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 Realtors® 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.
Why you should hire your own Realtor®
You need to have a Realtor®t who represents you and looks after your best interests. It’s a good idea to have your Realtor® accompany you on your first visit to the new construction. Why? Because the builder will be responsible for paying the commission, and needs to know if you’ll have a Realtor® 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. Your Realtor’s® job is to help you get the most value for your money, with the least hassle and frustration throughout the journey. Be sure to choose someone who has experience in new construction and isn’t affiliated with the builder.
When buying new construction, here’s what your Realtor® 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 Realtor can help you understand everything. The majority of the larger builders will have lengthy, attorney-written, intimating purchase agreements that cover all the pertinent details of the new-homes purchase – from floor plans to earnest money requirements, deadlines for requesting changes to timelines for completion.
To help you negotiate 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 wallet. Builders don’t like to reduce their prices. If they do, it sets a precedence for future home buyer in the development to expect similar discounts. Builders often more likely to negotiate “on the back end” since closing costs and upgrades are a less public way to sweeten the deal. Consider asking the builder to perform upgrades at no additional charge. 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.
To go 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.
To help recommend the best financing options for you:
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 Realtor® 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 them. Often times, your Realtor’s lender can offer the same incentives and an even better experience throughout the loan journey.
To point you toward smart upgrade choices.
Your Realtor® 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 Realtor® 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.
To get everything in writing:
Getting everything in writing seems obvious, but verbal conversations are not binding. The builder’s agent often will try to sweeten the deal verbally and may be unable to get the builder to agree when it comes to putting it in black and white. If something said is important to you, your Realtor® is trained to get it approved and “get it in writing.”
To oversee a home inspection + warranty:
It’s a common misconception that new homes are perfectly built to code and safe. Never assume that because a home is newly constructed, it isn’t going to have defects. New homes have problems too. The number and severity of new-home defects often rival resale home problems. Hire an inspector to make sure everything is safe and up to code. Your Realtor® 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. The builder’s agent will not push for or offer up an inspection, so it’s up to you and your Realtor® to make it happen.
We also recommend a pre-drywall aka “framing” inspection, as well as a final inspection when the home is completed. Many new homes come with a warranty from the builder, but not all warranties are created equal. Know what is and isn’t covered and for how long. Protect yourself with a warranty. 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.