Saving San Francisco Bay Area Buyers Thousands or ???

The real estate world is teaming with hundreds of independent and national chain discount brokerages and business models. The newest, in my experience, to flash on the scene is I found this company on google in a sponsored (paid) link which raised my level of skepticism. Here is what makes snapAcommission new and possibly a viable option for buyers.

The Model:SnapAcommission’s business model is based on representing buyers who are set on purchasing property from a home builder. Home builders are an attractive solution to many buyers for their willingness to negotiate upgrades, floor plans, add-ons, and in some cases provide the buyer with options in financing. Consequently snapAcommission only works with customers who are going to purchase from a home builder. According to “Many people are not aware that builders allow you to be represented by a Real Estate Agent for the purchase of a newly constructed home.”

In my opinion, snapacommission does have a viable point. The majority of new home buyers really do not understand some of the advantages and disadvantages to buying from a home builder. The savy home buyer may be best served by investigating snapacommission first for their value proposition-to be outlined below. The idea would be to use snapacommission as a “bargaining” tool when interviewing an “open” Realtor. The Realtor may be worth the extra commission monies if he/she can demonstrate and justify their capabilities.

The Pitch: SnapAcommission says that (in general) most home builders factor in between 2 and 3% sales commissions into the sales price of a new home. They then offer this commission to the selling broker/agent for bringing them (builder) a buyer. Here is where things get interesting according to snapacommission “We enjoy sharing 40% of this commission with our clients as they inevitably are and active part in the search for new homes. . . and we reward them for this.”

The following is the example savings provided by snapacommission:

I. Purchase price: $1,500,000
Commissions offered by builder: 3%

You get $18,000! ($1,500,000*.03*.4 = $18,000)

II. Purchase price: $1,500,000
Commissions offered by builder: 2.5%

You get $15,000! ($1,500,000*.025*.4 = $15,000)

The example is interesting and confusing to me because of one statement made earlier on snapacommission’s home page of their site: “ will refund you up to 40% of this commission if you use one of our experienced agents to represent your transaction. ”

Where did those two ugly little words, up to, come from in this pitch? The entire site gives examples of a 40% savings on a 2-3% agents fee. That means that savings are on a sliding scale with the best that the home buyer can do is 40%. What are the rules constituting a savings less than 40%? That would require the buyer to make a through investigation.

The Rest of the Story: Snapacommission has page of conditions that I will abbreviate here. If you are thinking of using this service remember to review the conditions page in it’s entirety-please do not rely upon this summary to suffice your legal requirements. With that moment of “cya” let’s get to it.

1. Condition #1 is that a snapacommission Real Estate agents must, first, meet you and register with you at the sales office for the property the buyer is interested in purchasing. This notifies the builder that the buyer is being represented by an outside Real Estate agent.

2. The home builder has to offer at least a 2% commission to the selling broker/agent who is representing the buyer.

3. The snapacommission “rebate” must be approved by the buyer’s lending institution.

4. Buyer Agency Agreements with snapacommission must be in writing in accordance with California laws.

In my opinion, snapacommission is worth investigating. Always remember that a full service Realtor or Real Estate agent with experience in a specific market will be able to show you a much broader array of properties than a home builder with one site in one area. Also remember that the really solid professional Realtors, The Harper Team, earn their commissions through their expertise and knowledge of the “deal”, the area of interest, school systems, climate, building plans for an area, and many of the nuances that are valuable intangibles in purchasing a home.

If you have further questions please contact Dean Guadagni


4 thoughts on “ Saving San Francisco Bay Area Buyers Thousands or ???

  1. Dean – I don’t know if you are aware of the fact that Tracey worked for Standard Pacific Homes for 7 years. She closed about 300 escrows for them and is more than intimate with the behind the scenes aspects of new home sales. Consequently, Tracey brings a great skill and strength to the Harper Team with her ability to negotiate for those interested in buying a new home.

    Many new home buyers feel like they are getting a better deal by dealing directly with the builder’s staff. Unfortunately it is often the case that many possible upgrades are missed out on.

    Agent commissions are always negotiable. What we do in these situations is use or expertise and commission to negotiate with the builder to get the best deal for the client. Rebating 40% of the agent commission back to the buyer is not always the better deal if you miss out on $15K worth of upgrades.

  2. John,

    I had no idea Tracey was a home builder expert. That is great news for anyone searching for a deal from a builder. I have always been weary of the builder’s deals because of the way the consumer was made unawares in regards to the “registration” process when a consumer goes on site. It smacks of deception and always made me a bit nervous.

    I would be interested to hear more about Tracey’s experiences in that field. Thanks for the great consumer information.


  3. I used Snapacommission to purchase my new home in San Francisco. We are going to close escrow on it this week!

    I was very surprised at the level of service that was provided to me. Not only did the Snapa agent negotiate $24,000 off the list price, he also was able to get the builder to give me a credit for 1 year worth of HOA dues (about $4300) and negotiated that the builder pays the transfer tax ( a savings of an additional $5000). He negotiated hard for me and this is on top of rebating 40% of the commission which equaled about $7400. I saved a total of over $40,000 with snapacommission.

    I have bought a few other homes in the past, however I have never received the level of attention, responsiveness and care from any other agent or agency. Snapacommission is more of a service created to inform buyers that they can use a real estate agent to purchase a new home and do not have to go directly to the builder. The 40% rebate is just the icing on the cake.

  4. Dear Happy Snapacommission Client,

    Although I love the story you have described and I want to believe you, I am afraid I am not 100% sure if you are truly a satisfied Snapacommission client or if you are a Snapacommission sales manager. I have never heard a buyer say anything like “The 40% rebate is just the icing on the cake.”

    Would you please make me look like I have egg on my face, all washed up, and too old for my own good by providing us a name, name of your “snapa agent, and the complex where you are about to close? Thank you!


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s