When you’re house hunting, the allure of new construction is undeniable. You get to be the first to live in the pristine home full of brand-new appliances with your chosen finishes.
If you are interested in buying new construction, the builder’s agent will be ready to help you with the process… BUT make no mistake: You need your OWN real estate agent from the get-go. Even if it seems like plug and play to sign up with the builder’s on-site agent, you’re going to want someone representing your side of the deal.
Even though a friendly sales representative will greet you with a smile the moment you walk through the door of the sales center, don’t forget that they work for the builder. Bring your own agent with you starting with your very first visit — in fact, many builders require your agent to register with them from the very beginning in order for your agent to be allowed to be involved in the process, look out for your best interest, and receive their hard-earned commission.
In any real estate transaction, it’s important to have a professional on your side, even if the process seems straightforward.
The home’s builder is considered the seller, and the agent representing the builder is called the builder’s agent. “Similar to how a listing agent looks out for a homeowner/seller, the builder’s agent (or sales representative) will always have the builder’s best interest in mind,” explains real estate agent Judy Jernigan.
Working with real estate agents: Agency relationships
A builder model home might not be a good representation of what comes standard with the home. Often the model home is a high-end version of the standard home. It is the builder’s showcase home and a way for the builder to show off many of the stellar upgrades they can offer. The builder hopes a buyer will like these upgrades and ultimately add them. In general, these upgrades have good profit margins for the builder.
When touring the model home, your buyer’s agent will help you find out exactly what options are standard, and what are updates.
And further, what makes sense for you, your family, the neighborhood, and future resale value.
Builders are not like regular sellers. They are not emotionally attached to the property. They make decisions based on what is best for their bottom line. There is something known as the time value of money, which means that money available right now is worth more than the same amount of money later.
Builders do not like to reduce their prices. If they do, it sets a precedence for future home sales. Builders are more likely to pay for closing costs or offer design center incentives than to drop their prices.
When buying new construction, here are more examples of how your buyer’s agent will help you:
- Negotiating extras: Want upgraded counters or appliances in that new home? Your agent can help you with all those extra perks, amenities, and upgrades. “We can often negotiate with the builder on things like paint color or even the style of garage door, especially if development is just starting.”
- Recommending financing: A builder typically will have a “preferred” lender that it will try to steer you to, but your real estate agent can help make sure that you’re getting the mortgage that works best for your situation. Shopping around is always wise.
- Overseeing a home inspection: Tempted to forgo a home inspection in new construction? Don’t do it. You always want an outside inspector working especially for you to check things out. Your dedicated buyer’s agent will help make that happen.
- Get everything in writing: Getting everything in writing seems obvious, but what the builder or their agent says during a showing of a new-construction home is not always recorded or remembered. If something said is important to the buyer, your buyer’s agent will help get it in writing.
DON’T Call Number On Yard Sign: Why You Want A Buyer Agent
Side note: Some new-home buyers think that if they do not use an agent for their purchase, the builder will reduce the price of the home by the amount of the commission. For the most part, this cannot be further from the reality. Builders do not want to reduce their prices because it sets the comparison price for future home sales in that neighborhood. If a buyer goes to a new-home builder without a real estate agent, either the builder’s agent or the builder will pocket that money – not the buyer.
With a professional REALTOR you trust by your side, you’ll rest easy knowing someone is there to protect your money, your time, and your new home.
Judy is SNS: a Strategic Negotiating Specialist – fighting for you read more >>