Should I be Represented by a Realtor When Buying New Construction?
During my years selling real estate in the Bradenton and Sarasota areas of Florida, one question that I've heard come up a number of times has been, "Why would I want to work with a Realtor when I'm just going out to look at Builder's models or new construction homes?"
Although the process of buying a home from a builder seems relatively simple when viewed at the most basic level, ie; the Buyer drives around and looks at a couple of new build communities touring the model centers. They start talking with the sales agent at the model center and pick out a floor plan that they like, write a contract and a few months later they close the deal and move in. Easy right?
If it were always that simple, then you most certainly would not need a Realtor to represent you. However, complicated things done well, often appear to be simple. Have you ever watched an Olympic gymnast doing a perfect floor routine? Or maybe watched as Tiger Woods walked onto a Fairway, took a nice easy swing, and lobbed a ball 65 yards right into the cup? My experience has been that true professionals often make what they do appear to be very easy, that is until you try it yourself.
Having a professional Realtor, working as your Exclusive Buyer's Agent, can be an invaluable tool when you are searching for a home, even if you've decided that you're only going to look at new construction. Always keep in mind that the on-site model home agent is working as an employee of the builder and their responsibility is often legally dictated as being to work in the Builder's best interest and not for you, the Buyer.
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The good news is that almost all of the professional Builders on the market have already arranged to pay for you to have representation by a Professional Realtor, who will be working in your best interest. That means that a home being offered for, let's say, $300,000 with a Builder, will also cost you $300,000 if you go through their on-site representative, and it will cost you the exact same amount even if you're being represented by your own Realtor. Be sure that you are accompanied by your Realtor when visiting the models or the Builder may not be willing to pay for your representation if you try to come back with your Realtor later.
So what are the benefits to hiring a Realtor to represent you? First, your Buyer's Agent should be familiar with the various communities in the area that are available, and that will have homes suiting your specific price range and needs. They should be able to tell you about the positive aspects of the community and surrounding area, as well as diligently representing you to be sure you understand any potential negatives that may arise. For instance, knowing that the vacant field behind your potential new home is going to be turned into a factory, or that a highway will be running behind your property line can have a significant impact on your future resale.
Your Realtor should have a thorough understanding of what the purchase contract that you're signing means, and be able to explain the relevant parts to you in plain English. Many Builders contracts look like a small, local area telephone directory. The Builder had professional representation writing up your contract, shouldn't you have a professional helping you understand it? Often times the Builder's contracts are not negotiable and can not be changed by your Realtor, but understanding the ins and outs of what the paperwork says, especially in terms of completion dates, escrow money due, and what happens if one party or the other fails to perform, may mean the difference between going forward with the purchase and walking away.
Financing from the Builder, or their preferred lender, is often wrapped up in attractive package giving you closing discounts for using them. Your Realtor will be able to help you determine if there may be a better financing option for you, possibly going with an outside lender.
Your Realtor should recommend that you have a professional home inspection done during several points of the building process if possible, or if the home has already been completed, then the inspection should be done before the closing date.
When it's time to choose which options you'll want to put into your new home, your Realtor can provide valuable insights into which options can have the most impact in terms of getting the best appreciation on your investment. They can also consult with you about which options you may want to avoid, or do at a later date with a separate contractor versus using the Builder.
As the closing date draws near your Realtor will be there as you do the final walk-thru of your home, helping you to make sure that any issues that need to be addressed are done before closing. Then when your final settlement statement has been prepared, the "Hud-1," your Realtor will go over it with you to be certain that there haven't been any clerical errors in the preparation of the documents and that you have been credited and charged the proper amounts.
Finally at the closing table your Realtor will be there to represent you through the final steps of signing all the documents required to close the transaction, at which point you'll take possession of your new home. When done correctly it's a seamless process that looks as easy as an ESPN double back flip. If things go wrong, you'll have professional representation working in your best interests to guide you through the challenges that may arise.
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