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Do I Need a Real Estate Agent For a New Construction Home?

Posted at 07/19/2021 02:30 PM by Pat O'Connor

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Buying a new home can be an incredibly wonderful experience. And, looking at new construction homes that are either in the process of being built or newly built, adds another dimension to the home buying experience. There are many decisions to make when buying a brand new home and here are just a few examples:

  • Is the builder reputable?
  • How do I negotiate with the builder?
  • What upgrades are worthwhile?
  • Is an inspection really necessary with new construction?
  • What are the long-term plans for the community?
  • Is there an HOA?

One of the biggest decisions a potential home buyer should consider is whether to use a real estate agent for a new construction home. Many potential buyers are unaware of the advantages of using a broker to help represent them during the new home buying process. Here are some questions to ask when buying a new construction home.

What are the advantages of buying a new construction home?

It's important for homebuyers to know where the inventory lies. Many existing, older homes may be sold within days of being placed on the market. This kind of competition typically drives the price up of homes, leaving buyers forced to pay premium prices for homes that may be overvalued. How do you avoid this competition? Consider a new construction home. Competition is much more mellow and manageable within the new build process.

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I’ve found a new home that I love but I’m afraid if I don’t sign a contract, it will be gone. Are there any other options?

It is possible to enter into a contract without being represented. However, just because the sales team members may be very friendly and helpful, remember, they are not on your team. They are on the team of the home builder. And their number one priority to trying to convince you to buy, sooner than later. 

If you decide to go at it on your own in the new build world, the number one rule is to get everything in writing! This is a priority for all deals but especially when dealing with the many details of new construction.

I have not purchased a home for many years and am not familiar with current practices when it comes to purchasing a newly constructed home. Is it necessary to be represented by a real estate agent?

Just like buying a previously owned home, it’s a good idea to have a real estate agent when buying a brand new home or one still under construction. In many housing developments featuring new builds, salespeople are on hand to answer questions and guide prospective buyers through the model home options, but they are primarily there to seal a deal. Unfortunately, for buyers, a salesperson’s loyalties are to the home builder. The builders have an agent working for them (the salesperson) and the buyer should have an advocate as well. There are more contracts and addendums for the new product placements in a newly constructed home than with pre-owned homes. It’s a good idea to be represented by someone who is familiar with new build model layouts, studio selections, construction processes, and checklists.

If a buyer seems to be on the fence, do you think having a Realtor walk them through the process from start to finish would help them buy?

You have to remember that even though the salesperson may help the buyers, at the end of the day, salespeople do not represent the buyers. It’s important to distinguish between helping and representing. It is helpful to have a third party who is on the team of the buyer to reassure and reason with them when facing issues with which they are not comfortable or do not understand. It helps set the correct expectations for the buying process; plus, it adds an extra set of eyes to all contracts, drawings, and selections.

Most experienced brokers can help you determine which options/add-ons/features are worth it and what can be added later (if ever), what is a good price for an option, or if the price is out of this world. Most buyers would select options a little differently after living in their home for at least a year. Having a broker who has gone through this process multiple times and has heard tons of feedback is a real benefit for buyers on their first journey through new home construction.

Are there any drawbacks for buyers in using a Realtor?

Only if they are using an inexperienced Realtor who complicates the process and overwhelms them versus helping and guiding them. The buyer will not lose any discounts, price breaks, etc. The largest benefit is you are able to have representation with zero cost to you. This representation should help you make the most out of your new home and help guide you to spend your money wisely in a world of so many options. By using reasonable care and professional guidance, you are bound to enjoy many great years in a new home and reap substantial rewards from your due diligence when selling your home in the future.

(Editor's note: This blog was originally published in October 2019. It has been edited and updated to provide current information).

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Posted by Pat O'Connor

Pat O’Connor has dual citizenship in both Wisconsin and Colorado, having been born and raised in Wisconsin Dells, but later adopted by the Centennial State. A graduate of the University of Colorado (B.S. Journalism, 1980), O’Connor began her career as a sportswriter at the Boulder Daily Camera under the tutelage of the venerable Dan Creedon. Her experience also includes stints in public relations at Aspen Highlands Ski Area, the Colorado Trial Lawyers and the Colorado Division of Wildlife. When she isn’t piecing together sentences, the self-proclaimed “Cheesehead” enjoys hanging out with her three kids and assortment of family pets, running, playing golf, hiking 14ers, horseback riding and skiing. As a mother to two (at one time three) competitive swimmers, her favorite fragrance is eau de chlorine. During football season, she can be found cheering for the Buffs on Saturdays and screaming when the Packers score on Sundays. She loves talking sports and giving recommendations on cheese curds.

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Topics: Home Buying