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FAQ - Do I need an Agent when Buying a New Home from a Builder?

By
Real Estate Agent with Brown Realty, 210-789-4216, TREC #0492321

As real estate brokers and agents, we often hear this question a lot when buyers are purchasing a New Home from a builder. Do I really need an agent to purchase that new home? Our response is always the same. Why would you want to purchase one of your most important investments of a lifetime without someone representing your interests?

 

Real Estate Broker and AgentsYes, the builder’s representatives are taught to treat you fairly and honestly, but you must remember that they do not work for you, and your interests are not their primary concern. They do not owe you any kind of fiduciary duty, since they represent the home builders. There is more to purchasing a home than just getting your price, and a few amenities. It’s always recommended that you have your own personal consultant, legal adviser, and real estate broker or agent. Why?? First, you hired them yourselves, and they owe you a fiduciary duty to always place your interests above their own. They can give you advice that you can’t expect to receive from the builder’s representative, while serving as a fiduciary.

 

What kind of advice? Well, having that third party home inspector for one is always a good idea. Although, the new home builders have their own quality control, and inspectors, it’s still a good idea to have an outside source, and someone who is representing your interests, and not those of the new home builders. On several occasions, these third party home inspectors have found items that needed to be corrected prior to closing. Plus, they will look at places that you might not even consider looking at for two years, and by that time you are out of warranty. Keep in mind that your personal buyer’s broker, or agent knows and understands the real estate market in the area, and community. They can give you accurate, and up to date marketing trends and information that can certainly help with your home purchasing decisions.    

 

Many feel that the new home builders are saving on the buyer’s agent commission, and that they can get a better price without having a broker or an agent to represent them. These New Home builders seldom negotiate price on their homes, but they are willing to give buyers a few concessions or amenities to complete the deal, but the fact remains the buyers are entering into one of the largest investments of their lives without someone representing their interests.

 

In our San Antonio market, new home builders get over 70 percent of their sales from real estate brokers, and agents, who bring their clients to their building sites. Therefore, the agent’s commission most of the time is already factored into the price of the new homes. Consequently, buyers are able to have this valuable representation, and consultation service absolutely FREE. Why not take advantage of this service, and Contact your Local San Antonio Real Estate Agent, or call 210-789-4216 Today?

Comments (30)

Lisa Von Domek
Lisa Von Domek Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Hello Jerry,

YES, YES, YES - great post as many consumers don't realize the importance of being represented in new home sales.

Jan 15, 2014 11:18 PM
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Jerry - You make excellent points here. In Colorado, builders use their own sales contracts, and unsurprisingly, they heavily favorite the interests of the builder, unlike our state standard contracts, which are very buyer-oriented. The differences can be striking, and buyers will need, at the very least, a heightened awareness of what the impacts can be.

Jan 16, 2014 12:12 AM
Atlanta's Home Inspector, David Lelak IHI Home Inspections
IHI Home Inspections 404-788-2581 - Canton, GA
Experience the IHI Difference

Jerry,

We inspect many  new constructions - most all of the clients have a realtor representing them in the deal. It is a good idea to have a third party home inspector. We have helped many new home buyers find issues - typically roof issues that need fixed. Also, here in Georgia there is a one year span of time where the client can call me to come out to inspect if they have concerns. 

Jan 16, 2014 12:36 AM
Bill Carroll
Corcoran Real Estate - Westhampton, NY
IN REAL ESTATE, REPRESENTATION IS EVERYTHING

Great article Jerry. So little emphasis is placed on buyer representation, which can make all the difference.

Jan 16, 2014 01:47 AM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Lisa. I believe many don't truly understand they need representation with dealing with new home construction. The builders certainly don't have their interest about their own.

Jan 16, 2014 02:08 AM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Dick. Most of our new construction home builders in SA also use their own contacts, and they are not written in the buyer's Best Interest. Like Colorado, our mandated state forms are more buyer friendly. It's an ongoing educational issue.

Jan 16, 2014 02:11 AM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Hi David, I think that's great that you offer your clients that one year time frame to come back out to re-inspect and make corrections. Most builder's warranty runs in that same time frame. Having a third party inspector is always highly recommended, since many buyers won't be climbing up inside the attic to look for building errors that were not caught.

Jan 16, 2014 02:14 AM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Hi Bill, I am surprised that it's a ongoing problem educating buyers about representation. But most buyers are do aware of the benefits of having an agent to represent them. Many won't hesitate to get a lawyer to represent them, but getting an agent is not the norm, and I think we certainly need to make some improvements on getting the word out to the general public.

Jan 16, 2014 02:17 AM
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

A buyer's agent is just that: the ONLY one involved in the transaction that is representing the BUYER! I constantly tell people that.

Jan 16, 2014 02:24 AM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Barbara Jo. It's a constant educational thing for buyers. Many just don't get it. Besides, it's FREE to have representation.

Jan 16, 2014 02:43 AM
Kate McQueen
Realty Associates Texas - Cypress, TX
Tailored service for your real estate needs!

Very good points Jerry!  While many buyers think that using an agent, putting the builder in the position of paying the commission, that they will pay more for the home.  The OPPOSITE is true in most cases.  An agent can help navigate a buyer through the process to achieve a better end result.

Jan 16, 2014 03:08 AM
Debb Janes
Nature As Neighbors - Camas, WA
Put My Love of Nature At Work for You

I, for the most part, represent builders. When buyers sniff around hinting at deals if they don't bring in their agent, I stop the conversation immediately. Yes, I can make more money if they aren't represented, but personally, I always tell them to hire an agent. It's in their best interest. I have only represented one set of buyers in my current neighborhood - naturally, we had a home inspection and I worked extremely hard to make sure they were well represented.

Jan 16, 2014 03:11 AM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Kate. Buyers do have a issue understanding this whole process with new home construction. Many of those contracts are not in the buyer's best interest either.

Jan 16, 2014 07:38 AM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Debb. There is a Myth that they can get a better deal without an agent representing them. That is so far wrong the Truth and misleading. At least you are letting them know upfront that it's in their best interest to have their own agent.

Jan 16, 2014 07:41 AM
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

I have bought a lot of homes over the years and never regretted have an agent by my side keeping the paperwork flowing.

Jan 16, 2014 08:42 AM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

That's great to hear, Bob. We certainly need to get the message out there to the general public.

Jan 16, 2014 12:09 PM
Patty Blackwelder
Twins Selling Real Estate - Woodbridge, VA
Top Producing Realtor-New Home Buyer Specialist

Buyers seldom think when they walk into a model home they are giving their right up to representation if they sign a guest card. Some get very upset when they find this out. It is not told to them upfront and therefore you must wonder what else is not mentioned. I have worked for four large builders and all of them had about 70% agents sales. You do not get a better price if you do not use and agent. The builders tha play that game breed discontent in the very neighborhood they are building and do nopt last long. With an  agent you are likely  get the same offer everyone else which is in everyone's best interest. There is alot more to buying a home then picking a house and signing a contract that is the easy part. Questions on options, colors, what will sell in the future, what is the best use of your budget based on resale. What home site is best and am I missing anything about it? When you are buying with emotion it would serve you well to have a professional with you to guide you.

Feb 08, 2014 02:20 AM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Thanks, Patty. You experience as a builder's representative and how buyers are treated without their own agents is an "Eye Opener". Many buyers just don't get it. It seems to be a continuous educational thing, but then there's that loyalty thing too. Many are not loyal either.

Feb 08, 2014 02:44 AM
Kevin Vitali
EXIT Realty Beatrice Associates - Middleton, MA
Helping Massachusetts Home Buyers and Home Sellers

Yes, yes and more yes.  When buying a new constuction you need an agent more then ever.  First if the house is not completed, you need an agent to explain what you are getting.  If you go directly to the builder or the agent that works for the seller, you will quite frankly be led to believe you are getting something other then you are.  And, its not because they are lying, its more you don't know the questions to ask.

Also, if there is anytime you need something in writing it is in commitment to you the buyer.  A verbal just isn't good enough.

Get an agent that is well versed in new construction to represent your interest in the transaction.

Mar 10, 2014 09:32 AM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Kevin, One would think by now that buyers would want an experienced agent, who is well versed in new home construction to represent them, but many still think that going straight to the builders and their representatives gives them a better deal.

Mar 10, 2014 09:40 AM