Should I use a REALTOR® if I’m buying new construction from a builder?

Dated: 04/08/2019

Views: 246

Should I use a Realtor if I’m buying new construction from a builder?  

The short answer is YES! and here are some main reasons why.

new Construction home

·       PROTECT YOURSELF!   PROTECT YOUR INVESTMENT!   PROTECT YOUR TIME AND HARD EARNED MONEY! 

·        The Average New Home Buyer will spend months, if not years, researching different communities and new construction developments. Unfortunately, the information available online is not always correct and “pricing” is not always transparent, and no two builders are the same.

·        Pricing, Availability and Options (upgrades) are constantly changing.

·        Simply “walking into” a Sales Office or (Believe it or not) going to that builders/Developments Web Site can create a situation where the Builder would not have to agree to your Right to Buyer Representation. (not all Builders operate this way – but due to each being different you wouldn’t know until it was too late)

·        “Too Late” is when you realize you do need Representation (and this will happen) but the Builder is no longer obligated to cooperate, then the Buyer is stuck having to Hire/Pay an experienced Agent for representation that they were previously allowed to have at no cost to the Buyer.

·        The Sales Office works for the Builder not the Buyer. Although this sounds okay and can often be communicated as a benefit to the Buyer, It is Not.

·        Sometimes a prospective Buyer may be told they will “receive a better deal” or “extra incentives” if they waive their right to their own Buyer Representation. But will have no real way of ever knowing if that promise was delivered.

·        When embarking on any important or life altering decisions, whether Legal or Financial, every person should always make sure they have the proper Representation on their side to protect their interests.

·        Don’t go in alone – When visiting a sales office, you will be asked to “register” however registering (even if you state you have Buyer Representation already) will not always guarantee the builder will need to honor or acknowledge it.

·        Do you need to Sell your current Home in order to buy this new Home? If so, you will need an Experienced Agent to Make Sure that Can Happen by using the most effective strategies for marketing and selling your home for the most money possible, while also timing everything so that you don’t have to “move twice” find temporary housing or get stuck being fined daily (for every day you are late to close) or completely losing the new home, your deposits, upgrades costs and more by not being able to close (buy/perform) on the builders schedule.

·        Register – If you want to be sure you have someone looking out for your best interest, tell the builder on your very first visit that you are already working with an agent. This will work most of the time – but, if you are told that your Agent needs to be with you, then its time to leave or get your agent down there before giving out any of your info or discussing or viewing anything. If you do not communicate this information upfront when you are buying new construction, your agent won’t be able to represent you and watch out for your best interest.  If your agent is experienced with new construction there’s a good chance they already have a working relationship with the builder and community for which you are interested.

·        Representation – The real estate representative in the builder’s sales office represents the builder’s best interest not yours.  An independent real estate agent represents your interests and advocates on your behalf.  Additionally, a real estate agent will help you get the most value for the least amount of money and make the real estate transaction easy and frustration free.

·        What you See is not What you Get – You tour the model and it looks great.  The problem is the model isn’t always the base price of $400,000 being advertised, it’s likely $500,000 or more because of all the upgrades.  Top tier granite counter tops, crown molding, upgraded appliances, built in bookshelves and trey ceilings are usually upgrades and they add up.  A realtor representing your interests will help make sure you’re aware of what’s included in the base price and what’s extra.

·        Agent Fees – Buyers do not pay the real estate agent fees, the seller or builder does.  Builders view commissions to real estate agents as part of their cost of doing business.  In fact, they rely on outside agents to bring clients to them.  Builders will not credit buyers the commission they would otherwise pay to a Realtor.  If they were to do so, realtors would no longer bring clients through the builders doors and ultimately it would impact their future sales. Therefore, there is no downside and no cost on your end to have an outside agent represent you.

·        Negotiations – You may be a great negotiator.  Even good negotiators have told me they are more effective when they negotiate for other people than they are when they negotiate for themselves because they don’t have an emotional connection to what they’re buying.  An agent will look at the transaction from a dollars and sense perspective without being swayed by emotions.  A good Realtor will also know what is and what is not negotiable and as you can imagine it varies by builder.  For example, did you know many builders will cover some closing costs? Include a warranty? Include free upgrades? Builders are far more likely to negotiate on fees or upgrades than they are on price. An experienced agent will help guide you through negotiations and ensure you are getting the most for your money.

·        Get Everything in Writing – Any concessions or guarantees provided by the builder should be confirmed in writing. Do not sign any paperwork or contracts without ensuring everything you’ve agreed upon including upgrades, fees, timelines etc. are incorporated into the contract.  If you skip this step, the builder does not have to deliver what they agreed upon and you will have no recourse.  An agent will ensure all the terms agreed upon are included in the contract.

·        Inspections – A home inspection is a must when buying new construction.  A builder doesn’t necessarily want to inspect itself and if they did would you trust they have your best interest in mind? Often times, homeowners think a new home warranty will cover any issues and more often than not, it doesn’t.  A good real estate agent will have relationships with multiple independent inspectors who will look out for your best interest.  An excellent realtor will even help the homeowner set the appointment with the inspector and review the inspectors report to identify potential areas of negotiation with the builder to make corrections or modify fees.

·        Financing – When you are buying new construction, the builder usually offers financing.  But is it the best financing available? Evan a small increase in the interest rate could have a significant impact on your monthly payment or the total amount you pay for the home.  An experienced real estate agent will be able to connect you with reputable lenders so you can compare rates.

·        Contract – How familiar are you with a real estate contract?  Do you know what to look for to make sure you are receiving all the benefits your supposed to receive? Are you aware of any hidden fees or community fees?  A real estate agent is an expert in the industry who is there to provide guidance throughout a real estate transaction. They review real estate contracts regularly and know what to look for to ensure everything is correct.  Additionally, real estate contracts in Collier County are different than Lee County or wherever you are currently living.  An independent agent knows the nuances of the different contracts locally and will help review and answer questions pertaining to the contract.  I strongly recommend you do not do not sign any paperwork or contract without your agent being present to review and advise.

·        Quality of Construction – How familiar are you with the builder? What’s their reputation? What is the quality of their construction? There are hundreds of builders in Collier and Lee County. An experienced agent will be familiar with all the major builders and their quality of work.  They’ll also be able to provide recommendations and references for custom home builders to ensure you are connecting with a reputable builder.

Are you thinking of buying new construction? It can be a very fun process, it can be long, it can be stressful and there will always be challenges.

Don’t go into it alone, let us be your Guide and Advocate through the whole process!

Call or Text anytime for more info or to talk about your new home plans.

775-223-6211 Sean Fuller

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Sean Fuller

Sean is a very attentive and educated REALTOR. With a background in finance and experience as a senior loan officer. His clients would describe him as extremely committed to serving their best i....

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