Do I Need an Agent if I'm Buying a New Construction Home from a Builder?
About 10% of all homes sold in the U.S. are new construction.
We've all seen them: The big roadside billboards touting "From the high 300s!" and "Move in for only $1,500!" with balloons and a banner telling you the model is open. Here in the Charlotte market, they're on the rise. Builders are racing to keep up with the demand for new, tricked-out homes all over our area, from Ballantyne to Davidson and beyond.
New construction has a lot of advantages. It's more predictable, has longer warranties, and doesn't come with some of the logistical hurdles of owner-to-owner home sales. But all too often, clients come to us scrambling to find an agent to represent their best interests when they're way too far down the rabbit hole already.
So, do you need an agent if you're buying a new construction home from a builder?
Why People Decide NOT to Use a Buyer's Agent for New Construction
One of the most common reasons people decide not to use an agent when buying new construction is a foundational misunderstanding of how buyer's agents are paid. Remember, when you're the buyer, you don't pay your agent anything! The seller pays the buyer's agent's fee, and that's true even if the seller is a new construction builder.
Some people think they can negotiate for a better deal with the builder if they aren't using an agent...after all, that's less money the builder has to pay to Realtors, right? For the most part, this is a non-starter. Reputable builders love working with buyer's agents because they help transactions close smoothly and professionally. They want to keep the real estate community on their team, so they will rarely offer any kind of "deal" to buyers just because they don't have an agent.
Unfortunately, when you don't have a buyer's agent, you're only shortchanging yourself.
Why Do You Need an Agent to Buy From a Builder?
For the same reasons you need a buyer's agent at any other time! A buyer's agent is there to work on your behalf which means different things in different transactions. When buying a new construction home there will probably be more time spent ironing out paperwork and financing and build deadlines than working with an inspector or an architect, but it's time spent nonetheless.
As a buyer, you need someone on your team. A buyer's agent helps you determine the fair market value for the home you're buying and holds the builder's feet to the fire when they get behind schedule or try not to "include" something that was specified in your contract. They'll also do all the same things they do in a regular transaction like help you obtain financing, attend clthe osing with you, and even help get your current home sold in the meantime.
Best of all, having a Realtor by your side can help you get a better deal, even from a builder. New construction builders don't like to reduce the listing price on a home because it can impact future sales...a buyer's agent can help you find other ways to save like asking for closing costs or having a bunch of upgrades thrown in. Working directly with a builder can feel intimidating for many buyers; having an agent will help.
When to Involve Your Buyer's Agent
If you remember one thing from this article, make sure it's this: Bring your buyer's agent to the new construction home site every single time. Most importantly, the FIRST time! If you're a potential home buyer driving around and you see a sign for a great new neighborhood ("Model Home Open Today!"), call your agent! If you walk into that model home and shake hands with the builder's representative without your buyer's agent present you've already lost your chance to be represented. You can still work with a buyer's agent, of course, but you'll have to pay their fee yourself.
Wouldn't you rather have the builder pay it for you?
Hendrix Properties has represented dozens of home buyers in Charlotte purchasing new construction. Give us a call before you're ready to start looking!