When done correctly, it is one of the most difficult transactions Realtors handle.
First – let’s address the “elephant in the room”: Do homebuilders pass on commission savings to buyers who don’t use a buyer agent? Contrary to popular belief, homebuyers in general do not get a discount on price by working directly with a builder. If a builder discounts home prices, it can affect home values of buyers who recently purchased causing concern for current homebuyers in the market. More importantly for builders, it also cuts into their future profits because all future buyers will want that same discount. In Florida, sales prices are reflected in public record and in the MLS. Builders would essentially be shooting themselves in the foot. The reality is that builders will use commission savings to fund future marketing (because buyer agent commissions typically come out of a builder’s marketing budget) or they will pay a slightly higher commission to their builder rep. (the real estate agent who works directly for the builder and represents only the builder’s best interests). Since there is no financial incentive to work directly with the builder’s rep., it is recommended that buyers hire a buyer agent/Realtor who will look out for their best interests.
Our brokerage has assisted numerous new construction homebuyers over the past 10 years, and my team agrees—when done properly, new construction deals are at least twice as difficult as resale/existing home purchases. Going it alone (without a Realtor) or working with an uninvolved or inexperienced Realtor can cause stress and steal joy from what should be an exciting time in your life. And chances are, a homebuyer will never know the level of service they should have received from that buyer agent. We have rescued several homebuyers who have had bad experiences.
So how do you find a great buyer agent who will look out for your best interests and what should a homebuyer expect as far as service? Let us help you establish some standards.
- Every Builder’s Incentives are Different – Experienced Realtors who work regularly with new construction know the incentives each builder is offering, which helps their clients make the most informed decision – and get the best deal (e.g. “This builder is offering $10,000 in closing costs… why are you only offering $7,500?”). They also know which incentives (e.g. Closing costs, design options, lender credits, etc.) are best to ask for, depending on the builder, to maximize savings for their client. In addition, if an agent is a top-performer, builders want future business from them and it can provide an added advantage to their clients when negotiating.
- Selection of Finishes – This can be a daunting task. We actually attend the design center appt. with you to to help you prioritize what upgrades to do now versus post-construction which could save you tens of thousands of dollars. We also guide you on what selections may be better for resale in the event that you need to move in the future (e.g. Job transfer, expanding family).
- Contrary to Popular Belief, New Construction is NOT Perfect – No one is perfect. Builders make mistakes, too. For many reasons, we highly recommend hiring a new construction inspector (different than a standard home inspector). We will help you work with the builder to resolve any issues prior to closing, which can be a challenging and time-consuming process. We are the squeaky wheel that gets the grease. We’ve done this for many clients and achieved successful outcomes.
- Completion Dates… Oh Boy… – Builders provide an approximate completion date, but there’s always fine print that comes with that date. How do you manage this? We will help you navigate this challenge, based on your unique situation. We also regularly track construction progress and keep you updated, which saves you time and stress.
- Builder Education Appt. & Final Walk-Through Appt. – Sometimes done together, sometimes separate. We attend both and make sure your punch list gets done. And – if you have post-closing issues and warranty items and you are not getting response from the builder, we encourage you to call us so we can help. We are there for you – even after you close on your home purchase.
As you can see, there are many hurdles involved in new construction. What should your first step be? To sum it up, work with an experienced agent. It will make all the difference in the world.
DON’T GO IT ALONE IN NEW CONSTRUCTION!
