Stonegate...hello broker co-ops

[irvinerealtor]

One question I had is usually how involved is the broker in a new home sale?

It's basically a referral fee since most of the work is done by iPac? Or does iPac contact the broker instead of the buyer in these kind of arrangements?

How much is the broker involved?
As much or as little as you want.  It always helps to make sure you're clear with the broker what your expectations are.

Typically, with new home buyers that I work with, my fee is $2500, and the rest of the broker co-op goes back to them, which they can use any way they wish, and this includes hiring a third-party professional inspector who specializes in new-home construction before the home is occupied.  It is best if the builder allows the credit to run through escrow, to keep the credit as a non-taxable event.  Although many builders are initially against it, most can be persuaded to allow it.  Like any seller, they want the sale to go to completion once it starts.

-IrvineRealtor

 

[usctrojancpa]

One question I had is usually how involved is the broker in a new home sale?

It's basically a referral fee since most of the work is done by iPac? Or does iPac contact the broker instead of the buyer in these kind of arrangements?

How much is the broker involved?
As much or as little as you want.  It always helps to make sure you're clear with the broker what your expectations are.

Typically, with new home buyers that I work with, my fee is $2500, and the rest of the broker co-op goes back to them, which they can use any way they wish, and this includes hiring a third-party professional inspector who specializes in new-home construction before the home is occupied.  It is best if the builder allows the credit to run through escrow, to keep the credit as a non-taxable event.  Although many builders are initially against it, most can be persuaded to allow it.  Like any seller, they want the sale to go to completion once it starts.

-IrvineRealtor

They do push back a little bit initially when I write up the Addendum to credit my buyers a portion of the co-op, but that doesn't last very long.  The builder does prefer the buyer use those credits for upgrades but you won't need to twist their arm in using them for closing costs.

 

[ak]

So if I inform the sales folks at Maricopa to take me off their list and come back with my broker a few months later would that work?  Or I am forever banned from using my broker for a co op? 

 

[shadax]

One question I had is usually how involved is the broker in a new home sale?

It's basically a referral fee since most of the work is done by iPac? Or does iPac contact the broker instead of the buyer in these kind of arrangements?

How much is the broker involved?
As much or as little as you want.  It always helps to make sure you're clear with the broker what your expectations are.

Typically, with new home buyers that I work with, my fee is $2500, and the rest of the broker co-op goes back to them, which they can use any way they wish, and this includes hiring a third-party professional inspector who specializes in new-home construction before the home is occupied.  It is best if the builder allows the credit to run through escrow, to keep the credit as a non-taxable event.  Although many builders are initially against it, most can be persuaded to allow it.  Like any seller, they want the sale to go to completion once it starts.

-IrvineRealtor

You continue to dazzle me.  Good on you.

 

[irvinerealtor]

So if I inform the sales folks at Maricopa to take me off their list and come back with my broker a few months later would that work?  Or I am forever banned from using my broker for a co op? 

I suggest that it is better to focus on what you are paying for the home, rather than the credits that are being offered or not. 

If you wait for the builder to offer the credit (for lending, broker co-op, or upgraded finishings), you might miss out on the lot you want at the price you'd be willing to pay,
and conversely,
If you buy today just because you're getting a small credit, you may lose much more than the value of the credit in future price drops.

With that said, to answer your question...
Builders act as businessmen, and will not let a bona fide buyer walk away if the deal pencils out for them.  Everything is negotiable.

-IrvineRealtor

 

[ps99472]

So if I inform the sales folks at Maricopa to take me off their list and come back with my broker a few months later would that work?  Or I am forever banned from using my broker for a co op? 

I suggest that it is better to focus on what you are paying for the home, rather than the credits that are being offered or not. 

If you wait for the builder to offer the credit (for lending, broker co-op, or upgraded finishings), you might miss out on the lot you want at the price you'd be willing to pay,
and conversely,
If you buy today just because you're getting a small credit, you may lose much more than the value of the credit in future price drops.

-IrvineRealtor

Good points IR, it's kinda like spending $300 at Costco but you justified it by using a $2 coupon.

 

[ak]

So if I inform the sales folks at Maricopa to take me off their list and come back with my broker a few months later would that work?  Or I am forever banned from using my broker for a co op? 

I suggest that it is better to focus on what you are paying for the home, rather than the credits that are being offered or not. 

If you wait for the builder to offer the credit (for lending, broker co-op, or upgraded finishings), you might miss out on the lot you want at the price you'd be willing to pay,
and conversely,
If you buy today just because you're getting a small credit, you may lose much more than the value of the credit in future price drops.

-IrvineRealtor

Good points IR, it's kinda like spending $300 at Costco but you justified it by using a $2 coupon.

Every $$ helps and I hate leaving $$ on the table.  I know which lot i like and I am comfortable with the price.  What irks me is that my friend who will walk in with my broker tomorrow to Maricopa will get broker co op $$ and I will not.  Life isn't fair, but this is ridiculous.  I did what Ipac ask me to do and pre-registered/qualified and now they want to screw me.  My friend who may or may not be qualified with get at least $20K in co op $$.  Ipac will definitely piss of a lot of well qualified buyers for sure if they stick to this policy.

 

[jyeh74]

To think those agents told me "we will never be offering broker co-ops, because we don't have to".

 

[usctrojancpa]

To think those agents told me "we will never be offering broker co-ops, because we don't have to".

When they told me that they aren't offering a broker co-op, the words that I came to my mind were "FOR NOW" and with a small smirk.  I sure hope they weren't thinking this was going to be like 2010 without the free gov't money.  I guess all that "traffic" on the opening dates didn't translate into a lot of sales hence step 1 of increasing sales.

 

[usctrojancpa]

So if I inform the sales folks at Maricopa to take me off their list and come back with my broker a few months later would that work?  Or I am forever banned from using my broker for a co op? 

As IR mentioned, I doubt that TIC would not to lose a solid buyer (especially since they have shown their hand of slow sales).  I would threaten to be taken offer their list and see what happens, they might just change their tone.  I hardly doubt you will be forever banned for using your broker, talk about TIC cutting off their nose to spite their face.  haha

 

[usctrojancpa]

As IR stated, the split of a broker co-op to the buyer should not be the determination whether the buyers buys or does not buy a home.  Money is money and every little bit helps and iPac/TIC is making a lot of money on the sale of these home, but at the end of the day we are taking between 1% to 2% of the purchase price of the home...definitely not large enough to be a deciding factor of whether to purchase a home.  Think of it more as the cherry on top of a sundae.

 

[irvinehomeowner]

The issue here is a buyer comes in and has an agent but the salespeople say they will not offer co-ops. So the buyer, not wanting to waste anyone's time, goes ahead and signs up to prequal because that's what they tell you to do (EVERY SINGLE TIME).

Then they offer the co-op and you bring in your agent... will they not allow it because you already signed up on their prequal list?

That is why I never want to fill out paperwork they ask you to, even those "we just want to track the people who come in" index cards.

I understand they are trying to prevent those "my brother's wife's hairdresser is a broker" situations where the buyer is just trying to capitalize on the credit, but there are legitimate buyers out there who have been working with agents for a long time and to shut them out because of some technicality isn't really kosher.

 

[ak]

Excellent post Irvinehomewner!!  It's not only about $$, but the underlying principle.  Why should someone who was lazy and didnt' pre-register benefit from that laziness and get a broker co-op.  This is bad policy by TIC.  I will spread the word to everyone i know to NEVER pre-register with a TIC development in the future. 

 

[shadax]

The issue here is a buyer comes in and has an agent but the salespeople say they will not offer co-ops. So the buyer, not wanting to waste anyone's time, goes ahead and signs up to prequal because that's what they tell you to do (EVERY SINGLE TIME).

Then they offer the co-op and you bring in your agent... will they not allow it because you already signed up on their prequal list?

That is why I never want to fill out paperwork they ask you to, even those "we just want to track the people who come in" index cards.

I understand they are trying to prevent those "my brother's wife's hairdresser is a broker" situations where the buyer is just trying to capitalize on the credit, but there are legitimate buyers out there who have been working with agents for a long time and to shut them out because of some technicality isn't really kosher.

I see your point, but could the "my brother's wife's hairdresser is a broker" issues be expanded to include the "a broker is only accompanying me in order to split the co-op with me" bunch? 

Seems like the goal of the co-op should be to generate sales leads, which kind of goes out the window when someone is interested in visiting a property (or has already) but is advised not to notify TIC so they can later bring a broker so that broker can get credit for generating the sales lead when they clearly did not. 

I know most people are just fine with getting any purchase, housing or otherwise, for the least amount of money as they can.  I'm all for that as well, but I'm not sure I'd fault TIC for trying to make sure they're getting what they're paying for.

 

[ak]

Then TIC should make their policy clear upfront in BOLD CAPS by disclosing the fact that if you pre-register you cannot use a broker at a later date.  Don't punish someone for doing what they were suppose to do and reward the person who really didnt' show any interest in the begining by not pre-registering. 

 

[usctrojancpa]

The issue here is a buyer comes in and has an agent but the salespeople say they will not offer co-ops. So the buyer, not wanting to waste anyone's time, goes ahead and signs up to prequal because that's what they tell you to do (EVERY SINGLE TIME).

Then they offer the co-op and you bring in your agent... will they not allow it because you already signed up on their prequal list?

That is why I never want to fill out paperwork they ask you to, even those "we just want to track the people who come in" index cards.

I understand they are trying to prevent those "my brother's wife's hairdresser is a broker" situations where the buyer is just trying to capitalize on the credit, but there are legitimate buyers out there who have been working with agents for a long time and to shut them out because of some technicality isn't really kosher.

I see your point, but could the "my brother's wife's hairdresser is a broker" issues be expanded to include the "a broker is only accompanying me in order to split the co-op with me" bunch? 

Seems like the goal of the co-op should be to generate sales leads, which kind of goes out the window when someone is interested in visiting a property (or has already) but is advised not to notify TIC so they can later bring a broker so that broker can get credit for generating the sales lead when they clearly did not. 

I know most people are just fine with getting any purchase, housing or otherwise, for the least amount of money as they can.  I'm all for that as well, but I'm not sure I'd fault TIC for trying to make sure they're getting what they're paying for.

Then TIC should make their policy clear upfront in BOLD CAPS by disclosing the fact that if you pre-register you cannot use a broker at a later date.  Don't punish someone for doing what they were suppose to do and reward the person who really didnt' show any interest in the begining by not pre-registering. 

OR not tell the buyers who were accompanied by their agents ON THE FIRST VISIT to register and get pre-qualified if the agent won't be eligible to receive the broker co-op when it becomes available.  I'm very curious to see what happens when I head over this weekend and if I get some shady run around answers, I may elevate the matter to my local Realtor Association, California Association of Realtors, and/or the DRE.  TIC may be the 500lbs gorilla but the Realtor Association is not a lobbying group you want to mess with.

 

[usctrojancpa]

I see your point, but could the "my brother's wife's hairdresser is a broker" issues be expanded to include the "a broker is only accompanying me in order to split the co-op with me" bunch? 

Seems like the goal of the co-op should be to generate sales leads, which kind of goes out the window when someone is interested in visiting a property (or has already) but is advised not to notify TIC so they can later bring a broker so that broker can get credit for generating the sales lead when they clearly did not. 

Good point. And where to draw the line? I closed escrow about a year ago, any chance bringing in a broker now?

Honestly, they should allow agents to register their buyers whether they offer a broker co-op or not on the first visit.  That way, you take out all the ambiguity and this potential issue later on.

 

[irvinehomeowner]

I see your point, but could the "my brother's wife's hairdresser is a broker" issues be expanded to include the "a broker is only accompanying me in order to split the co-op with me" bunch? 

Yes... those are the same thing.

Seems like the goal of the co-op should be to generate sales leads, which kind of goes out the window when someone is interested in visiting a property (or has already) but is advised not to notify TIC so they can later bring a broker so that broker can get credit for generating the sales lead when they clearly did not. 

I know most people are just fine with getting any purchase, housing or otherwise, for the least amount of money as they can.  I'm all for that as well, but I'm not sure I'd fault TIC for trying to make sure they're getting what they're paying for.

That is the rub. Would the buyer have bought without the broker co-op? Is the broker co-op the extra umph to get the buyer off the fence much like the "The Great Gov Credits of 2010"?

There is also the benefits of getting on the list early as IR2 pointed out where that gets you the lot/location you are looking for. If the co-op is more important than the lot, I would tell iPac as much and maybe they will deal with you with other incentives.

I do agree with jsk that pre-registering shouldn't exclude you from broker co-ops... but I think iPac was so sure 2011 would be better than 2010, they didn't think about it.

 

[ucla bruin]

Then TIC should make their policy clear upfront in BOLD CAPS by disclosing the fact that if you pre-register you cannot use a broker at a later date.  Don't punish someone for doing what they were suppose to do and reward the person who really didnt' show any interest in the begining by not pre-registering. 

I agree because we're both from the buyer's perspective so this would definitely benefit us. But from TIC's perspective, I'd agree with shadax because they have to protect their interest as well and not let the co-op bonus lose its purpose. In a perfect world where everything is fair, I think the buyer would go in with the agent not solely with the intent of collecting possible co-op. It's all about perspective I guess but I think it's actually reasonable for TIC to not explicitly state "no co-op for you if you've already registered by yourself, sucka!"

 

[usctrojancpa]

I see your point, but could the "my brother's wife's hairdresser is a broker" issues be expanded to include the "a broker is only accompanying me in order to split the co-op with me" bunch? 

Yes... those are the same thing.

Seems like the goal of the co-op should be to generate sales leads, which kind of goes out the window when someone is interested in visiting a property (or has already) but is advised not to notify TIC so they can later bring a broker so that broker can get credit for generating the sales lead when they clearly did not. 

I know most people are just fine with getting any purchase, housing or otherwise, for the least amount of money as they can.  I'm all for that as well, but I'm not sure I'd fault TIC for trying to make sure they're getting what they're paying for.

That is the rub. Would the buyer have bought without the broker co-op? Is the broker co-op the extra umph to get the buyer off the fence much like the "The Great Gov Credits of 2010"?

There is also the benefits of getting on the list early as IR2 pointed out where that gets you the lot/location you are looking for. If the co-op is more important than the lot, I would tell iPac as much and maybe they will deal with you with other incentives.

I do agree with jsk that pre-registering shouldn't exclude you from broker co-ops... but I think iPac was so sure 2011 would be better than 2010, they didn't think about it.

And rosy assumptions like that are the mother of all f-ups.