Many people buy new construction and don’t think about using a REALTOR® to represent them. Builders employ sales agents who are so helpful when it comes to discussing everything the builder has to offer, including lot availability, floorplans, the construction process, upgrade options, and more. These sales agents are so knowledgeable and typically so helpful, it’s no wonder buyers don’t always think to have an agent represent them.
The builder’s sales agent works for the builder not you.
While most of the sales agents we’ve worked with have been great, at the end of the day, they work for the builder, not you. Their job is to protect the interests of the builder. When making such a huge purchase, it’s smart to have someone in your corner, who’s only job is to look out for your best interest. An Origen Realty agent can help you negotiate the best deal, make sure everything discussed is included in your contract, negotiate extra incentives, and advocate on your behalf if things go wrong. Depending on current market conditions, the stage of construction the home is in, and more, the builder may be more or less inclined to negotiate. A knowledgeable Origen Realty agent can help you analyze these factors and determine how much wiggle room there may be.
A Cautionary Tale
In a perfect world, everything will go smoothly with your new build… from the contract, to construction, to financing, and all the way to move-in day. But when the worst happens, that’s the precise moment you NEED an Origen Realty agent on your side.
Some time back, we got a call from a buyer who was not our client, but seeking advice. The buyer met with a builder and discussed that they would need to sell their home first in order to close on the new construction home. They agreed to make the transaction contingent on the sale of their home. The builder prepared the contract and the buyer signed. Later, when that buyer was unable to sell their home, they learned that the contingency they discussed was NOT included in the contract. The contingency would have given them the ability to terminate their contract and get their earnest money deposit back.
Another example is a buyer who was given an estimated completion date of some time in September. The home was completed early, in July. The builder scheduled closing, and the buyer was not yet prepared. No one had explained to them when they signed the contract, that they were obligated to close on the builder’s timetable, and that the date they originally discussed was not a fixed date.
Another buyer chose a multitude of design upgrades and paid upfront deposits of five figures for them. When the home was complete and ready for closing, the lender ordered an appraisal. The upgrades added significantly to the sales price, but did not add to the appraised value of the home. No one explained to the buyer that they should keep the potential appraisal value in mind when choosing upgrades. They also were not made aware that the contract obligated them to pay the difference in the appraised value and the sales price in cash. They were on the hook for the difference.
In short, sales agents who work on behalf of builders are not usually bad actors. We’ve been lucky enough to work with some of the best. But not all sales agents are created equal. And sometimes, mistakes happen. Details are overlooked. Having an Origen Realty agent working solely in your best interest can certainly help to avoid a disastrous situation.
Will your home cost less if you don’t have a REALTOR® represent you?
No. Builder’s include paying real estate commissions as the cost of doing business. Builders generally will never give you a discount for NOT working with an agent. The commission fees builders pay to agents generally come from their marketing budget. If you do don’t have an agent, the builder keeps the amount they would have paid the agent as additional profit.
To be or not to be… represented?
There is every reason to be represented by an Origen Realty agent when purchasing new construction. Our job is to help navigate the process and avoid these pitfalls. If you’re interested in purchasing, and want an agent on your side, give us a call at 281.691.6177, or send an email to info(at)origenrealty(dotted)com. Check out new construction listings here.