top of page

Hiring A REALTOR® When Buying New Construction

When buying a newly constructed home many buyers believe it’s a good idea to not have a real estate agent and to use the builder's representative. They tend to think this will save them money, which is absolutely false.

Builder's Agent vs. Buyer's Agent

When you buy a new construction, the home's builder is considered the seller, and the agent representing the builder is called the builder's agent. "The builder’s agent will always have the builder's best interest in mind.” This is because the job of the builder's agent is to get the highest price for the homes the builder is selling, so the agent is not going to be as eager to negotiate down.

As a buyer working with the builders representative, you are working with someone who is not representing you, but instead representing the builder. The builders representative is working in the best interest of the builder, not a buyer. Having representation of your interests is critical when buying new construction.

You may not know that the commission for buyer representation is legally part of the purchase price. If you are not using your own Realtor, the builder simply receives an extra 3% from your purchase. Therefore, it’s essentially FREE for you to use a Realtor. Yes, FREE.

Experience isn’t expensive.  It’s priceless. A buyer's agent, who understands the ins and outs of home purchasing, can work on your behalf to negotiate a better deal, free upgrades, or simply whatever is in your best interest.  Most people wouldn’t consider buying an existing home without a Realtor to represent them.  Therefore, why consider going through the even more stressful and complicated process of building a home without someone on your side?  In many cases, you are committing to something that doesn’t even exist yet.

Additional Benefits

Another benefit of hiring a real estate agent when buying new construction is the reality that they know what inspections to recommend to a buyer. It’s highly recommended to perform various inspections on new construction before the closing occurs. The last thing that a buyer wants to have happen when buying a new home is they move into the home and find out there are issues such as a faulty septic system.

Real estate agents also are able to recommend a quality lender. Financing for new build homes is different than getting a mortgage for an existing home, as it 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.

One of the major differences of new construction loans is that the lender will make periodic payments to the builder as progress is being made on the home.  These are sometimes referred to as “draws.” A buyer will make payments to the lender while the home is being built and upon completion the buyer will get a new mortgage. The buyers new mortgage will payoff the construction loan and becomes the financing the buyer will have for the life of their loan.

A lot of the national builders are publicly traded companies. They need to meet sales goals and answer to the shareholders of that company. For that reason, toward the end of a quarter, builders tend to be more aggressive with their incentives in order to meet these sales goals.

The December holiday season is another great time to buy. Most of the country is out shopping and traveling to see family. Very few people shop for homes this time of the year. For that reason, ’tis the season to find some great incentives to purchase a new home.

If you decide that you’d like to buy new construction, as you can see, there are lots of benefits to hiring an experience real estate agent.  It’s strong recommended that you do not attempt it without representation. Your real estate agent's job is to help you get the most value for your money, with the least hassle and frustration.



bottom of page