What Buyers Need to Know About New Home Builders in Metro Denver

Real Estate Agent with The Berkshire Group Realtors

What Buyers Need to Know Before They Visit a Builder's Model
100 Real Estate Tips in 100 Days (Day 10)

We love builders. We really do. Without the home builder, there would be no homes to sell, since every home was once brand new. However, there are a few things the buyer should know about buying that brand new home:

  • Almost all builders in Metro Denver "coop" with the Realtor community. That means that the REALTORS® commission in a new home sale is paid by the builder. Why? Because REALTORS® bring 60% of the buyers to the builders product.
  • As a buyer you should always be represented by your own agent when you visit or buy in a new home community. As knowledgeable and pleasant as the onsite sales person is, you should remember that the onsite person works for the builder. In effect, the onsite salesperson is the builders "agent", and cannot be your agent.
  • The job of your agent is to find you the best house at the best price and terms for you. Your agent is not beholden to any particular builder. The onsite builder's agent's job is to sell you their employer's product.
  • Licensed real estate agents in Colorado all use the state mandated contract form. The form is designed to provide certain protections for the consumer. Builders have their own individual contracts, designed to protect the builder.
  • Most REALTORS® have experience in transacting business with most builders, and have experience in negotiating in their client's behalf.
  • There are many factors involved in buying a new home that is different than buying a resale, such as product due diligence, and the builder is not required to protect the consumer beyond those issues required by law.
  • Builder warranties are implied, but not expressed unless there is a specific written warranty provided by the builder.

The fact is, buying a new home is as complicated as buying an existing home, and most consumers are well served by having experienced representation.


Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Mike Hendren 03/25/2009 01:17 AM
Home Buying
Colorado Denver County

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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

KK - This is a great series. Buyers absolutely need to know about the potential risks of buying a home with a builder without represention. Some are much better than others, in my experience, and buyers often don;t realize they CAN have a buyer agent assist them.


Mar 24, 2009 04:24 PM #1
William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Kristal, Superb writing and once again you nailed it. The consumer just doesn't usually think in terms of having their REALTOR help them with new homes as much as they should. There really should be little difference to them with the new home than any type of home. The builder's business model ( including the models they set up) are to attract the consumer directly. If they better understood the benefits to the consumer for an arms' length transaction , they would come to appreciate the excellent help we could be to them and that is way beyond any type of co-op being offered. We support their industry politically and help them in that regard as well but REALTORS are not always seen in the same light. Our industries do well when we work together in the community , the state and nationally. If only that mind set would be there, many more REALTORS would do better in representing all the inventory which should naturally include New Homes. Your insight into this from the consumer benefit is totally wonderful. Well done, this should be a featured post.

Mar 24, 2009 04:32 PM #2
Mike Hendren
Mike Hendren Photography - Cloudcroft, NM

Excellent info, Kristal.  Thanks.

This is something that all buyers and most REALTORs® need to review before going to look at new homes and working with builders.

Your series continues to provide valuable information to us all.


Mar 25, 2009 01:22 AM #3
Sabrina Kelley
ERA Herman Group Real Estate - Woodland Park, CO
Woodland Park Colorado Mountain Homes and Land

Great insight as always. Your blog is becoming one of my favorites.

Mar 25, 2009 10:18 AM #4
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Kristal Kraft

Selling Metro Denver Real Estate - 303-589-2022
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