Looking at new homes is exciting and fun, and not only that but the agents there make it seem so easy to sit down and purchase your home. You simply walk through the models, choose the one you love, pick your favorite little piece of dirt in the neighborhood for your house to sit on, sign your contract, and there you have it. You now own a home.
Well, one thing new home builders and the agents there, don’t want you to know is that you can bring your own agent with you to represent you in the transaction. Why would they not tell you something like this you ask? Well, if you forgo your own agent and simply work with the one at the new home site, the builder gets to pocket the money that they’ve set aside in their budget for your agent’s commission.
Now many buyers will wonder if this money they set aside can’t simply be used to reduce the price of the house they’re purchasing. After all, if the builder doesn’t have to pay another agent, shouldn’t they be willing to cut you a deal? Well, the unfortunate truth is that this is not the case. Builders and the agents that represent them cannot simply reduce the price of the home you’re purchasing as this greatly affects all of the homes they will sell in the future. Not only that, but it’s bad business and can create tension between the builder and previous home buyers. Reducing the sale price of a home for one buyer is a lawsuit waiting to happen.
Just imagine you purchased your new home for $550,000 two months ago, only to find out that your neighbor, who will be moving into the same exact model as you, got theirs for a steal at $533,500. You’d be pissed. This is why you won’t see home builders reducing their price just because you decided you didn’t need an agent. Now, sometimes you can walk in and negotiate other credits, but in my opinion, it’s always best to have someone with you that has experience with these types of transactions and has your best interest at heart.
Here are some of the benefits of bringing an agent with you to a new home.
1. They will negotiate the best deal possible for you.
As I mentioned before, the builder will not be willing to lower the sale price of the home, however, most agents that have worked with new home builders/agents before know there are a few other items up for grabs. An experienced agent may be able to get you credits for closing costs or the design studio. They may also be aware of certain incentives that are available but not necessarily advertised, such as upgraded appliance packages.
2. They will help show you what’s included in the base sale price versus what is considered upgraded.
Model homes are amazing, and they’re amazing for a reason. They’re typically chalk-full of costly upgrades. When you walk into a model home expect that everything from the type of flooring and cabinets, to the height of the baseboards, will be an additional cost. Seasoned agents know to ask which features are included versus upgraded and how much previous residents typically spent on upgrades. This will help protect you from unanticipated costs in the future.
3. They can help explain the contracts to you and make sure you understand your agreement with the builder.
It’s always important that you, as the home buyer, read through all of the contracts thoroughly to make sure you understand all the terms of the agreement, but working with an experienced real estate agent means you’ll have someone on your side to answer any questions that you may have as you’re going through the paperwork. Buying a house is typically one of the largest purchases a person makes and it’s important that you feel comfortable with your decision and understand all the in’s and out’s of the contract.
4. They will know the various builders and can provide insight about different neighborhoods and the quality of the homes.
Most real estate agents will have an understanding of the various builders in their area and will be able to provide a buyer information about the types of floor plans they have, the benefits or negatives of working with a particular builder, and the quality of the homes they build. Working with someone that can provide you this type information can be extremely helpful if you are struggling to choose between builders.
5. They will help get you the best value for your money and cost you nothing.
As I’ve alluded in some of my previous points, having an agent represent you when you purchase a new home will help make sure that you’re getting the best deal possible. In addition, they are there to offer you any advice you may need and can help make suggestions when it comes to the various upgrades you may want to make and whether or not they are worth your money. Resale value is not always important to everyone, especially when it comes to comfort or buyers who plans to own the home for many years, but it can be helpful to know that some upgrades can either be made to your home later or will never increase the future value of the house. Not only can your agent help save you some money, but they also won’t cost you a penny. As I mentioned earlier, the home builder, who in this case is the seller, pays your agent and has already set aside the budget to do so.
Some other things to note when it comes to a buyer’s agent and buying a new house…
You should always try and bring your agent with you to the new homes or at the very least, let the builder’s agent know that you intend to use an agent. Sometimes builders have strict policies about working with a buyer’s agent, which can include that they need to be present when you initially view the homes. If you absolutely can’t wait, and your agent isn’t able to go with you, bring along one of their business cards to give the agent working at the new home.
You should always vet your agent. Just because you’ve already found the house, doesn’t mean you don’t need a stand-up agent. Make sure whoever you choose will be with you from start to finish and will help guide and offer advice wherever needed through the entire process. A full-service agent will be ready to provide insight on which upgraded fixtures and features will provide the best bang for your buck in the future, as well as be ready to accompany you through your final walkthrough. If you're not sure that your agent is "the one", you can read more about our thoughts on choosing the right agent here.
Make sure you do your research if the builder you select offers some type of mortgage program before you sign up. The program they offer may be the most convenient, but it may not always be the best choice for you. Ask your agent if they can refer you to another mortgage lender or if, in their experience, the builder’s preferred mortgage lender has offered comparable rates and deals.
We recommend getting a home inspection even though you’re purchasing a new house. New homes have the potential to have structural or interior defaults, same as any resale home, and it’s always a good idea to have a certified inspector walk through the property. Not every agent will help with this, but Zach always recommends an inspector and offers to book the appointment. Not sure exactly what an inspection is or why you should get it... we break it down for you here.
If you have any other questions about why you should always have an agent represent you when you buy a new home, feel free to contact us or ask us a question in the comments below!