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Should You Consult a Realtor When Purchasing New Construction?

Real Estate Agent with Front Gate Real Estate Broker 11085

Should You Consult a Realtor When Purchasing New Construction?


Most buyers wouldn't hesitate to consult a Realtor when buying an existing home. They recognize the value of working with a buyer's representative who knows the market and is familiar with financing options; someone who can provide advice on market trends; who can interpret contracts and warranties; and who offers fiduciary duties of loyalty, confidentiality, obedience, disclosure and full accounting, along with the duty of using skill, care, and diligence.


But when buyers consider NEW construction, often times they don't consult a Realtor. They may spend their weekends touring Open Houses and when they find "the one", the builder prepares the paperwork, and the buyer may execute an agreement without representation or advice.


Most builders are ethical; that is NOT the intent of this post. But builders are in business to sell their product. They are not in the business of showing all available properties, or looking out for the buyers interests. A builder does not owe fiduciary duties to a buyer.


Buyers should have representation to be assured the best possible outcome, to know that all forms, disclosures, warranties, and inspections have been properly executed and fulfilled, and to have an ADVOCATE who is looking out for his best interests.


Buyers may not consult a Realtor if they believe they are saving "the commission". But that expense has already been factored into the price of the home. So, if a Realtor is not involved with the transaction, that money will go into the builder's pocket.


Think about that for a minute...


Not using a buyer's rep is like THROWING MONEY AWAY. 


When represented by a buyer's agent, and especially an Accredited Buyer's Representative (ABR), buying a new home can be a gratifying experience. 


The attached handout is provided by the Real Estate Buyer's Agent Council (REBAC). Anyone interested in buying a new home will find it helpful.


Why a Buyer's Rep Provides a Better New Home Buying Experience.


Photo compliments of www.flickr.com


Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Michelle M. Arnold - your buyers were fortunate you caught that "oversight" and could refer back to your photo. That's one reason I always keep a print-out of MLS information at the time I write an offer, because agents sometime make changes after the fact, like rescinding bonuses, changing commission rates, deleting items that should be included with the property. This way my buyer & I are protected. Great save on your part!

Jul 15, 2015 03:04 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

John Hrisco & Associates - Thanks for your first sentence! You never know when you write a post whether it will convey your intentions or reach the proper audience. 

Laura Cerrano - you are correct; you want to select someone who is knowledgeable in that area AND trustworthy. 


Jul 15, 2015 03:10 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

James (Jim) Lawson, DBA - Absolutely agree with your comments, Jim. I have found that builders don't like to come off their list price because it hurts the comps, but there are other ways to negotiate. Thank you for taking the time to comment.

Marc Swartz, CPA, CA, Real Estate Broker - Many buyers do use an agent for pre-construction, but I've found many like to ride around on Sunday afternoons and look at new, pre-built homes sans Realtor.

Gita Bantwal - I agree with you, except I am working with a reputable builder who does honor a registered buyer. It is best if the Realtor goes with the buyer on the first visit.

Debbie Gartner - Of course I agree with you 100%! Thanks for stopping by.

Jul 15, 2015 03:19 AM
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

Pat, this is an excellent post and Buyer's absolutely need representation in all home purchases, especially new construction.

Jul 15, 2015 05:12 AM
Mandi Null
Friends & Neighbors Real Estate - Elkhart, IN

Standing ovation for a blog so well written Pat! This is easily understandable so that everyone gets the message. I really wish my husband and I had known about using an agent when we built our home 9 years ago. We went through some major difficulties and because we were only in our 20's, with no previous home buying experience, we had to fight way harder than we should have. Our home buying/building experience should have been much better. I always say to people now when I hear they are thinking of building, "get yourself an agent or you will regret it."  Thank you for the attachment as well!

Jul 15, 2015 06:11 AM
Lee Marlin
First United Realty of Georgia - Atlanta, GA
ATL Metro 404.384.2274 - Luxury/Divorce/ShortSales

I totally agree with you that buyers should involve a Buyer's Representative on a new construction purchase.  We recently worked with a couple on a new construction purchase with a reputable builder.  The couple found a desirable lot and plan that they really liked, but they wanted to have a number of special features added to the plan - enlarged kitchen with high end appliances, additional garage space for 3 cars, lengthening the rear deck, extra structural support for a larger granite island in the kitchen.  The modifications amounted to over one-quarter of the original plan price.  By negotiating additional discounts for the buyers we were able to obtain the home of their dreams and reduce the overall investment by $30,000.  Since this was a larger contract than any other the builder was building at the time, the builder gave this project top priority and delivered the finished home three weeks ahead of schedule – by the start of the upcoming school year.

Jul 15, 2015 06:30 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Thomas F. Scanlon - Tomo, apparently using a Realtor isn't on the buyer's radar, but the consensus here is that it SHOULD be! Thank you for commenting.

Sham Reddy - Thank you for stopping by. I like the "professional in your corner".

Kat Palmiotti - I agree wholeheartedly. Thank you!

Sharon Alters - Was the contract completely voided and all money returned, or did the buyer get a "deep discount" on the price of the house? Glad you were able to assist as I'm sure you made a big difference in the outcome. 

Andrew Mooers - I'm not sure I follow what you mean. It's true that every market is different, and there may be smaller rural markets where Realtor assistance is not the SOP. Is that what you mean? Thank you for stopping by.


Jul 15, 2015 07:40 AM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

A former seller called a few weeks ago to ask about buying a home near downtown. I suggested a new homesite. I also told her she cannot go there and talk to anybody unless I am with her because they won't let me represent her if I don't register her. Few days later she called to say she went over there, got preapproved by their lender and that the builder told her there is no "co-op offered" -- which she does not understand -- and would I please meet her? Wha? Too late for that.

Jul 15, 2015 07:51 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Joe Pryor - You nailed it. That was the primary reason I wanted to share this post. The builder wants to protect the comps, and the buyer needs an advocate. The price remains the same regardless.

Gloria Laughton Allston - Thanks for sharing that experience. I find it happens as you described it most of the time.

Richie Alan Naggar author of books on Life-Love-Intimacy-Purpose - So true! New does not mean perfect. Is there such a thing as "perfect"? Thanks for stopping by. I really appreciate it!

Evelyn Johnston - Thanks for taking the time to comment. My goal was to educate buyers on how important it is to have representation. I hope this post will help.



Jul 15, 2015 08:10 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Mandi Null - Your standing ovation comment MADE MY DAY! Thanks so much. I'm sorry you had such a tough time building without someone to represent you. It can be a very challenging time. You are the first person to mention the attachment, but I thought it would be helpful for Realtors to include in their Buyer packages. Thanks again!

Lee Marlin  - that's a wonderful testimonial for a Buyer's Rep! You could write your own post on the subject. It sounds like you struck a home run for your clients, and the builder really delivered a quality product. Congratulations! 

Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents - your story devastates me. I'm so sorry that happened; you explained everything to your prospect and in spite of that, she went to the site without you. That's one reason I wanted to put this message out to the public. I wanted to let buyers know they CAN HAVE representation and in most instances, the Realtor fees ARE included. If you KNEW she was going to make a visit, perhaps you could have registered her, but it sounds like that builder would not have been receptive. Again, bummer situation.

Jul 15, 2015 08:28 AM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Too bad that buyers often go directly to builders.  They simply don't understand that the seller has no duty to look out for the best interests of the buyer.

Jul 15, 2015 01:22 PM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Pat, the buyers received their full deposit and the contract was canceled. The builder never offered to discount the house, which I think would have been the only way they would have stayed in contract. At that point they had earned a discount because of all the builder shenanigans. I didn't mention it because they really wanted out - if I had thought it would have made a difference, that is exactly what I was going to do. 

Jul 15, 2015 01:25 PM
Bill Reddington
Re/max By The Sea - Destin, FL
Destin Florida Real Estate

Much better to have an agent. Also a home inspection or inspections done along the way. Builders are not perfect.

Jul 15, 2015 02:15 PM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Joan Whitebook - Most builders I believe are ethical, but I'd still want someone in my corner.

Sharon Alters - I'm glad this worked out for the buyer, and hope you retained them as clients. Sometimes Realtors get blamed for bad experiences, even when their are outside forces causing the problem. 


Jul 15, 2015 10:49 PM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Bill Reddington - YES! Inspections, even on new. No home is perfect.

Jul 15, 2015 10:51 PM
Rosemarie Heindel
Harry Norman Realtors - Big Canoe, GA
Rosemarie Heindel

I have represented several people in new home purchases.  Each of them resulted in getting more upgrades than the builder was offering, and I had an Inspector check out the home prior to closing. There were things found (that the builder did correct) that may have gone without correcting.

I hope to help more people in the future with new home purchases.

Have a blessed day!

Jul 15, 2015 11:29 PM
Teri Pacitto
Compass - Westlake Village, CA
Real Estate, Your Style...Your Home...My Specialty

Absolutely home buyers for any home should consult a real estate agent.  There are many aspects of buying a home and that includes new homes as well.  Most new home developments offer exceptional opportunities to buyers who work with an agent.  I personally keep up to date with those in my market area.  Buying a home includes knowing about all the new home home opportunities and often this is a result of a local real estate agent knowing how to negotiate on their behalf.  I've represented many new home buyers in my career and they were very happy with the results.  

Jul 16, 2015 03:44 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Rosemarie Heindel  - I also enjoy selling new construction homes and find it rewarding.

Teri Pacitto - Realtors need to know the inventory; that includes new and existing homes. You are smart to keep up with new home sales!

Jul 16, 2015 08:45 AM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Pat, yes, most definitely. They knew it wasn't on me. Our communications were open the whole time. We have written an offer on another house. 

Jul 16, 2015 01:00 PM
Michael McGuffie
Regal Classic Homes - Windermere, FL
Custom Home Building, Additions & Remodeling

Pat, before we build a custom home for a Client I make sure I have a Realtor look over the plans to insure future marketability. After all, one day that home is going on the market and that's not when the homeowner wants to find out there is a fatal design flaw. Better to find that out up front. A good Realtor can save the buyer $1,000's not cost them $1,000's

Sep 12, 2015 01:44 AM