If you are considering purchasing a new home, here are a few questions you should ask when deciding on hiring a Realtor.
Who Does the Sales Team Represent?
When buying a new construction home, the builder will be represented by a licensed real estate agent who is usually the sales associate you meet at the model home. The Realtor has a fiduciary, moral and legal duty to represent their client, which is the builder. When a buyer works with the seller’s real estate agent, the buyer can fall under two categories: “Unrepresented Buyer” or “Dual Agency”.
An Unrepresented Buyer means you represent yourself and the builder’s agent has a fiduciary responsibility to represent the seller/builder, and is not representing you and your best interest in the purchase.
Dual Agency means the Realtor is representing both the buyer and the seller, which is you and the builder. While the real estate agent has an obligation to represent both parties fairly and ethically, the builder and is usually the agent’s only client as builders don’t want their agents selling other homes to potential buyers. This could potentially result in unfair representation due to the nature of the agent's relationship to the builder.
Will You Save Money Without a Realtor?
Actually, you won’t. Here are the reasons why:
· It is of the utmost importance that the home builder retains the value of their community. Cutting prices set the precedence for every sale that takes place afterward. If a buyer receives a discount, the next buyer will want that too. Builders want the prices their homes sell for to remain consistent and to raise over time, not drop.
· Builders have a marketing budget. The commission that is paid to a buyer’s Realtor is included in that budget. If a buyer forgoes their own representation the builder doesn’t pass that savings to the buyer, they simply keep that money.
Are You Getting a Good Deal?
When looking at new homes, a buyer doesn’t know how the overall cost of the home, with the options and finishes they select, compares to the market in that area of other new homes or similar existing homes. A real estate agent that is representing your interests can make sure that you are making a good investment by providing comparable sales. It’s important to know that you are not overpaying for a home should you need to sell it sooner than expected.
Which Options Should You Choose?
One of the advantages when buying a new construction home is getting to select the finishes such as kitchen cabinets and counters, fixtures, flooring, window treatments, and many other added options. It can be exciting to design your new home exactly the way you want it.
The base price of the home includes standard features, which excludes much of what you will see in a model home. For example the counter tops shown in the kitchen or even something as simple as the sink in the laundry room may be considered an upgrade. What comes standard varies between different builders and even in different communities by the same builder. A knowledgeable real estate agent will be able to tell you how each community compares to each other in terms of what you are actually getting for your money. For example, a house in one community may appear to be less expensive than a similar home in another community, but it may also have less expensive standard finishes and options, which is reflected in the price. Once the homes in the two communities are compared to each other with comparable finishes, the prices may be very similar or the less expensive home may actually cost more.
A real estate agent can help you determine if the builder’s cost of certain upgrades are reasonable or if it would be more cost effective to do some upgrades after closing. They also can help you identify upgrades that will receive a higher return on the investment and identify which ones won’t increase the value of the home when you resell it later.
How Much Time Do You Have?
There are a lot of new neighborhoods being built and it can be overwhelming to know where to start. Just as a buyer hires a real estate agent to help them find an existing home for sale that meets their wants and needs, buyers of new construction homes should do the same. A real estate agent who is knowledgeable about all the new construction communities can help narrow down which neighborhoods are right for you based on what you are looking for in a home, the type of neighborhood and amenities you are seeking, and the timeframe in which you need to buy. Even though builders may be advertising new communities, it doesn’t always mean there are available homes at that time and it may be months before the next phase is released. Instead of driving around from neighborhood to neighborhood, hiring a Realtor who is in contact with the builders in the area can save you a lot of time by showing you the neighborhoods that best fit your needs.
How Soon Should You Talk to a Realtor?
As soon as you are considering purchasing a new construction home, you should hire a real estate agent. Most builders have a provision that excludes a buyer from using a real estate agent if they visit the model homes even once without an agent. When you visit the sales office to tour the model homes you register your name before viewing the models and your Realtor must be present with you to register on your first visit. Even if you aren’t sure that new construction is the right fit for you, having a Realtor with you will benefit you should you decide to purchase a new home either then, or in the future.
Are you interested in looking at new construction homes? Click Here to begin your search for the home you’ve always imagined!