Do You Need a Real Estate Agent When Buying New Construction?

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Buying new construction — when you purchase a newly built home, or the land on which to build a new home — is appealing to many. In one key area, however, it leaves homebuyers confused. If you’re wondering whether you need a real estate agent when buying a new construction home, the answer is generally yes. Going without an agent won’t mean a discount, and you won’t have anyone looking out for your interests.

Keep reading to have a better understanding of why you should get your own representation, and why you shouldn't rely on the real estate agent for the home builder.

Why hire a real estate agent when buying a new build?

When shopping for a new build, it’s extremely helpful to hire your own real estate agent. 

Understandably, this might not be obvious. New construction seems straightforward: The house is being built, and you can buy it. What is there for an agent or Realtor to do? Or maybe I’ll use the real estate agent of the home builder — can’t they help me out? 

As it turns out, there is a lot that a real estate agent can do for you when you build a new home. 

1) They'll advocate for you

Your real estate agent is there to advocate in your best interest. While a builder's agent would be more than happy to help you do the paperwork on a home purchase, they ultimately work for the builder. Their fiduciary responsibilities to the builder and the builder is the one signing their paychecks. With that in mind, they're going to have the builder's best interest in mind.

When you hire a real estate agent to help you through the transaction, you know that you will also have someone advocating for you during the transaction. You'll have someone there to make sure that you get what you need out of the deal.

2) They can assist with negotiations

A buyer's agent — the real estate agent representing your interests as the buyer — can also help you with contract negotiations. When you use the builder's standard contract, the vast majority of the clauses included are going to be worded to the builder's benefit.

A great real estate agent can help you negotiate on your behalf and make sure that your money is also protected by the contract.  Plus, if there are any issues during the transaction, they can negotiate on your behalf when problems crop up.

3) They help you find the right builder

Not all builders are the same. Every builder has their style, both in terms of construction aesthetics and communication during the new construction process. To make sure you’re satisfied, you’ll need to find a builder whose style and work preferences match your own.

It can be hard to know where to start when trying to find a builder. Since your agent will have experience in the industry, they can help you through the selection process. They will likely be able to suggest available builders, and they should also be able to help you come up with good questions to ask when you interview potential candidates.

4) They'll remind you about resale value

When you're building a new home, it can be all too easy to get caught up in creating your perfect dream home. When viewed separately, each upgrade may not seem to cost very much. Yet when added together, it’s easy to over-improve your property.

With that in mind, a real estate agent can help keep you on track by reminding you of your new home's potential resale value. Since they know the area and the appreciation that has taken place over the last few years, they can give you a good idea of whether or not you are on track to get your money out of your investment. And remember, this is an investment, not just a place to live. 

How much does it cost to use an agent?

As the buyer, you should not have to pay anything to use a real estate agent. In a real estate transaction, the seller is responsible for paying the agent commission, which usually amounts to 6% of the purchase price. In a new construction scenario, the builder is the one who will foot the bill. Most builders view paying a buyer's agent fee as a cost of doing business.

This is important to keep in mind: The builder, in nearly all cases, will not give you a discount for going without an agent. That’s because the fee to an agent comes from a marketing budget, rather than the construction budget, to prevent the commission from impacting their gross margin for home production.

With that in mind, there’s no reason not to use an agent. From your perspective, it won't be any cheaper if you forgo one, which makes choosing someone who can advocate for you a no-brainer.

What does a builder’s agent do when you buy new construction?

You may have heard of a builder’s agent. This is the real estate agent that the builder has hired to help them sell any available homes that they have just built and to negotiate each contract in their favor.

When you're buying new construction, the builder takes the place of the seller in the transaction and the builder's agent takes the place of the listing agent. 

From the buyer's perspective, the builder's agent can be helpful when it comes time to discuss important factors like the construction process or the availability of any particular amenities or upgrades. In general, these agents are very knowledgeable about what their builder can offer each buyer and how the new construction process works with that particular company. That being said, as mentioned above, they are the builder’s agent, not yours. 

Should you tell your home builder about your agent?

Too many buyers worry about finding the appropriate time to tell the builder that they are working with a real estate agent. This doesn’t need to be a well-kept secret. The earlier that you are upfront about the fact that you are working with an agent, the better for all parties involved.

The sooner the builder's agent knows that you have representation, the sooner they will work them into the transaction. For example, they will know to negotiate with your agent, rather than you, giving you the advantage of having someone with industry knowledge on your side.

What if I still have to sell my home? Should I use the same agent?

If you have to sell your home before you can afford your new build, it makes sense to use the same real estate agent. Doing so makes it easier for you since you won't have to go searching for new representation, and the agent will also have a better idea of your sense of style and what you're looking for in a new home.

When you want certainty that your home will sell and fewer overlapping costs, consider Orchard's Move First service. it provides clients with a seamless path to sell their current home and get into the new-build of their dreams.

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