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Wednesday, January 11, 2023

Can a Buyer's Agent Help if I Want to Build a New Home? (Updated)

So that's a question we agents get sometimes. We sure can. Many home buyers don't know that Realtors are a very valuable resource to someone who is considering building home or buying a an "inventory" home (A.K.A. a "spec" home). Did you know that greater than 50% of people who build or buy a new home in this area use a buyer's agent? I'll bet you didn't!

Many people think that a "Realtor" can't really help them with a new-build property because Realtors just "sell homes." But that's not really true if you have a buyer's agent (or in my case, an exclusive buyer's agent). So, what can a buyer's agent do for you? Can they really bring "value" to the purchase of a new home?

First off, it's important to understand that almost all builders are "friendly" with Realtors and will pay a "co-op fee" to a buyer's agent. This is built into the price of the new-build. Did you know that? In the old days it was possible that you might be able to "knock this off the price" if you didn't have a Realtor, at least with some builders. However, builders don't do that anymore. The good ones, IMO, never did. These days it's just part of the price. If you, as a new-home buyer, don't have a buyer's agent the builder simply pockets the money that is included for your buyer's agent's fee. It's just like having a Realtor on a resale house. The fee is already in there so why wouldn't you get your own representation, somebody looking out for you? Why wouldn't you engage the services of somebody who understands the process and will be there on your behalf?  You would!

The other thing new-home buyers need to understand is that the builder representative, or the Realtor who might be working in that model, always represents the builder. Their job is to sell you one of their homes and sell you options. Nothing wrong with that, it's their job. Most of them are very professional and knowledgeable. However, they are biased for their company and aren't likely to tell you any negative sentiments about them or tell you about the positives of another builder. There primary job is to represent the builder and protect the builder's interest. So, you should always have somebody protecting your interests!

So what kind of things can a buyer's agent
do for you if you want to buy a new-build home?

  • Most buyer's agents are familiar with most, if not all builders in the area. 
  • A buyer's agent can tell you about the differences between builders. For example, what price point they build in, what style of home (production, semi-custom, custom), what materials they use and what is good/bad, who is easy to deal with, who is not, who is higher quality and who is not, etc.
  • A buyer's agent can help you through the process and tell you what to expect from the beginning to the closing. Many buyer's agents like me have helped buyers with new-build homes and have even been through the process personally. I built my own home in 2007.
  • A buyer's agent can help you pick options by suggesting things that you may not have thought of since your agent has been through the process before. They can also tell you why you should/should not add/subtract certain options from a resale perspective. And they can usually tell you what options other buyers like, and which may add value to the home.
  • A buyer's agent also acts as a "go between" between you and the sales rep or the superintendent. Sometimes you may not have time to deal with an issue or you may not understand an issue that has arisen. A buyer's agent can take care of the problems for you that you are not able to address due to time or lack of understanding.
  • A buyer's agent will be there for all meetings with the builder salesperson, superintendent, or otherwise. They will also visit your lot weekly, give you a progress update, and take pictures of the home as it is being built. This gives you a pictorial record for future reference and also allows concerns to be more easily addressed.
  • A buyer's agent will help you schedule at least (2) home inspections, done by an inspector of your choice. Did you know you should have your own independent inspection, even on a new build? That's right. And a buyer's agent will help you negotiate the problems that arise from the inspections.
  • A buyer's agent can help you pick the right floor plan based on your needs, the right subdivision based on your needs, and can help you with lot-orientation and with picking the right lot. There are some lots you absolutely do NOT want to have (This is very important!). There are some floor plans that may be very hard to re-sell or that may be better for you based on your needs and desires.
  • And yes, a buyer's agent can potentially help you negotiate the price of a new build. Granted, there isn't normally as much negotiation as with a resale property but there is usually some room for negotiation. This is especially true of an inventory home, a home that is already built and is completed or almost completed. Many of those will sell for much less than the asking price because a previous buyer has backed out and the builder wants to move it from their inventory.
  • Some builders offer "bonuses" to a buyer's agent, like extra commission, gift certificates, big screen t.v.'s, and even vacations! A good buyer's agent, like me, will usually pass these incentives on to the buyer. After all, you are really the one who deserves any incentives because it's really your money that's paying for them!
So, if you are considering buying or building a new-build home please consider using somebody who has experience helping buyers like yourself and who will be there as your advocate throughout the entire process. I guarantee you will be glad you did!