The only way to truly provide peace of mind to the buyer is for the buyer to have full representation from their own REALTOR.
Many buyers wonder if it is a good idea to hire a REALTOR when purchasing new construction. Some buyers believe that they will get a better deal without an agent (saving the 3% commission the agent would be paid and using it as a discount on the price of the home). Builders want strong relationships with agents. By offering discounts or incentives to the buyers if they don't use an agent, the builder hurt their most important referral source - agents! Therefore, with large builders it is highly unlikely they will offer any incentives for not using agents. Many times they will encourage buyers to hire a buyer's agent. Why you ask? Well, the builder's sales representative works for the builder and they have the builder's best interest at heart, not the buyer's. But they want to have a smooth transaction and good builders know that the best way to ensure a smooth transaction is for the buyer to feel like their best interest is being taken into consideration. The only way to truly provide that security is for the buyer to have full representation from their own Realtor.
We have had buyers call me after finding a new construction home they want to purchase and tell me, "the sales representative told me to call you so that I can have full representation, can you help me in the negotiations to purchase this home". Immediately in this situation some buyers wonder "does this agent deserve to get paid, I mean they didn't find the house or show any homes to the buyer". Actually, the hardest part of an agent's job is from the point you enter into contract to the close of the sale and coordinating everything in between. A good agent is going to do the following to assure the buying process goes smoothly:
They are going to negotiate the best price for the home. As agents we work with new construction quite a bit and have a sense of how much "room" the builder has on the price they are offering. A buyer, off the street, can try to negotiate, but will have a more difficult time without the leverage of knowing what that particular builder has done in the past.
A good agent will encourage a new construction buyer to get an inspection on the home and even multiple inspections, depending on the stage of the home being built. Builders do get their own inspections done throughout the building process, but it is very important that the buyer have their own inspections done as well. There have been cases where our buyers have hired an inspector and the inspector has found very little to write-up on their report. This is ideal and gives the buyer the added comfort of knowing their house is sound. In the same regard, many times the inspectors do find items that are code or safety issues, that the builder's inspector did not find. The builder is typically more than willing to have the items fixed prior to close.
Another job the agent has is to help you select a lender. Our team encourages our buyers to talk with at least two different lenders and get Good Faith Estimates (GFE's) from each. The Good Faith Estimate will break down the lenders fees and will show the borrower/buyer what to expect in the way of monthly mortgage cost and closing fees. It is easy to be deceived when comparing GFE's since lenders will use different numbers when estimating insurance, taxes and closing dates and so it becomes imperative that your agent takes a look at the GFE's and guides you in deciphering which lender is actually offering the best deal.
Finally, our job as our buyer's agent is to coordinate all parties: the builder, the title company, the lender, the inspector and you, as the buyer, to assure that home closes on time and that any issues that arise are addressed and taken care of. It is a big job and one that, if taken off the shoulders of a buyer that is not use to doing this job on a daily basis, makes their life a lot less stressful.
Building a home is a stressful process and by hiring a good agent that has worked with several new construction builders you will find that even if the builder does offer a discount for not using an agent it will be well worth your money to have full representation.
If you've been thinking about buying or selling, or if you know of any family, friends or neighbors who are looking for real estate professionals, call The Corekin Team at 713-503-5453 or visit us on the web at www.corekinteam.com.
Subscribe to CommentsComment