Uncategorized January 20, 2023

Thinking of building a new home? Should I have a REALTOR®?

Do Buyers Get a Better Deal by Showing Up Without Representation

Many new home buyers incorrectly assume if they show up at a model home sales office without their own representation, or even represent themselves, a builder will pass along an agent’s compensation in the form of a lower price or incentive directly to the buyer.

Your agent’s compensation is built into the price of all the homes as well as all the other expenses associated with the home-building process.  So if it’s not paid to your agent, the fee just stays in the builder’s pocket. Important!

The Sales Representative Represents the Builder, Not You

When you walk into a model home, the builder’s representative who warmly greets you is there to sell you their product, a new home. They’re very knowledgeable about their homes and the plans available for the community and know a lot about the construction process.

They negotiate prices, incentives, and upgrades every day.  How many homes have you negotiated this year?  As an example, would you walk into a court of law unrepresented?  You wouldn’t take on major surgery without consulting with several doctors.

Because they represent the builder, these sales rep’s aren’t going to point out the negatives that will make your future resale difficult.

Protect Your Right to Representation

Buyers should always have their agent with them when first registering with a builder. You’ll typically be asked to register when you walk into a new home sales office. They’ll ask for your contact information, how you found them, and your agent’s name. You need to put your agent’s name down during this registration process if they’re not with you.  Better yet, if you go without your agent present, make sure you get a stack of business cards from him/her in advance and give them to the sales reps.  Also, have the agent call the sales office ahead of your visit to have them register you also.

Sometimes builders don’t have a problem with you registering an agent later on. Others require it on your first visit or they’ll refuse to compensate any representative you decide to bring later. That leaves you to pay your Realtor yourself or go without representation.

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Agents’ Fiduciary Responsibility to Clients

When you bring us on as “buyer’s agents” we have a specific fiduciary responsibility to protect your interests. Some of the things we do during your new home purchase include:

  1. Advising you on neighborhoods and builders that fit your location and price needs.
  2. Letting you know where to find the current incentives
  3. 30+ Years of building relationships with builders’ representatives mean we’re on their call list when they have unadvertised incentives and homes come available
  4. Giving you suggestions about picking the right lot and location within a new subdivision
  5. Providing information about plan modifications and upgrades that can add enjoyment now and value at resale without adding expense.
  6. Helping you review and understand builder contracts and the seemingly never-ending change orders.
  7. Advising you on the importance of independent home inspections, connecting you with a proven inspector, and helping you decide which inspections to consider.
  8. Showing you the benefits and drawbacks of working with the builder’s preferred lender and title company. We can help you do the math.
  9. Sharing the experience gained over 30 years and hundreds of previous buyers lets us ask questions you may not have thought of allowing a smoother process and the best outcome.

Your REALTOR is Also Your Contract and Paperwork Expert

Be honest, how familiar are you with real estate contracts? When was the last time you read a real estate contract?  Unfortunately, every real estate purchase involves some level of exhaustive paperwork that can not only be confusing but also very intimidating. When buying new construction, you will have to sign a builder’s standard contract, which covers all the pertinent details of a new-home purchase.

Your agent, being an expert in the industry, will review any contracts you sign to ensure everything is in order, and most importantly, that you are protected. They will guarantee your comfort and understanding pertaining to every aspect of the agreement. Whatever has been agreed upon by you and the builder (fees, timelines, upgrades) a realtor is going to ensure it is incorporated into the contract. Moreover, they will make sure that all other paperwork is reviewed and filed correctly for a smooth transaction.

Why Do I Need a Home Inspection If It’s a New Home?

You may be thinking about a new home and skipping the inspection because it’s NEW.  Well, even with the best construction, using only the best materials, contractors, etc., new homes can still have their fair share of defects just the same as resale homes. The builder’s agent is unlikely to push for or offer up an inspection, likely because the builder doesn’t necessarily want to inspect it themselves. You may be thinking you can depend on a new home warranty to cover unaccounted-for issues despite this, but let’s just say we wouldn’t hold our breath on that.

It’s up to you and your real estate agent to set up a home inspection. An excellent realtor has connections to multiple independent inspectors who will work in your best interest. Your agent will help you set up an appointment and then review the inspection report to identify potential areas of negotiation with the builder. Also, it’s best to attend the walkthrough with your agent so they can help spot errors on the new home.

Let’s Start the Conversation

I want to make sure you’re completely prepared for the new home-building process and all that is involved.  Navigating these items can be like jumping into shark-infested waters.  When you’re thinking about a home, whether a resale or newly built, please reward yourself with a conversation with your favorite real estate agent.  I want to ensure you’re represented, just as you would be when buying a 50-year-old home.

I do this full-time and know the market, know the process of new home building, have built relationships with builders across the area, and can help advise you in this process.  If you know anyone who is talking about building a new home, please have them call me.

If you know of someone thinking of buying or [selling/refinancing] a home, who would appreciate the kind of service I offer, I would love to help them. Call me with their name and cell number and I will be happy to follow up and take excellent care of them.