Will Portola Springs Become a Ghost Town?

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grewupinirvine,

thanks for your post as well. i just realized that you had a post before nirvinerealtor.

this forum has been really informative and i appreciate everyone who has taken the time to post and share their experience.

thanks again everyone!
 
1sttime,

I do not know how to put this so it sounds un-biased.

My season buyers just want to have representation so they have professionals handle all the details for them. This make their life easier. Sometimes, they give me the power of attorney to make purchases for them.

Having an agent may or may not cost you more.

It really depends on the type of agent you have and the value that you put for your time. Once you become a seasoned buyer, which you will, then you will know what I am talking about.
 
nirvinerealtor,

Actually, when a seller (homebuilder) contemplates whether or not to accept an offer, he will consider, among other things, the net sales proceeds..which basically means sales price minus marketing expenses (e.g. commissions, incentives such as free or discounted upgrades, buydowns, etc.), title and closing costs, in-house transaction costs. legal costs... among others. Yes, it is true that the buyers don't have to pay for the realtor's commission, but it DOES affect the bottom line for the buyer directly. So imagine a $30,000 commission over the life of the loan. By my calculation, it is over $55,000 that I could have saved if I didn't use the service of a realtor.
 
lllrvine,

The builders are so motivated to move inventory so I think builder would want to give buyer the discount. I have not seen this offers to buyers in the past though.

Builder pays brokers commission for the purpose of sharing the work load to get buyer to close escrow. As buyers are wavering, someone needs to constantly keep the buyer in escrow; this is the biggest job that agents do. So what incentive does builder have to give the wavering buyers the discount?
 
"The builders are so motivated to move inventory so I think builder would want to give buyer the discount."

"Builder pays brokers commission for the purpose of sharing the work load to get buyer to close escrow. As buyers are wavering, someone needs to constantly keep the buyer in escrow; this is the biggest job that agents do. So what incentive does builder have to give the wavering buyers the discount?"

nirvine,

I'm lost now. So are you saying that the builder does give the buyer the incentives in addition to your commissions? If so great - I guess everyone's happy - or atleast made whole.

In the deals you are negotiating now - are they or aren't they receiving benefits outside of your taking care of everything for them?

Maybe I'm not seasoned enough to appreciate overspending in this market and having my agent "push me through escrow" while getting paid with the incentive dollars I would have received if I had walked in on my own. Please clarify.

I apologize for my tone, but it just does not seem like a fair system.

Your stating that your "biggest job" is to keep the "buyer in escrow" rather than look out for the buyer's best interest concerns me.
 
1sttime,

Thank you for being polite to me. I am sure you have heard that builders experience 10%, 25%, 40%, 60%, or even 80% cancelation rate.

Just think this way. When builders increases prices in each phase, the previous phase buyers naturally want to close escrow. No effort here to keep the buyers in escrow

When prices stay flat or dropping, naturally buyers want to back out. When emotions run high, it helps to have a middle man to smooth things out. An agent will remind you why you wanted to buy in the first place. After all, you wanted to buy a house, right?

Agents have a fudicuary duty to their clients, our job is to look out for your best interest or we suffer the consequences like bad reputation or law suits.

Buying a home is a very stressful experience, especially if you are a first time home buyer. When you get your offer accepted, you will experience buyer remorse the next day, guarranteed.
 
nirvine,

Thanks for the clarification on the escrow issue. I see how a third party (although not completely unincentivized third party) agent could be necessary.

You still have not answered my question about your statements about what the builder will and will not offer the buyers. In the deals you are negotiating, can the buyers still receive incentives? In your previous post, the answer was no. But in the post to IIIrvine, you seemed to indicate otherwise.

Again, in a flat or declining market, "buyers would want to back out." As a potential buyer, finding out that I could have had 35k working for me taken away simply because I walked in with you would give me cause to walk away.
 
1sttime,

I normally see builders take the buyer incentives away, or increase the sale price, and apply that to agent's commission.

I am in negotiation on the sales price and can not say more.

I do not see why you not can negotiate with builder as a buyer. Let us know if you have any luck.
 
nirvine,

I don't understand why you find it so hard to answer the question directly.

"I do not see why you not can negotiate with builder as a buyer." I absolutely intend to negotiate as the buyer, but I figured if I got a straight answer from you, thats atleast 25k that I would have in addition to the 35k mentioned above. Even, if I had to ask one of my friends to come in with me -because everyone has at least one friend or family member that is real estate licensed.

In any event, it is what it is. Best of luck in your negotiations! Hopefully your buyers come out atleast as well as you.
 
1sttime,

In the market we're in now, builders have been offering refferal kickbacks, military discounts and other incentives on top of the usual stuff. For example, our project is offering $25k in incentives to everyone that walks in (for upgrades or closing). If a broker walks in, we also offer 3% kickback on top of that. But 3% of 600k is $18k but there is no way we'd give the borrower 25k + 18k in incentives because it'll set a bad precedent.

The builders also have their bottom line and like IIIrvine said, they will consider any offers but it all comes down to their profit margin. Just don't allow the smug sales people intimidate you into settling for their 1st offer.

I apologize if this doesn't make too much sense but I'm about to pass out. Have a good night!
 
These are some tips on the best way to buy a new home. Raymond, I apologize for giving some insider tips but this is what people come here for.

If you can you want to buy standing inventory that is ready to move in to before the homebuilder's quarter end or even better yet their fiscal year end. Make sure you know the builder's fiscal year end as December is not the fiscal year end for all of them. Next I do recommend an agent if you have one that is willing to give back most of the commission if not all to you at the close of escrow. If you do not have someone like this then I believe that redfin, buyside and the zips out there will work as well but you do have to disclose this upfront. Too many people buy then bring in their cousin/brother or pet with a RE license to get the commission and the builders got wise on this and disclose that this the way it is. So if you have an agent tell them you do. Lurk around the tract as the buyers (if you can find them) will tell you the incentives they received and check here for what is being offered and make sure you get more. They will offer the same deal with or without the commission because the commission is a tax write off for the builder. If they are not offering the same price with or without the commission then there are legal problems they could face. At quarter or year end you would be surprised what they will do to sell inventory. Such as I will buy if you can give me all your incentives but I have to have an interest rate on a 30 year fixed of 5%. Think walking away at the car dealership and yes this is a real example.

Now if you cannot buy standing inventory then again I recommend an agent who will give you most if not all the commission back at escrow. If the builder lowers the price in the next phase from your phase then the agent's fudciary duty is to go back to the homebuilder and get at least the same deal and should do better. The agent's fudciary duty is to you not the homebuilder and if they do not do this and they are a Realtor then this is a violation of their code of ethics. You hired them, not the builder. Yes they should help save the deal from falling out but that is what the homebuilder pays their sales agents for. If an outside agent is going to get paid they should do whatever it takes to get their buyer the best deal and not do what ever it takes to keep a higher price than everyone else just because you love the house. Do you really think the builder wants the risk of another cancellation?
 
1sttime,

ramond and graphrix said it all.

graprix,

I do have a question regarding commission for the Realtors:

You reccomend finding a Realtor that is willing to give most or all the commission. Yet, this Realtor has the fudiciary (LEGAL) duty to continuously monitor and negotiate with builder to get this buyer the best price/services. Sounds like a Realtor who is willing to work hard for free and taking legal risk; Do this kind of Realtor even exist?

I work in the "warm market". My repeating and referring clients always want to make sure that I am well compensated for so I can concentrate on providing them the best service and get them the best deal. Therefore, I am happy doing my job as a Realtor. I can not imagine otherwise.
 
graphrix,

That's ok. I don't really care since I would use the same methods when it comes to my time to buy.

You are right about the cancellations. Builders hate it and will stretch their dollars just to close if the delivery date is coming and you're at risk of walking away from the deal. Just like in car sales, even if they sale a home for $0 profit, "break even", they've already made money through management fees and such. Plus, with several of these projects totaling over 100-200 homes, there is plenty of profit to be made in the final phases. In the early stages of the project, our only goal is to build momentum and close homes.

Of course, TIC probably limits the amount of "loss" each builder can take so figure out what their bottom line is.
 
1sttimebuyer - You sound like someone who could negotiate the same if not better price than an agent. If you would like some more info continue reading below and ask any other questions you may have.

NIR - My point was not that an agent representing a buyer shouldn't get paid for their time and skills but if they are going to get paid by representing the buyer their fudiciary duty is to get the buyer the best deal. If they are not doing this by just keeping the deal together when the builder is lowering prices without negotiating for the same price then their fudiciary is now with the builder and their higher commission. This is unethical and like I said a violation of the Realtor code of ethics and it is becoming more and more clear that the are not being enforced. Also if you have lived in OC for more than three days then chances are you know someone in the industry or have a family member in the industry. I have two people that would do what I speak of that I know from outside me being in the business. One of which I know would refund all of the commission even if I insisted that they take something for their time. Not everyone may know of a person like this and that is why I said to look into redfin, buyside and zip realty. I have no clue about the level of service but even if you had to do all of the negotiating yourself and you bought the same exact house for the same exact price as your neighbor who didn't use these services or an agent but you got some of the commission back you got the better deal. Personally I think with the info you can get here on the prices, incentives and talk to other buyers of the tract then you can negotiate just as great of a deal with or with out an agent. If you are not confident in your negotiating skills or the new home sales agent is really awesome and makes you feel like a genius as you are walking away from the sales office for paying the higher price after you tried to negotiate a better price then hire an agent. Just don't hire an agent who is more concerned with reminding you of why you decided to buy the house when the builder drops the price $100k and doesn't go back to the builder to get you the better price.

Is it starting to make sense why there is serious distrust for agents when you make statements like "I normally see builders take the buyer incentives away, or increase the sale price, and apply that to agent's commission. " When this is complete BS proven by one who is in the industry and one who was. Your fudiciary duty is to make sure this doesn't happen!

"Builder pays brokers commission for the purpose of sharing the work load to get buyer to close escrow. As buyers are wavering, someone needs to constantly keep the buyer in escrow; this is the biggest job that agents do. So what incentive does builder have to give the wavering buyers the discount?" They do not care who saves the deal or what it costs but it isn't the buyer's agent they are paying it is their sales agent. They are paying agents to bring people in to get sales not have people bring in agents that help save the deal when they decide to drop prices. Remember it wasn't that long ago when you got paid $0 and it wasn't until they needed agents to bring people in that they started offer co-ops.

I could go on but it is becoming clear that you do not actually read what people post or at least not the entire post judging by how you tend to avoid the questions that question your motivation or ethics. You still have not answered many of my questions and I don't think you ever will.
 
graphrix,

I appreciate you let me know how you feel. I admit I avoided some of you questions, some was by choice because I did not want to, others "the dog ate it". I hope you understand.

I stated when I joined this blog that I just want to blog, period. I also mentioned that I understood Realtors are not well liked. I had to disclose that I am an agent because that is what I am. I want you to be fair to me. No one knows who I am as a person so I hope no one should even try to question my motivation or ethics. What good does that do. I am just an individual who is sincere and wishes to be helpful, just like you. Now, I do have to be careful what I say becasue I am a listing agent in Irvine where my identity could be accidentally exposed, which I do not want to see happened, then I will have to quit this blog. Thank you for your understanding.
 
graphrix and raymond,

Thank you for your sage advice.

nirvine,

What can i say? Thank you for your perspective.

I would hate to see you quit the blog because your view needs to be heard. This forum wouldn't be beneficial to anyone if we all had the same opinions. I believe that understanding each others' mindsets makes us all better negotiaters. Although most people posting here are bears, I'm sure there are plenty of bulls reading this blog that are too shy to post for fear of backlash. I may not always agree with you, but I do commend you on your courage to post and share your experience.
 
1sttime,

I appreciate your comment.

I sense that many of you want to become homeowners, either fist, second, or third or whatever. You are afraid to make bad decisions so you look for confirmation. This is human nature.

Me, I learned that everyone is in different situation, place, background, state-of-mind, the whole spectrum; therefore, I ask for opinions but not for confirmation. I look at myself, and only myself for answers to where I should be. Sounds selfish? yes, however, I accept the responsibility to take care of myself and my family. Whatever decision that I make, I do have back up or exit plans.
 
Sounds like this discussion is coming to an end, but I just wanted to give my 1.5 cents. IMO, if you are buying a new home, you don't need an agent, but if you are buying resale, they will come in handy. So, for those that are buying a new home, find a friend/sister/brother/great-aunt/pet that has an RE license to walk the models with you and let the builder know you have an agent so you can get the commission. And I agree in this case that the "agent" should give you the entire commission amount (maybe you can take them out to dinner as a thank you!).
 
NIR - I know it seems that I may be personally critizing you but it is more as agents as a whole. You just happen to be the only one that we haven't scared off and I do admire your resilience to keep coming back. I have said this before and hopefully this will be the last but when you make statements that I know and you should know that are not true or unethical I am going to call you on it. It is only fair to do that to be helpful to the people who need to be aware of when an agent's best interest is not in the right place. You shouldn't take it personally because I have no clue what you would really do. We both know there are many agents out there that do the same or even worse that are perceived as good agents who get a lot of business and referrals. That doesn't mean that it is right.

I would be very disappointed if you were to leave this blog. You have the guts to come here and offer an opinion that is for the most part the complete opposite of the majority here. You have the knowledge to answer questions that people come here for. Every once in a while you are going to faced with some backlash and I think that should be expected. I know what is like when I comment on housing bull blogs and I have fun with it. Very rarely does it lead to an actual discussion like I can have here with you.
 
graphrix,

Food - I tried Taco Rosa on Monday and I just love the fact that they are in the Market Place. The sitting arrangement inside is so so, I did not want to sit inside. My Jumbo Shrimp plate was excellent. Ah, the black bean was great too.

OK - Fair enough. They say good agents are hard to find. Just like good doctors and good lawyers are hard to come by too. Hmm, why is that? I think that is just the way it is. Just like Men are from Mars and Women are from Venus.

I guess I am gutsy to land on this bearish forum. I think it is going to be fun. I am actually having a hard time finding decent homes for buyers. Why so many buyers looking for good homes? So when it is clear to bears that the market has changed, bears are going to .....

To be honest with you, I was really concerned about the subprime's; however, evidence around me says otherwise. As far as money tightening, I think it's back to normal now. Rates are still great.
 
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