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.