubyTuesday wrote: Mon Aug 02, 2021 6:22 pm Let’s assume they will pay an agent commission, do you think an agent will add value to the process?
I find it reassuring that I can have someone drive by and check on construction progress when I live 1,500 miles from the build site. Or at least that the builder knows I could do that.

Also, real estate is local as they say, and a practice that may seem odd to you could be perfectly normal - your agent would know these things. I don’t see any harm in using one, and you won’t save any money on the commission if you don’t. But as you said you generally can’t bring one in after having visited the site and made contact with the seller’s agent.
I’ve already contacted developer to get list of available lots and to ask about HOAs, etc. Do you think this locks out my realtor if I select one now?

I would also find it reassuring to have someone dropping by and checking in. But to be clear, my original question was about the lot. I assume I could still have agent involved when selecting builders unless there’s little value.
No, that doesn't lock out a buyer's agent.
Do you have a real estate lawyer?
I ran into this situation a number of years ago and the builder indicated that since we had contacted them first, they would not cover any agent commission and would increase the price of the house if we wanted to use a buyer’s agent. We ultimately ended up not building with them.
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F150HD
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Re: Buying lot from developer, use agent, questions…

Post by F150HD »

RubyTuesday wrote: Mon Aug 02, 2021 5:38 pm we plan to buy a lot from a developer...
worth reading....

viewtopic.php?f=2&t=353491

Builder owns our lot and still hasn't started build that was supposed to complete 3 months ago... what are our options to get out of it?
ZMonet
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Re: Buying lot from developer, use agent, questions…

Post by ZMonet »

As another poster stated, if you're going to use a Realtor, you might as well go with one that rebates some of the commission--someplace like Redfin.
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Re: Buying lot from developer, use agent, questions…

Post by Golf maniac »

RubyTuesday wrote: Tue Aug 03, 2021 11:27 am
Golf maniac wrote: Tue Aug 03, 2021 9:21 am
RubyTuesday wrote: Mon Aug 02, 2021 5:38 pm Hi,

We are likely to relocate to area about 600 miles away. We recently visited area and looked at a number of existing homes and drove through neighborhoods and new developments.

We haven’t interviewed or talked with a local agent yet.

We are very interested in exploring buying a lot in a development that we like, and have a few questions.

- does it make sense to engage a local agent if we plan to buy a lot from a developer? I assume developers will pay a buyers agent commission, but that not having an agent will likely not save us money.

- I also assume the developer’s sales staff are agents and if we let them show us the property before we engage an agent, our agent may not be eligible for a commission. Is that your understanding?

The lot is in a hot market and lots are starting to go fast. Does it make sense to contract for the lot ASAP with broad enough contingencies to be able to get out if we have concerns / issues?

We’ve bought and sold homes before, but never bought land and built… starting our research now. Will have additional questions in this thread soon…
In your original post you state you want “broad enough contingencies to be able to get out if we have concerns / issues.” I highly doubt any developer in a hot market with lots selling fast is going to give you an out. You may be able to sell the lot to someone else and maybe even make a profit. You can always ask for contingencies but I would be surprised if the developer allowed anything that would simply let you walk.
Good point. Do you think contingencies around suitability to build or get permits etc would be accepted in hot market? The lot is in mountainous region but slope isn’t terrible and there are houses on adjacent very similar lots.
The developer should be able to assure you the lot can be built on. At one time we owned a mountain lot and the builders all stated they could hang a house almost anywhere on the mountain. We ended up selling the lot but checking on ability to build with the builders is not a bad idea. Will it be on municipal water and sewer? If not he should be able to provide a perk test for the lot for septic tank and give you some local companies to check drilling for a well (ie how deep to hit water and cost).
Topic Author
RubyTuesday
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Re: Buying lot from developer, use agent, questions…

Post by RubyTuesday »

Golf maniac wrote: Wed Aug 04, 2021 10:29 am
RubyTuesday wrote: Tue Aug 03, 2021 11:27 am
Golf maniac wrote: Tue Aug 03, 2021 9:21 am
RubyTuesday wrote: Mon Aug 02, 2021 5:38 pm Hi,

We are likely to relocate to area about 600 miles away. We recently visited area and looked at a number of existing homes and drove through neighborhoods and new developments.

We haven’t interviewed or talked with a local agent yet.

We are very interested in exploring buying a lot in a development that we like, and have a few questions.

- does it make sense to engage a local agent if we plan to buy a lot from a developer? I assume developers will pay a buyers agent commission, but that not having an agent will likely not save us money.

- I also assume the developer’s sales staff are agents and if we let them show us the property before we engage an agent, our agent may not be eligible for a commission. Is that your understanding?

The lot is in a hot market and lots are starting to go fast. Does it make sense to contract for the lot ASAP with broad enough contingencies to be able to get out if we have concerns / issues?

We’ve bought and sold homes before, but never bought land and built… starting our research now. Will have additional questions in this thread soon…
In your original post you state you want “broad enough contingencies to be able to get out if we have concerns / issues.” I highly doubt any developer in a hot market with lots selling fast is going to give you an out. You may be able to sell the lot to someone else and maybe even make a profit. You can always ask for contingencies but I would be surprised if the developer allowed anything that would simply let you walk.
Good point. Do you think contingencies around suitability to build or get permits etc would be accepted in hot market? The lot is in mountainous region but slope isn’t terrible and there are houses on adjacent very similar lots.
The developer should be able to assure you the lot can be built on. At one time we owned a mountain lot and the builders all stated they could hang a house almost anywhere on the mountain. We ended up selling the lot but checking on ability to build with the builders is not a bad idea. Will it be on municipal water and sewer? If not he should be able to provide a perk test for the lot for septic tank and give you some local companies to check drilling for a well (ie how deep to hit water and cost).
It’s on municipal sewer and water, so those risks are mitigated. Thanks!
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
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