The new construction process is no less complicated than an existing home purchase. There will be a buyer, a seller, title insurance, a mortgage, an appraisal, home inspections and a bevy of other legal considerations to navigate. The construction company will have their own representation. So should you. Having an agent is truly the way to go.
Buying a home isn’t just a big financial happening, it’s an emotional one as well. The purchase and construction of your new home is fun, stressful, confusing, and wonderful all at the same time. Throw in financing, negotiation, and closing conditions, and you’ve got a full-time job on your hands. Having an experienced Realtor on your side from day one will make things manageable. Plus, your Realtor is your hub for communications, scheduling, and advice. He or she will ensure that you and all of the other parties to the transaction are on the same page, that they know when and where to show up for meetings, and that deadlines are respected.
Some of the choices you’ll get to make during the home building process are super-fun. New carpet, cabinets, paint colors – a whole new house! But there are a ton of other choices that feel more like work. Your agent can guide you through these situations and will already have done much of the research on your behalf. Some examples here include where and when to close, which title company to hire, whether to buy furniture or other necessary items before closing, who to trust regarding home inspections and whether to order in extra inspections, whether to agree to updated builder conditions or deadlines, when to list your existing home for sale, whether to sign a lease, whether to purchase flood insurance, and an endless list of other considerations. Your Realtor will help you through the not-fun parts of the building process so you can get to the closing table and enjoy your new home.
Negotiating a new construction deal is like negotiating a normal real estate deal but with a ton of extras. Your Realtor is your number one advocate from start to finish. Yes, you are a client of the builder, but the builder is also the seller. The builder wears two hats throughout the process, serving you as well as serving their own best interests as a business owner. Successful business owners understandably want to earn a profit. Therefore, you must have an advocate (i.e. your Realtor) who knows the construction process and can act in an unbiased fashion to ensure that you get the best finished product for your investment. Plus, your agent will be available after construction is completed to oversee any hold-back items later on (e.g. landscaping).
Here’s an often-overlooked fact: As a buyer, you won’t pay a commission (even for existing home purchases). You might pay a one-time fee at closing to the Realtor’s principal broker. A principal broker’s overhead fee usually runs between $200-$300, but the larger percent commission is the responsibility of the seller. The builder pays a commission to their agent, and the seller’s agent negotiates a share of that fee with your agent. If you don’t enlist the help of a buyer’s agent you are essentially agreeing to have the seller’s agent represent you at the closing table. Is that person the agent you would have chosen from day one?
Bottom line: Choose your own agent before you commit to a build job and work with someone who is focused solely on YOUR best interests
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