Should I Use a Realtor if I’m Buying New Construction?

I’m Buying New Construction, Should I Use a Realtor?

I’m often asked, “Should I use a Realtor if I’m buying new construction from a builder”.  The short answer is yes, and here are the main reasons for this.

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 that the model isn’t the base price of $400,000 being advertised; it’s $500,000 because of all the upgrades. Top-tier granite countertops, crown molding, upgraded appliances, built-in bookshelves, and trey ceilings are usually upgrades, and they add up. A realtor representing your interests will help ensure 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 business costs.  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 builder’s doors, and ultimately, it would impact their future sales. Therefore, there is no downside or 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 dollar 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

You may want to consider a home inspection 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? Oftentimes, homeowners think a new home warranty will cover any issues that arise. In certain instances, it does not. A good real estate agent will have relationships with multiple independent inspectors looking out for your best interest. An excellent realtor will even help the homeowners set the appointment with the inspector and review the inspector’s report to identify potential areas of negotiation, corrections, repairs, or replacements with the builder.

Financing

When you are buying new construction, the builder usually offers financing.  But is it the best financing available? Even 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 ensure you receive all the benefits you’re 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 guide 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 vary in different parts of the state. An independent agent knows the nuances of these contracts locally and will help review them and answer questions about them. I strongly recommend that you do not sign any paperwork or contract without your agent 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.

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. If you do not communicate this information upfront when buying new construction, your agent won’t be able to represent you and watch out for your best interest.  An experienced age will already have a working relationship with the builder and community in which you are interested.

Are you thinking of buying new construction? Don’t go it alone, let us be your guide!

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