Buying a house without a Realtor — even a new construction home — isn't a good idea. It's easy to see the appeal of purchasing a newly built home, or the land on which to build a new home appealing to many. In one key area, however, it leaves homebuyers confused and looking to the builder's agent for answers. If you’re wondering whether you need a real estate agent when buying a new construction home, the answer is always yes. Forgoing an agent means you won't have anyone looking out for your interests as a buyer.
Keep reading to have a better understanding of why you should have your own representation, and why you shouldn't rely on the home builder's agent.
Your Realtor's role in new construction homes
When shopping for a new build, it’s essential to hire your own real estate agent. New construction homes seem straightforward: The house is being built, and you can buy it. You may wonder what the purpose of an agent is in this scenario, or even think about relying on the real estate agent who works for the home builder when you need help — but you shouldn't. Remember, that agent is representing the builder and is not looking out for your best interests.
1) They'll advocate for you (the buyer)
Your real estate agent is there to advocate in your best interest. While a builder's agent would be more than happy to help you do the paperwork on a home purchase, they ultimately work for the builder. Their fiduciary responsibilities are to the builder only. With that in mind, they're going to have the builder's best interest in mind.
You will most often be required to sign the builders contract which is always written to protect the builder-- not the buyer. The contract language contains industry terminology and legalese that your agent will help you understand.
When you hire a real estate agent to help you through the transaction, you know that you will also have someone advocating for you during the transaction. You'll have someone there to make sure that you get what you need out of the deal.
2) They can assist with negotiations
A buyer's agent — the real estate agent representing your interests as the buyer — can also help you with contract negotiations. When you use the builder's standard contract, the vast majority of the clauses included are going to be worded to the builder's benefit.
When you buy a new construction home, a great real estate agent can negotiate with the builder on your behalf and make sure that your money is also protected by the contract. Plus, if there are any issues during the transaction, they can help you should any problems crop up.
3) They help you find the right builder
Not all builders are the same. Every builder has their style, both in terms of construction aesthetics and communication during the new construction process. To make sure you’re satisfied, you’ll need to find a builder whose style and work preferences match your own.
It can be hard to know where to start when trying to find a builder. Experienced agents can help you through the selection process. They will likely be able to suggest available builders, and they should also be able to help you come up with good questions to ask when you interview potential candidates.
4) They'll remind you about resale value
When you're building a new home, it can be all too easy to get caught up in creating your perfect dream home. When viewed separately, each upgrade may not seem to cost very much. Yet when added together, it’s easy to over-improve your property.
With that in mind, a good real estate agent can help keep you on track by reminding you of your new home's potential resale value. Since they know the area and the appreciation that has taken place over the last few years, they can give you a good idea of whether or not you are on track to get your money out of your investment. Remember that a house is also an investment, not just a place to live.
Do Realtors get commission on new construction?
As the buyer, you should not have to pay anything to use a real estate agent, including for a new build. In a real estate transaction, the seller is responsible for paying the agents commission. With new constructions, the builder is the one who will foot the bill and pay the real estate fees. Most builders view paying a buyer's agent fee as a cost of doing business.
This is important to keep in mind: The builder, in nearly all cases, will not give you a discount for buying a home without an agent. That’s because the fee to an agent comes from a marketing budget, rather than the construction budget, to prevent the commission from impacting their gross margin for home production.
With that in mind, there’s no reason not to use a real estate agent. From your perspective, it won't be any cheaper if you forgo one, which makes choosing someone who can advocate for you a no-brainer.
