It's a common misconception that you don't need the help of a real estate agent for new construction. However, an experienced Realtor can help in many aspects of purchasing a newly built home from negotiation to understanding the fine details of the contract. Working with a real estate agent for new construction can make the process easier and may even get you a better price—at no cost to you!
Amy Shocket, a broker-salesperson for Dickson Realty, frequently works with home buyers who are purchasing a new construction home. So, I sat down with her to talk more about why you need a real estate agent for new construction.
Do you think most people know they should be represented by a real estate agent when buying new construction?
Amy: Absolutely not. They're out on the weekend, driving around, looking at new construction, open houses, and neighborhoods. However, they don't understand that if they just pull into the builder's office, walk in and register, that the builder is not going to pay an agent to represent them. That doesn't mean that they can't be represented, it just means that the builder is not going to pay the agent.
So, if a buyer arrives with a real estate agent for new construction, then the builder will pay the agent's commission?
Amy: That’s correct. Most new home subdivisions are offering co-op commissions to agents to bring in buyers. However, many builders also have rules stating that your agent must accompany you on your first visit and some even consider registering on a builder's website to receive updates as a first visit.
Why is it so important to have a real estate agent for new construction?
Amy: The sales agent at the new home subdivision represents the builder or developer exclusively. Buyers who don’t use a real estate agent for new construction are unrepresented in the transaction. You need the expertise of a buyer’s agent to show you the comparable sales in the area so that you can negotiate the best deal with the builder—including incentives, upgrades, discounted financing, and more.
How else can working with a real estate agent for new construction help buyers?
Amy: Expert REALTORs know what questions to ask. When I have a buyer who is interested in new construction, I’ll call the developer and ask "Have there been any upgrades already selected for the home? What's still available to be selected? Who is the preferred lender and is there an incentive?" I'll ask questions about how delays in construction could impact the loan process. Most buyers don't know to ask those questions.
Why do you think buyers don't work with a real estate agent for new construction?
Amy: I think there's a common misconception that if the buyer goes in without an agent then the builder is going to offer a better price because they don't have to pay an agent. That's probably not the case. The builder has built the commission into the price, so they're going to make more money if they don't have to pay commission. The only time the buyer is going to end up having to pay a real estate agent for new construction is if they want to have representation, but they've previously gone in and registered.
Any other words of advice for when it comes to having a real estate agent for new construction?
Amy: I think whether you’re buying new construction or resale, this market is very challenging from the buyer's perspective. To try to navigate it without an experienced agent is going to lead to frustration and heartache. If you want to look at new construction, have an experienced real estate agent with you. We'll help you. We know where all the new home developments are and what might be a good fit. Just don't go without us because we want to be able to help you.
