New Home Builders Sucking Up to Phoenix Realtors!


Six months ago, many (most) new home builders were slicing commissions paid to Realtors representing buyers. Why? Simple. They didn’t need Realtors to bring them buyers. As reported in this blog and, the builders had ridiculous waiting lists—people were clamoring for lots to build homes on. Builders weren’t selling to “investors”, they weren’t paying real estate agents (many cut the commissions to ZERO). They had plenty—too many—buyers for new homes.
Fast forward to today. Most builders are not only back to offering buyers agents the “normal” (3%) commission (also called a co-broke) but many have raised the co-broke to record levels, particularly on spec homes. Here’s a sampling of mailings I’ve received in the last month:

Feb 7: An invitation to Realtors to view a new development where we can “Enjoy hors d’oeuvres & desserts, a wine & soda bar, autographs…”. Autographs???
Feb 8: “In the past two weeks, 50 more subdivisions have returned to the traditional co-broke!”
Feb 11: “Homes by Towne is Offering 4% Co-Broke on Specs and GREAT Buyer Incentives!”
Feb 13: “US Homes is offering 6% Co-Broke on Select Inventory Homes!”
Feb 23: “We stuck by Realtors all of 2005 with 3% Co-Brokes. Now offering 4% on 56 Specs in 22 Communities!”
Mar 1: “4% Co-Broke & Huge buyer Incentives By Courtland Homes”

And it goes on and on and on.  So these builders and developers greedily sliced real estate agent’s pay checks to nothing, and jacked up their prices to buyers. Just six months ago they offered NO buyer incentives and turned people away. Now these same builders are all scrambling like feral cats after a rat to attract buyers. Agent incentives, buyer incentives, you name it. Heck, they’re wining and dining us just to get us to come out and LOOK at their new model homes!

Can you say “overbuilt”? Can you hear the builders saying, “Holy crap, we built a jillion of these things! People we lining up around the block for them six months ago, offering tens of thousands more every week!  What are we gonna do now?!|?!” Can you say “panic”?  The builders and developer’s greed has lead to a glut of new homes on the market. These dolts skewed the market when it was in a frenzy and now their greed is helping shove the market the opposite direction.
Sometimes I just wish they’d all pack up their pretty model homes and just drive away to the next market they decide to whack.  Laugh at me when I bring you a buyer six months ago and now you’re going to kiss my ass to bring them to you? Gimme a break!


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About the Author
Jay Thompson

I'm a former real estate broker in Phoenix, Arizona, currently work for Zillow Group and am the founder of the Phoenix Real Estate Guy blog. I tend to drive too fast and scream at the University of Texas and Denver Broncos football teams. My two kids are smarter than most adults I know and my wife is simply amazing.

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  1. newhomebuilders says:

    This was a good post. I am new here but now I’ll visit often. Thank you for sharing this information.

  2. newhomebuilders says:

    This was a good post. I am new here but now I’ll visit often. Thank you for sharing this information.


  1. […] e, Arizona

    Builder’s incentives to agents. I’ve blogged about it here. And yes, it irritates the crap out of me that builders slammed agents a year ago and now bend over ba […]

  2. […] New Home Builders Suck Up to Phoenix Realtors!: Posted March 2006. I’ve never really been shy about expressing my opinions on the real estate industry. Heck, some have even comented here with things like “you insult all Realtors” and other such nonsense. This post was made back when I only posted a few times a month and had a readership of about 4 people, myself included. The builder incentives for agents really ticked me off, especially back in March when just a few months before that, builders cut agent commissions to ZERO and basically shunned us. Now they grovel at our feet. Well, go grovel somewhere else. […]

  3. […] Increasing the co-broke to attract buyer agents isn't anything new or innovative. It's been done since time immemorial. Phoenix area builders have been doing exactly this for quite some time as they struggle to bleed off excess spec home inventory. (Interestingly, many of these are the same builders who cut co-brokes to zero during the boom of two years ago. But that's another story.) […]

  4. […] Here is a post from March 2006. That was right when the builders turned from shunning agents to sucking up to them. […]

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