New home construction has a lot of appeal. It’s a brand new house (no strange carpet smells from the previous owner’s cat), customizable (no dated fixtures!) and fairly maintenance free for years. It’s exciting to tour model homes and pick a plan that’s right for you. But buyer beware. You need an agent when you build a home.
When you build a home, it’s a process that requires representation at every step. Here are 11 compelling reasons why you need an agent’s representation when you build a home:
Representation. It seems obvious, but many people don’t get why this is important when you build a home. The site representative represents the builder. Who’s looking out for your interests? It’s also important to understand that many builders use sales reps, not licensed real estate agents. So they’re not legally bound to disclose information a licensed agent would have to tell you.
No out of pocket cost. The builder/developer pays the agent’s commission. The one caveat is that you must let the builder’s rep know up front. Whether you’re looking online or walking into a sales office, don’t register (or put your name on an interest list) without an agent’s name, or the builder may not pay the commission. The broker’s commission is actually built into the builder’s line-item budget. Don’t believe the line that you’ll get a better price by skipping the agent commission.
Builder reputation. A good agent knows what’s going on in the market and who the good builders are. Large-scale builders work to keep good reputations. But smaller custom home builders come and go. An agent will be able to warn you of any issues the builder has had in the past. Plus, they know which builders and designs have the most resale appeal.
Negotiation. When you walk into a builder’s sales center with an agent, the rep immediately knows two things. First, you’re a serious buyer. Second, you’re going to negotiate. The builder has no reason to negotiate if you’re on your own. An agent brings market knowledge and a strong understanding of what’s negotiable, from purchase price to incentives like finishing the back yard.
Appraisal/market value. Like a car, sticker price isn’t the same thing as actual value. Do you know if the builder’s price is comparable to area home values? Do you have to put in a lot of expensive upgrades to meet the existing neighborhood’s features?
Model vs. reality. Oh, the gorgeous model home. Decked out with designer furniture, high-end hardwoods and the latest appliances, it’s a fantasy world. If an agent walks through the model with you, you’ll easily discover what’s standard with the base price, and what add-ons add real value to the house.
Design selections. Going to the design center is both exciting and stressful. You have a certain amount of time to pick from a myriad of flooring, cabinet, fixture and counter options. An agent can help you make good choices for property value and resale. They also know what design trends are in or fading quickly.
Construction process. There are things to consider when dealing with new construction. What’s going to be built behind your house? Are they selling quickly or are you going to be dealing with dust and contractors for several years? Are there permit delays that will affect your move-in timeline? When can you visit the site?
Inspection. Multiple inspections happen throughout the construction process. Do you know what to look for? Unleveled floors, crooked walls and windows in the wrong place (yes this has happened) are some of the things that can be overlooked and even pass at inspection. Your agent can recommend a good independent inspector (or are you going to take the builder’s word for it?). Take your agent to the final walk through – put every item on paper, from cracked tiles to poorly installed towel rings.
Insurance. Most reputable builders do have a third-party limited warranty. But think of it like a car warranty – you get “bumper-to-bumper” coverage for about a year, then just “powertrain” (structural defects) for some years after that. Look for an agent that carries individual Errors & Omissions insurance. An agent’s E&O can extend to you to cover legal action for certain cases.
Contracts/paperwork. Hello hand cramps – there’s a huge volume of paperwork for new home construction at the initial contract stage and at closing. Beyond the usual real estate transaction documents, there are forms for a variety of important disclosures: site plans, boundary lines, radon, mineral rights and more. These are not documents to gloss over and sign.
- An actual Redefy listing. What new home upgrades would you get with what you save?
Remember, there’s a lot that goes into building a new home. You have nothing to lose and many benefits to gain if you have an agent represent your interests.
At Redefy, we can sell your current home for $2,500* with full service. That's thousands you can apply to your new home purchase — for a bigger model or better upgrades! We're also happy to represent you when you're ready to pick out that new home — at no cost to you!
*Broker co-op may apply. Redefy $2,500 flat fee vs. traditional 3 percent listing commission.
