Why Use a Realtor for New Construction?
Buying new construction? Learn why having your own realtor provides essential advocacy and expertise throughout the home buying process.
When considering a new construction home, prospective buyers often wonder if involving a real estate agent is necessary. While builders employ their own sales teams, independent representation offers added benefits. Understanding the distinct roles clarifies the advantages of having a dedicated advocate, especially given the unique aspects of purchasing a newly built property.
Understanding the Builder’s Sales Team
A builder’s sales representative is an employee focused on advancing the builder’s interests. They present inventory, highlight incentives, and navigate sales terms. Their compensation is tied to selling homes in their development.
The builder’s sales team is knowledgeable about their community, floor plans, and construction process. While they provide property information, their loyalty and fiduciary duty lie solely with the builder. Their role is to secure the best terms and price for their employer, not the prospective buyer.
Advantages of Buyer Representation in New Construction
Engaging a realtor for new construction offers specific benefits that protect a buyer’s interests. A buyer’s agent brings market knowledge beyond a single development, including various builders and community plans. They provide unbiased advice about the builder’s track record and how their offerings compare to other properties, aiding informed decision-making.
New construction contracts differ significantly from standard resale agreements, often more extensive and drafted by the builder’s attorneys to favor the builder. A realtor helps buyers understand these intricate contracts, identifying unusual terms or potential concerns. They can also negotiate on the buyer’s behalf for upgrades, incentives, or closing cost assistance, which might not be readily offered to unrepresented buyers.
Throughout the construction phase, a realtor provides guidance, helping buyers navigate selections and understand construction timelines. They facilitate pre-drywall and final walkthroughs, and encourage independent inspections, important even for new homes. These inspections, conducted by an impartial expert, identify potential issues like structural concerns, plumbing problems, or electrical defects. Addressing these deficiencies before closing can prevent costly repairs later.
A realtor also assists with financial guidance, connecting buyers with independent lenders to compare against any preferred lenders the builder might suggest. This comparison helps buyers secure more favorable loan terms. They act as an advocate from the initial search through closing, ensuring the buyer’s concerns are addressed and their investment is protected.
Financial Considerations for Buyers
A common misunderstanding is that using a realtor for new construction adds costs. However, in most instances, the builder pays the buyer’s agent’s commission. This commission, typically ranging from 2% to 3% of the home’s sale price, is generally factored into the builder’s marketing budget and the overall price of the home.
This payment structure means there is usually no direct out-of-pocket expense for the buyer to have independent representation. Conversely, choosing not to use a realtor typically does not lead to a reduction in the home’s purchase price. The commission that would have been paid to a buyer’s agent is often retained by the builder or their sales team, rather than being passed as a saving to the unrepresented buyer.
Navigating the Process with a Realtor
To ensure seamless representation, buyers should involve their realtor from the beginning of their new construction home search. Many builders require a buyer’s agent to be present or registered during the initial visit to a sales office or model home. Failing to do so could jeopardize the buyer’s ability to have their chosen realtor represent them and for the builder to pay the commission.
Once engaged, a realtor guides the buyer through each stage of the new construction journey. This includes assisting with lot and floor plan selection, understanding design center choices, and monitoring construction progress. They also coordinate important milestones such as independent inspections and final walkthroughs. This dedicated support helps ensure a smoother process compared to navigating new home construction alone.