Why do you want a Realtor when building a new home? I’ll tell you five reasons!
3-Pros and Cons
The builder’s agent works for the builder and your agent works for you. The builder’s agent will get their next 20 transactions- basically their entire year’s work- from the builder, so if issues happen, they will try to help the builder.
There are a lot of moving parts when it comes to building a new home. You’ve got the builders themselves, the agent, the design center, sub-contractors, the city….. Between all of those cogs, something WILL go wrong. It is almost inevitable. And when that happens, you will want and NEED a Realtor on your side to make sure that you’re taken care of.
Pros and Cons
Each builder has different processes. They each have their own reputation in the industry. Some function as franchises, where a builder buys the name and markets themselves under that name. Some builders have been around for a long time and are known for not honoring their contracts. Your agent will know the reputation for your chosen builder and can help prepare you and protect you, if necessary, during the building process.
Recently, I was with a client at the design center for their new home. Their agent began selling upgrades, saying ‘this will add value’, when many times, the upgrades actually didn’t add the value that they cost. By the end of that particular meeting, the builder’s agent had begun asking ME which upgrades added to the resale value of the home.
This isn’t surprising, as the builder’s agents work on new construction homes almost exclusively and aren’t familiar with resale values. For example, spending $50,000 on upgrades in the kitchen will not add $50,000 to the price of that home if you were to sell it two years later.
Most builder contracts are VERY builder friendly and NOT buyer friendly. There are some builder contracts out there in which your earnest money goes hard IMMEDIATELY, meaning that as soon as you have gone under contract on the home, even if you decide to back out the next day, you will NOT see any of your earnest money again!
If a builder’s agent offers you a ‘discount’ so that you won’t use your own Realtor and representation, who do you think wins? The agent themselves makes the same amount of money, BUT there is no-one there to fight for your best interest and keep them accountable…
Don’t sell (or buy!) yourself short when building a new home- have a competent Realtor on YOUR side to make sure YOUR interests are protected!