Buying a new home is an exciting journey. It’s a chance to customize your living space and make a long-term investment. But when purchasing a newly constructed home, many buyers mistakenly believe that they don’t need their own representation—especially since the builder provides a sales advisor to help guide them through the process. However, this sales advisor works for the builder, not for you. To protect your interests and ensure you're getting the best possible deal, having an experienced real estate agent in your corner is crucial.
The Sales Advisor Works for the Builder, Not You
One of the most critical aspects to understand when purchasing a newly constructed home is that the builder’s sales advisor is employed by the builder. Their primary responsibility is to sell homes on behalf of the builder, and they are not there to represent your interests. While they may help you select options, walk you through the sales process, and offer builder-specific incentives, their ultimate goal is to maximize profits for the builder.
A real estate agent, on the other hand, works for you. They’re your advocate throughout the buying process. They can help you understand the terms of the builder’s contract, suggest better negotiating strategies, and spot potential issues with the construction or financing options that might not be immediately obvious. Without an agent, you're navigating this complex process alone, without anyone in your corner to provide guidance or protect your interests.
A Good Agent Monitors Construction with a Trained Eye
One of the significant benefits of working with an experienced real estate agent when purchasing a new home is their ability to monitor the construction process. Your agent can attend walk-throughs with you and inspect the property with a critical and educated eye.
For most buyers, walking through a home under construction can feel overwhelming. There are unfinished walls, exposed electrical systems, and construction debris. However, an experienced agent will know what to look for during these walk-throughs. They can identify potential problems, like poor craftsmanship or code violations, that may not be visible to an untrained eye. This can help prevent costly issues down the road and ensure that your home is built to the highest standards.
Your agent will also keep track of key deadlines and ensure that the builder stays on schedule. This oversight is invaluable in a process that can sometimes be unpredictable, especially when it comes to construction timelines.
The Price Is the Price—With or Without an Agent
Many homebuyers believe that if they don’t use a real estate agent, they can negotiate a lower price on their new home. Unfortunately, this is a myth. Builders set their prices based on market conditions and their cost to build, and those prices are typically non-negotiable. Whether you use an agent or not, the price of the home remains the same.
What most buyers don’t realize is that the commission a builder would pay to your agent is already factored into the price of the home. If you don’t have an agent representing you, that money simply goes back into the builder’s pocket as profit. In other words, you aren’t saving any money by going without representation—you’re just giving the builder a higher margin on the sale.
By working with an agent, you gain the advantage of their expertise without adding any additional costs to your home purchase. And while the home price may not be negotiable, your agent can often help you secure upgrades, better financing terms, or other incentives that enhance the value of your purchase.
Builders Are Still Paying Agent Commissions, Despite the NAR Lawsuit
There has been a lot of discussion recently surrounding a lawsuit involving the National Association of Realtors (NAR) and how real estate agents are compensated. While this lawsuit has implications for the real estate industry, it doesn’t change the fact that builders continue to pay agent commissions in new construction transactions.
When you work with an agent to buy a newly constructed home, the builder typically covers the agent’s commission. This fee is already built into the cost of the home, so it doesn’t come out of your pocket. The recent legal changes primarily impact resale transactions, not new construction sales. In short, you can still enjoy the benefit of having an agent represent your interests without any additional cost to you.
Builder Incentives: The Fine Print You Need to Know
One of the tactics builders often use to attract buyers is offering enticing incentives, such as paying a portion of closing costs or providing upgrade packages. These offers can seem like no-brainers, but there’s often a catch—they’re usually tied to using the builder’s preferred lender. While this might sound like a good deal on the surface, the truth is that these incentives don’t always provide the best financial benefit in the long run.
A professional real estate agent will help you evaluate whether using the builder’s lender is truly in your best interest. While the builder’s lender may offer lower closing costs or a discounted rate, these perks can sometimes be offset by higher fees or less favorable loan terms. Your agent can compare the builder’s offer to other financing options, helping you determine whether sticking with the builder’s lender is the right choice or if you’d be better off seeking outside financing.
Moreover, builders often bundle these lender incentives with other incentives that seem appealing, like free upgrades or appliance packages. However, an agent can help you calculate the true value of these incentives and weigh them against potential alternatives, ensuring you make a fully informed decision.
Why Not Work with an Agent? It’s a Win-Win for Buyers
In summary, there are numerous advantages to working with a real estate agent when buying a newly constructed home. From monitoring the construction process to helping you evaluate financing options and securing additional incentives, a good agent provides expertise and peace of mind that you simply won’t have when going through the process alone.
Best of all, working with an agent doesn’t cost you anything extra. The price of the home is the same whether you have an agent or not, and the builder typically covers the agent’s commission. So, rather than leaving money on the table for the builder to pocket, why not have a professional represent your interests and ensure you’re making the best decisions?
If you’re considering buying a newly built home, don’t go it alone. Partner with an experienced real estate agent who will work in your best interests and help you navigate the complexities of the home-buying process.
