buying pre-construction, do i have to involve current agent?

[just1time]

am in need of some advice guys.
I am currently searching for a condo to live in and i am currently working with an agent. I actively search on my own also without the agents help.
I came across a pre-construction today on my own that i might indulge myself in and am confused whether or not am obligated to let my current agent know and get commission for nothing. I really would prefer to have the builder give me an incentive if i can avoid using an agent in buying the pre-construction if possible.
i am not trying to boycott her or anything especially since we are still actively searching for a condo for me to live in.
So, the question is: am i obligated to go through my current agent in purchasing this pre-construction condo which will be ready in 2011?
keep in mind i signed a contract with her to search for a current condo and she will still be making commission on the condo i will buy right now to live in.
if i boycott her in the purchase of the pre-construction, am i on the hook legally or what?
thanks
just1time

 

[cdr108]

if you signed a buyer's agreement contract, then you're legally bound if you buy within the time of your agreement.

also, the problem you may encounter is if you registered with a pre-construction under your name and go with the broker, the developer may/may not pay the broker since they (the dev.) has you already pre-registered so they don't consider it a broker referal.

in that case, you could also be stuck with paying your broker out of pocket, and not even get a discount with the developer as it seems they have reduced alot of the incentives that were there before ... less negotiating power for the buyer.

another poster noted that when he/she goes and looks at pre-construction, they register under an alias.

talk to your broker about some type of commission cash back from them with pre-construction since she won't be sharing it with a 'co-operating' broker. developers are giving agents 4% currently (someone please correct me if that info has changed).

maybe the agent can negotiate a free locker with your unit and other items too?

 

[Epi]

Just talk to your broker. I was in the exact same situation, and my broker was totally fine with me not involving him for my potential pre-construction purchase. Didn't even up doing it in the end though.

 

[The Condo Observer]

Some developer's will not pass along the incentives to "off the street" or unrepresented buyers.

I regard my broker as an important business ally and team member. Its a long term relationship, believe it or not, that will appear time and time again in your life.

So my point it, if you determine that no incentives are to be offered to you directly, and it costs you the same to use a broker or not, go ahead and do the transaction via the broker.

 

[zeeden]

Yes, believe it or not some brokers/agents actually look out for YOUR best interests.

 

[noodlesalad]

my broker allowed me to look on my own and pursue properties without involving him for anything NOT mls listed .. ie. private

 

[just1time]

hey

i decided i am going to inform my broker and involve her so she can get this free commission. I , however, will be asking her for 40% of the commision to cover my work and a locker.
does this sound alright? it is free money for her afterall. Plus we might be closing on another already built unit this week which she will get ful commission for.
i really want to keep a long time relationship with her cos i like her work style and ethics.
what say u guys about my idea?

 

[X2 Buyer]

i decided i am going to inform my broker and involve her so she can get this free commission. I , however, will be asking her for 40% of the commision to cover my work and a locker.
does this sound alright? it is free money for her afterall. Plus we might be closing on another already built unit this week which she will get ful commission for.
i really want to keep a long time relationship with her cos i like her work style and ethics.
what say u guys about my idea?

It is a reasonable request which a lot brokers do it anyway these days; though the % is just between you and her so negotiate an acceptable range for both her and you..

 

[zeeden]

Sounds reasonable and I'm sure she will be happy that you decided to involve her in this deal.

 

[The Condo Observer]

Agreed. Agents are open to negotiating.

 

[Devils Advocate]

Assuming that you might have signed a Buyer Representation Agreement, whereby you grant the brokerage firm your "Exclusive and Irrevocable Authority" and this entitles the brokerage firm to be compensated as agreed, in the event you purchase a property during the term of said agreement and any property purchased after the expiry of the agreement, but which you were introduced to during the aforementioned term.

It also requires the buyer to make up for any short-fall in compensation as may be received from a seller or the seller's listing broker. These contract are usually legally enforceable

This raises the question, of why if you have to pay the buyer's agent, would you not use them?

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information