Two important questions buyers ask new construction home builders…

During my time working for a national home builder, I heard these two questions countless times: “Do I need a Realtor to buy new construction?” and “If I don’t use a Realtor, will the builder give me a discount?” These are two great questions.

Let’s take a look at  the typical builder response to these questions and what you as the buyer should know.

Do I need a Realtor to buy new construction?

Typical Builder Representative Answer: “We work with Realtors, but you don’t HAVE to have one. In fact, we take care of everything for you, including paperwork.  We will be happy to lead you through the process.”

What you as the buyer should know: The onsite builder sales representative works for the seller, therefore, their fiduciary duty is to the seller. What does that mean? It means that their main priority is to protect the best interest and monetary stake of the builder, not the buyer. A REALTOR working as your Buyer’s Agent has a fiduciary duty to YOU, the buyer. That means their main priority is to protect your best interest and your monetary stake in your home purchase.  Most builders have their own contract paperwork and forms, which is why it is so important to have your own licensed professional REALTOR to represent you during the transaction. Your REALTOR can help you understand what you are signing and work on your behalf during the process. Read this quick REALTOR.COM article for more details on how your Realtor will work for you during the construction process.

If I don’t use a Realtor, will the builder give me a discount in the amount of commission they would have paid an agent?

Typical Builder Representative Answer: “No, we will not discount the price of the home in the amount we would have paid a Real Estate Agent.”

What you as the buyer should know: While the commission builders pay to agents comes out of their bottom line, builders understand that is part of the cost of doing business with a wide network of real estate professionals. In fact, builders factor that cost into their prices ahead of time. Discounting a home for buyers who choose not to utilize an agent would quickly become seen in the real estate community as an incentive for buyers to proceed without representation. This would then alienate the Real Estate community. Most builders are not willing to take that risk, and will not discount the home if a buyer chooses to move forward without a REALTOR. To recap, if you don’t use a REALTOR, your price will not go down. Instead the builder’s profit will go up because they aren’t paying a commission they had originally planned on paying.

Ok – so let’s try this again.

Question: Should you have a REALTOR when buying a new construction home?

Answer:  YES! The builder pays the commission, so having your own REALTOR representation doesn’t cost you any money. More importantly, having a REALTOR acting as your Buyer’s Agent will protect your interests throughout the real estate transaction.

Thinking about buying a new construction home? I’m an expert. Contact me, and I’ll help you through the process.