The Different Ways that Builders Release Units... The good? The Bad?

COLUMBUS, OH

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CONDO CHICKS

Buzzer

The Different Ways that Builders Release Units... The good? The Bad?

For some reason, these forum topics always jump at me in the middle of the night. It's a good thing I keep my pad and pen at my beside so I don't forget to jot down these potentially debating conversations. :-)
As we all know, builders have different ways of launching projects which I can guarantee can cause some serious uproar amongst agents. There is one project that just recently launched and I find it very odd as to how units have been released. The builder essentially handed over a few hundered units to a few agents. In return these agents go and sell the units to other agents as opposed to clients. I'm curious to see what your opinion is here both agents and builders. It seems to me that agents who get the units from the builder don't really have their own clients. If you have access to the builder (a good relationship) the builder will give you units that you can then distribute to other agents. I find it unfair that if you have a true client, you have to go through another agent (pay them commission) to get a unit. Thoughts?
There are some buliders out there that closely monitor this process to ensure that there is no co operation amoungst agents. I honestly don't think it's fair that sometimes agents have to go through other agents to just get a unit for a client. Am I right to think this way? A lot of my colleagues who have tons of clients refuse to co operate for units with agents. It's their pride! It's too bad because it's the builder's loss of building a strong relationships with another agent.

Toronto / New Home Q&A

MARCO DIFOTI

Senior Buzzer

550

The new home industry has gone broker crazy!
Realtors went from being a part of the buying process to help their clients make informed decisions, to being some sort of "get rich quick scheme" where Realtors are no longer acting on their clients best interest, but are acting in some sort of weird game.
It appears that some builders know this, and are trying to bring the process back to normal procedures, where some builders are using the Realtors and are seeing them simply as marketing expense, and seeing the commissions paid as a an alternative to interest on financing.
If a builder is playing this game, then play it back. If they are not giving you suites to sell, then take your business elsewhere.

MOO STASH

BabbleBee

301

From what you are saying, a select group of Realtors are working as condo brokers and pushing a builder's units onto other realtors?
Do you still get paid a commission? What is the commission? What is the big problem with this process?
Sounds like the builder is pivoting their marketing budget, and using his select group of realtors as the marketers, opposed to paying the tens of thousands of dollars for traditional advertising.
If you are still making a buck, and your client wants to live there, then what is the big deal?
Sorry, but I am not too familiar with this process, and maybe I am not fully understanding it.

CONDO CHICKS

Buzzer

What is happening is that builders are releasing units to agents that don't necessarily have clients. These agents then go and try to sell the units to other agents who in fact have clients. The agents representing the "real" clients will not get the full commission earned as they have to essentially "pay off" the agent who has the unit. It can be a very frustrating process for agents who have clients. Look at it this way. You see a BMW that you want to buy at a dealership. However BMW won't sell it to you. You have to go buy the same BMW that the dealership has through a middle man AND pay him for being the middle man. The middle man takes you to the same dealership and you sign the deal. Essentially you would still get a commission, depending on what the middle man who has the condo units decides to keep for himself.

MOO STASH

BabbleBee

301

^^Will the units ever be available through the builder? Or, is the entire thing being sold this way?
Just to ensure that I understand the process:
- The builder has units, and hires a brokerage (Brokerage A) to sell them.
- The Brokerage (A) then splits up the units amongst a whole bunch of "VIP" agents who do not work for Brokerage A and do not have clients.
- These bunch of VIPs then try to sell the units to an other set of Normal Realtors.
- The Normal Realtors then try to find a client, who buyes it from VIP, who in turn gets paid by Brokerage A, who gets paid by the builder?
That sounds pretty insane. I sounds like it would be a cool idea if Brokerage A was not involved, and the builder just went straight to the VIPs, and as such the VIPs would act as Brokerage A.