Is It Good to Have a Realtor for New Construction?

When considering a new construction home, many prospective buyers wonder if engaging a real estate agent is a worthwhile step. The presence of builder sales representatives at new communities often leads to the perception that direct interaction with the builder is sufficient. However, these builder representatives operate with the builder’s interests as their primary focus. Understanding the distinct roles and benefits of having independent representation can clarify this common question for homebuyers.

Understanding the New Construction Buying Process

Purchasing a new construction home differs from acquiring a resale property. Builders employ sales teams whose objective is to represent the builder’s interests and facilitate sales. These representatives provide information about the community, available models, and customization options.

The contracts used for new construction are often standardized and drafted by the builder. These agreements may contain clauses favorable to the builder, such as provisions for construction delays or specific terms for material changes. Buyers engage in a design selection process, choosing finishes and upgrades at a design center. These upgrades can significantly increase the total cost, often adding 10% to 25% of the home’s purchase price.

The new construction process also involves hidden costs. These can include expenses for permits, site preparation, utility connections, and post-move-in items like landscaping, window treatments, and appliances not included in the base price. New construction homes in developing neighborhoods might incur higher property taxes and homeowner association (HOA) fees over time. Potential delays due to supply chain issues or weather can extend construction timelines.

How a Buyer’s Agent Provides Value

A buyer’s agent serves as an independent advocate, providing assistance throughout the new construction purchase. Unlike the builder’s sales team, a buyer’s agent has a fiduciary duty to represent the buyer’s best interests. This representation can be particularly beneficial when navigating complex builder contracts.

An agent can help analyze contract terms, identifying key clauses like completion dates, financing contingencies, and warranty details. They may negotiate on the buyer’s behalf for price adjustments, incentives such as closing cost contributions, or mortgage rate buydowns to reduce financial burdens. These incentives, which can include credits for design center upgrades, can amount to thousands of dollars in savings.

A buyer’s agent provides unbiased market insight. They can offer comparable sales data for both new and resale homes, helping buyers assess the property’s potential value and avoid overpaying for upgrades that may not yield a strong return on investment. An agent can also guide buyers on which upgrades offer the most value for long-term enjoyment versus those that primarily add cosmetic appeal.

Independent home inspections are important for new construction, even though new homes are often perceived as defect-free. A buyer’s agent can facilitate independent inspections at various stages, such as pre-drywall, final walkthrough, and before the builder’s warranty expires. These inspections can uncover issues not visible to an untrained eye, ensuring the home meets quality standards and building codes. Builder warranties offer tiered coverage, often including one year for workmanship and materials, two years for mechanical systems, and ten years for major structural defects. An agent ensures these inspections occur and that identified issues are addressed, protecting the buyer’s investment and avoiding future repair costs.

Working with a Realtor for New Construction

Engaging a real estate agent for a new construction purchase involves practical considerations. It is advisable to involve a realtor early in the process, ideally before the initial visit to a new construction site or model home. Some builders require the agent to be present at the first visit or registered beforehand for the buyer to receive representation and for the agent to qualify for commission.

The compensation model for buyer’s agents in new construction is structured so that the builder pays the commission. This means there is no direct cost to the buyer for their agent’s services. Commissions paid by builders range from 2.5% to 5% of the home’s sale price, which is split between the buyer’s agent and the builder’s representative. This commission is included in the overall sales price of the home.

Buyers should be prepared to share their needs, budget, and desired features with their agent. This allows the agent to research suitable communities and builders, negotiate favorable terms, and act as a central point of communication throughout the construction process. Collaborating closely with a knowledgeable agent ensures the buyer’s interests are prioritized during a significant financial transaction.