When you’re house hunting, the allure of new construction is undeniable. You get to be the first to live in the pristine home—one untouched by grimy hands or muddy shoes. It’s full of brand-new appliances and the finishes and treatments that you picked to fit your aesthetic. And you won’t have to worry about making any cosmetic or structural upgrades for years.
If you are interested in buying a new construction, the builder’s agent will be ready to help you with the process. But make no mistake: You need your own Realtor from the get-go. Even if it seems like plug and play to sign up with the builder’s on-site agent, you’re going to want someone representing your side of the deal. Builder contracts and the building process is different from what most real estate agents deal with on a daily basis, so having new construction experience is important.
What is a builder’s agent?
When you buy a new construction, the home’s builder is considered the seller, and the agent representing the builder is called the builder’s agent.
The builder’s agent will always have the builder’s best interest in mind. After all, the job of the builder’s agent is to get the highest price for the homes the builder is selling so the agent is not going to be as eager to negotiate down.
Why you should hire your own real estate agent
You need to have a real estate agent who represents you and looks after your best interests. It’s a good idea to have your real estate agent accompany you on your first visit to the new construction. Why? Because the builder (aka the seller) will be responsible for paying the commission, and needs to know if you’ll have a real estate agent representing you. So bringing your agent to the first visit will make it clear that the builder’s agent will be on the hook for paying commission. Some builders might even refuse to pay your agent a commission if you don’t register the agent the first time you visit the home on a new construction site.
Your real estate agent’s job is to help you get the most value for your money, with the least hassle and frustration throughout the journey.
When buying new construction, here’s what your real estate agent will help you with that you might miss out on if you stick with the builder’s agent:
To help you review your contract: Even if you’ve purchased a home before, the contract for new construction is a whole different animal, and an experienced real estate agent can help you make sure you understand everything. The majority of larger builders will have lengthy, attorney-written, intimidating-looking purchase agreements that cover all the pertinent details of the new-home purchase – from floor plans to earnest money requirements, deadlines for requesting changes, and timelines for completion.
Going to bat for you: From the first time you visit the sales center, to choosing your layout, construction, inspections, and finally closing, there are ample opportunities for things to go sideways — think construction delays, permit issues, and financing concerns. An experienced buyer’s agent can help you navigate all of these sticky situations.
Negotiating extras: Builders are not like regular sellers. They are not emotionally attached to the property. They make decisions based on what is best for their bottom line. Builders don’t like to reduce their prices. If they do, it sets a precedence for future home sales. Builders are more likely to pay for closing costs or offer design center incentives than to drop their prices. Want upgraded counters or appliances in that new home? Your agent can help you with all those extra perks, amenities, and upgrades.
Side note: Some new-home buyers think that if they do not use an agent for their purchase, the builder will reduce the price of the home by the amount of the commission. This cannot be further from reality, in almost every case. Builders do not want to reduce their prices because it sets the comparison price for future home sales in that neighborhood. Builders instead add the commissions paid to a buyer’s agent into the marketing budgets of the homes.
Recommending financing. Builder’s love it when a buyer uses their preferred lender. In most cases, they will even offer some enticing incentives to ensure a buyer chooses the preferred lender. Even so, a buyer should not just automatically use this lender. Your real estate agent can help make sure that you’re getting the mortgage that works best for your situation. Shopping around is always wise in order to find the best loan for you, not for the builder. Often times, your real estate agent’s lender can offer the same incentives and an even better experience throughout the loan journey.
To point you toward smart upgrade choices. Your real estate agent will request a feature sheet on the homes you’re interested in and review them with you carefully, to compare feature to feature. It’s important to distinguish what comes with the base home price versus what are upgrades in the model home, and upgrade options for you to select from.
Some builders will offer you endless options for finishes and upgrades, and it’s easy to get overwhelmed. A seasoned real estate agent can recommend the upgrades that will get you the most bang for your buck in resale value, suggest finishes that might be cheaper to do on your own, and help you avoid over-improving, which can jeopardize your appraisal before closing. Other builders have only strict pre-designed packages to choose from. The stage of the build matters also. You may write a contract after the kitchen cabinets are already ordered by the builder, and in that case, your upgrade options will be much fewer.
Get everything in writing. Getting everything in writing seems obvious, but the builder’s agent says during a showing of a new-construction home. If something said is important to you, your real estate agent is trained to “get it in writing”.
Overseeing a home inspection + requesting a warranty: Your real estate agent should make your sales contract contingent on a final home inspection by a professional you hire, as well as a home warranty provided by the builder. Not all builders will include this in their standard contract. Never assume that because a home is newly constructed, it isn’t going to have defects. The number and severity of new-home defects often rival resale home problems. The builder’s agent will not push for or offer up an inspection, so it’s up to you and your real estate agent to make it happen. We recommend a pre-drywall aka “framing” inspection, as well as a final inspection when the home is completed.
Protect yourself with a warranty. All new homes come with an implied warranty from the builder stipulating that any major defect of the structural integrity of the home must be repaired. Ask for a builder’s warranty for a period of time following move-in (a year, for example) that covers any defects in craftsmanship, as well as systems and appliances. Preferably, this warranty should be backed by insurance.
Everyone wants to walk away from buying a home—whether it be a new construction or not—with peace of mind. With a professional you trust by your side, you’ll rest easy knowing someone is there to protect your money, your time, and your new home.
Wondering if new construction is right for you? Search new construction listings and rely us on for more home buying tips and resources to help you decide on the right opportunities.