One of the first decisions that must be made in the home buying process is whether to buy an existing home or build a new home. In today's market a shortage of inventory is steering many buyers towards new construction. If you decide that you would like to explore the new construction route, the next decision that needs to be made is whether or not you want a real estate agent to represent you.
Below are some of the most important reasons to hire a real estate agent when buying new construction. Read on to find out why using a real estate agent can save you time, money, and frustration when buying new construction!
Provide Representation Because It Is Important
When buying new construction many buyers believe it’s a good idea to not have a real estate agent and to use the builder representative because it will save them money. This is absolutely false. As with any real estate transaction, compensation to the buyer's agent is always paid by the seller and in this case, the seller is the builder.
What a buyer is doing by working with the builders representative is working with someone who is not representing them but instead is representing the builder. Most people do not realize the agent in the model home represents the builder. There are two parties to a transaction, the seller and the buyer. The builder (aka seller) is represented by the agent at the model home, make sure you are represented as well.
It’s important that when hiring a real estate agent to represent you in the purchase of a new construction home that you know to ask the right questions. Having an experienced real estate agent is important when buying an existing home but having a real estate agent who has experience with new construction is critical.
Some of the questions to consider asking real estate agents when buying new construction include;
Are you familiar with the new construction process?
Do you have any lenders who specialize in new construction loans?
Why do I need you to buy new construction?
How many new construction homes have you sold in the past?
Negotiate On Buyers Behalf
Buying new construction can get pretty expensive and in a hurry. Most builders will advertise their base price of their new homes and in most cases, this price is for the basic “plain Jane” home.
One of the benefits to buying new construction is the ability to make it your own. With the customization of a home comes an increase in the price. Another reason to hire a real estate agent when buying new construction is their ability to negotiate on your behalf.
Most builders will have a list of prices for upgrades and options dependent on floor plans. A real estate agent who has experience with new construction can help negotiate the prices of these upgrades and help you find communities that include upgrades in their pricing that can help save you money.
Contract Contingencies & Inspections
There are tons of reasons why having a home inspection is important when buying an existing home, but it’s also very important to have a home inspection when buying new construction. Many buyers who are purchasing new construction believe that since the home is brand new that they don’t need an inspection.
Another reason to hire a real estate agent when buying new construction is the reality that they know what inspections to recommend to a buyer. For example, if a new build has a septic system it would be advantageous and recommended to make the contract contingent on a septic inspection. The last thing that a buyer wants to have happen when buying a new home is they move into the home and there is a serious issue with the plumbing because of a faulty septic system.
This is only one example of a real estate contract contingency that a real estate agent can suggest to a buyer when buying new construction. It’s highly recommended to perform various inspections on new construction before the closing occurs.
Make Recommendations On Improvements & Upgrades
Generally a buyer is given an allotment for things such as lighting fixtures, carpet choices, cabinetry, counter tops and other home features. Real estate professionals know what home features today’s buyers are looking for in a home. One of the worst things that a buyer can do when building a home is spend lots of money on upgrades and improvements that may hurt the value of the home when the time comes to sell the home.
Another great reason to use a real estate agent when buying new construction is their ability to recommend a quality lender. The financing for new build homes is much different than getting a mortgage for an existing home.
Financing for new construction is not offered by all lenders. It’s recommended that you try and utilize a local lender when buying a new build. A real estate agent who has experience with new construction will be able to give a couple recommendations to lenders who offer new construction loans and also help you work down payment programs into your purchase.
Keep The Transaction & Build On Schedule
Buying new construction is a pretty complex process. There are many moving parts and it can be easy for the transaction and/or build to get off track.
Another excellent reason to hire a real estate agent when buying new construction is the ability an experienced agent will have to keep the transaction and/or build on track. There are many reasons why real estate closings are delayed with existing homes and with new builds there are even more.
If you decide that you’d like to buy new construction, as you can see, there are lots of benefits to hiring an experienced real estate agent. It’s strongly recommended that you do not attempt it without representation. Having a professional working on your behalf can go a long way and save you lots of time, money, and additional stress. Are you thinking of buying a new construction home? I would love to hear what is important to you, let's talk.