BY: PATTY JOHNSON
I’m often asked, “Should I use a Realtor if I’m buying new construction from a builder”. The short answer is yes and here are the main reasons why.
Representation – The real estate representative in the builder’s sales office represents the builder’s best interest not yours. An independent real estate agent represents your interests and advocates on your behalf. Additionally, a real estate agent will help you get the most value for the least amount of money and make the real estate transaction easy and frustration free.
What you See is not What you Get – You tour the model and it looks great. The problem is the model isn’t the base price of $350,000 being advertised, it’s $450,000 because of all the upgrades. Top tier granite countertops, crown molding, upgraded appliances, built-in bookshelves and trey ceilings are usually upgrades and they add up. And, that price may not include the lot price! A realtor representing your interests will help make sure you’re aware of what’s included in the base price and what’s extra. Then they will send you to the “Design Center” Those beautiful lights in the bathroom, probably an upgrade.
Agent Fees – Buyers do not pay the real estate agent fees, the seller or builder does. Builders view commissions to real estate agents as part of their cost of doing business. In fact, they rely on outside agents to bring clients to them. Builders will not credit buyers the commission they would otherwise pay to a Realtor. If they were to do so, realtors would no longer bring clients through the builder’s doors and ultimately it would impact their future sales. Therefore, there is no downside and no cost on your end to have an outside agent represent you.
Negotiations – You may be a great negotiator. Even good negotiators have told me they are more effective when they negotiate for other people than they are when they negotiate for themselves because they don’t have an emotional connection to what they’re buying. An agent will look at the transaction from a dollars and sense perspective without being swayed by emotions. A good Realtor will also know what is and what is not negotiable and as you can imagine it varies by builder. For example, did you know many builders will cover some closing costs? Include a warranty? Include free upgrades? Builders are far more likely to negotiate on fees or upgrades than they are on price. An experienced agent will help guide you through negotiations and ensure you are getting the most for your money. As your agent I will ensure all the terms agreed upon are included in the contract.
Inspections – You may want to consider a home inspection when buying new construction. A builder doesn’t necessarily want to inspect itself and if they did would you trust they have your best interest in mind? Oftentimes, homeowners think a new home warranty will cover any issues that arise. In certain instances, it does not. A good real estate agent will have relationships with multiple independent inspectors who will look out for your best interest. An excellent realtor will even help the homeowners set the appointment with the inspector and review the inspector’s report to identify potential areas of negotiation, corrections, repairs or replacements with the builder.
Financing – When you are buying new construction, the builder usually offers financing with their preferred lender. But is it the best financing available? Even a small increase in the interest rate could have a significant impact on your monthly payment or the total amount you pay for the home with closing costs. As your experienced real estate agent, we will be able to connect you with our in house lending and you can compare rates. Remember, nothing is free.
Contract – How familiar are you with a real estate contract? Do you know what to look for to make sure you are receiving all the benefits you’re supposed to receive? Are you aware of any hidden fees or community fees? A real estate agent is an expert in the industry who is there to provide guidance throughout a real estate transaction. We review real estate contracts regularly and know what to look for to ensure everything is correct and answer questions pertaining to the contract.
Quality of Construction – How familiar are you with the builder? What’s their reputation? What is the quality of their construction? There are hundreds of builders in Colorado. Some National and some Local. There’s a good chance we already have a working relationship with the builder and community for which you are interested.
Are you thinking of buying new construction? Don’t go it alone, let me help you.