One of the most common questions that we get is “Why do we need a real estate agent when buying a new construction home?” As with any home purchase, there are too many potential pitfalls, hidden risks, and complications involved in the process to guarantee a good result unless you have experienced help. It is highly recommended to use an agent for many reasons and here are some of those:
Hiring the Right Builder
Without a doubt, one of the top reasons why you should have a buyer’s agent when purchasing a new home is to be able to get a professional’s advice on the reputation of the builder. One of the best things about working with a good agent is that you benefit from their network of agents, vendors, lenders and other industry professionals. Word definitely gets around when businesses or service providers don’t take care of their customers in the real estate industry. If there is a builder in your area that isn’t reputable, chances are your agent will know about it. On the flip side, your agent is likely to have heard about the builders that go above and beyond for their customers as well.
Even with a builder with a great reputation, there are many people that are involved in building your home and there are going to be issues throughout the whole process. When these issues arise, a reputable builder will work to make the customer happy. Other things that can also affect the build process include weather, labor shortages, as well as issues with materials. Your agent can help stay on top of the process to look ahead if any problems are foreseen. They can help be your eyes and ears taking on the stress so you don’t have to!
An agent can help you also compare builder offerings based not only on price or price per square foot, but also on standard features, construction options, lot offerings, structural upgrades, as well as understanding what items you see in the model may not be included. Builders love to upgrade the model and sometimes it can be frustrating throughout the process when a buyer doesn’t understand the various features that are not included and has other expectations.
Remember, to the builder you are one customer, one house; but when you bring an agent along with ties to other customers and industry colleagues, they may have more leverage with the builder over the entire experience since the agent could mean repeat business.
Your Agent Can Help Guide You
When it comes to lot, neighborhood, upgrades, and plan modifications- the best value in real estate is not always clear without extensive experience to help guide you. Picking out the best lot, the right community for your lifestyle, the neighborhood features you want and the upgrades that are worthwhile – your agent can help out with all of these things. During this exciting time you could just go with your gut, but working with your agent can help ensure you make choices about your purchase that will best serve your interests. You are the final decision maker, but the best leaders in life have capable advisers to help guide their choices, so why not get an agent with multiple experiences in new construction and is familiar with the process.
It starts from choosing the neighborhood and the lot. The lot you choose can make a big impact on your value now and in the future. Having an agent that understands what lots and features are best for value and resale is crucial. What is the school district, what is the location in the neighborhood, are there future phases, what is around the lot, what is the size of the lot, how much is the lot premium? All of these questions can make an impact on the long-term value of your property.
Choosing upgrades is also a fun process, but also one to be entered into carefully. Most likely you will not be able to get everything you want without blowing your budget. An agent can help you determine which are the best options to include now to make the best use of your budget and get the best value and which options you should save for later. It’s also always beneficial when making these decisions to have someone experienced to “bounce” ideas off of as well as when you aren’t sure what direction to go. An agent may have other things to consider you haven’t thought of. There are also so many upgrades offered, some not even on any builder list, which not everyone remembers to ask about. Your agent may know of some you haven’t even considered, but would love to have in your new home.
Negotiations and Paperwork
Real estate purchases involve a lot of paperwork, documents that can be confusing and overwhelming…this is where your agent will make sure you understand the paperwork and know what to do if there is an issue. Your agent will verify that all aspects of the contract are understood by you and are comfortable with them. If there are any issues, the agent will notice them and be capable of explaining them clearly to you and how they impact you. Typically, a builder’s contract is written in a highly protective manner that favors the builder so you need to understand it fully before signing. This is one of the many reasons it is imperative to use a buyer’s agent when building a home.
A strong negotiator understands the true value of all aspects of the deal. Your agent understands what you want and need. Your agent also understands what the builder values most. Because your agent sees both sides clearly, they are the one most capable of negotiating a deal that will be to your benefit, getting you what you want for the best deal. Many times a builder sales rep will shoot straight with a real estate agent who knows what questions to ask and provide them the information to best structure a deal to make things work. That same sales rep is not the one to make the final decision and may steer an unrepresented buyer to not push as much on negotiations that an experienced agent knows can be made. Remember as nice as the builder’s sales rep is, they work for the builder and are not there to represent your interests.
Keep in mind, however, that every market is different. If the builder is selling all their homes at full price and not having to give upgrades, don’t expect your agent to perform miracles. In some areas, builders can’t build the homes fast enough to keep up with buyer demand. Don’t expect a builder to discount when they don’t need to in order to make the sale.
The Entire Process
Anyone with the financial means to buy a new home can go find a builder and purchase new construction. Unfortunately, doing things this way puts the buyer at a considerable disadvantage. The builder and the employees of the builder are there to make as much money as possible and focused on the best interest and bottom line of the builder.
Having someone by your side the entire process that knows what is “typical”, what’s to be expected, when you should push back on an answer or how things should go is important when you run into any issues. Having another person in your corner makes a difference so you aren’t going it alone.
Also make sure you have an agent that actually will be with you throughout the process from contract signing, to drywall walk-through, final walk-through with the builder and closing to make sure you aren’t missing anything and remembering to ask the right questions. There are agents that come with you to sign the contract and get their name on the paper and only expect to come in at the closing table again – ask your real estate agent when to expect to see them in the process.
With a reputable buyer’s agent, you get to step back and make the key decisions that will get you what you want – while the agent filters all the marketing, salesmanship and other noise into the facts that will help you make the best choice.
Last but not least….all of this is FREE to you!
Many people do not know that when using a real estate agent with your new home construction you get all of the benefits above for FREE! Definitely a win-win!
The cost of your new construction home is not any more if you choose to use a real estate agent. If anything, having an agent many times actually lessens your overall cost and certainly the stress! The builder will pay your agent their commission at no added cost to you.
Real estate agents are paid out of builder marketing funds, not construction so you do not get any better deal by not bringing an agent along. If you ever have a builder’s sales agent tell you they can give you a better deal without an agent, you should consider why they are saying that and immediately get your own representation. A reputable builder’s rep will encourage representation as they understand it makes the process smoother many times to have an experienced agent to help guide the buyer through the process.
We hope this list shows you what you can gain by having a buyer’s agent when purchasing new construction and someone representing you is paramount to your success. Give the Marr Team a call today; we would love to help you find your dream home because experience and knowledge is not expensive, it’s priceless!