Do you need a real estate agent when buying a new construction?

Imagine the thrill of stepping into a brand-new home: everything is fresh, modern, and exactly your style. New construction homes offer a unique appeal with their modern features, energy efficiency, and the peace of mind that comes with a warranty. But when it comes to navigating the buying process for a new build, a question often arises: Do you need a new construction Realtor?

While you can certainly navigate the process directly with the builder, having a dedicated new construction Realtor on your side can come with significant advantages. Let’s explore the role of a new construction buyer’s agent and how their expertise can help you secure your dream home.

Can you buy new construction without a Realtor?

First things first: do you even need a real estate agent when building a brand-new home? No, but that doesn’t mean having one isn’t valuable. 

It's absolutely possible to buy a new construction home without the involvement of a Realtor. In this scenario, you'd interact directly with the builder's on-site sales representative. These representatives are readily available at new construction communities and are knowledgeable about the available floor plans, pricing, and any current promotions the builder might be offering.

Now, there are some potential drawbacks to consider when going solo. The on-site sales representative naturally represents the builder's interests, and their primary goal is to sell you a house at the highest possible price with the most upgrades. Without your own Realtor to advocate for you, you might miss out on valuable negotiation opportunities, or lack the market knowledge to identify potential issues with the location or specific features of the home.

Key takeaway: the on-site sales representative can be a valuable resource for information, but it's crucial to remember their loyalty lies with the builder, not the buyer.

At the end of the day, unless you’re extremely familiar with new construction real estate, it might behoove you to work with an agent who has the expertise to advocate for you. 

The benefits of using a new construction buyer’s agent

While the builder has their representative on site (the builder's agent) having your own Realtor — specifically a new construction buyer's agent — can significantly benefit you throughout the new construction purchase process. Here's what a real estate agent does and how they can become your champion:

• Negotiation abilities. An experienced buyer's agent knows the ins and outs of new construction negotiations. They can help you negotiate the purchase price, secure upgrades at a better price, or potentially even negotiate additional builder incentives (like closing cost credits).
• Contractual expertise. New construction contracts can be complex. Your buyer's agent can review the contract thoroughly, identify any potential issues, and ensure your interests are protected. They can also explain the intricacies of the document in a way that's easy to understand.
• Navigating the options. New construction communities often offer a variety of floor plans and customization options. Your buyer's agent can guide you through these choices, helping you select the one that best suits your needs and budget. They can also offer valuable insights based on their market knowledge and experience.
• Cost savings potential. While the builder typically covers the commission for both the buyer's and seller's agent (on-site sales representative), a skilled buyer's agent can potentially save you money through expert negotiation of the price and upgrades.

In essence, a buyer's agent is your trusted advisor throughout the new construction buying journey. They ensure you have the information and leverage you need to make informed decisions about the new construction home you’re buying. 

Finding your new construction Realtor

For prospective homeowners, buying new construction vs. an already established home is a big difference. The good news is that most Realtors can handle both existing home sales and new construction transactions—you won’t need to look far to find a buyer’s agent. 

Here's how to find the right Realtor for your new construction purchase:

• Leverage existing relationships. If you have a Realtor you trust or someone who has helped you buy or sell a home in the past, ask if they have experience with new construction. A preexisting relationship can be a valuable asset!
• Experience matters. While most agents can handle the basics, some specialize in new construction. Look for a Realtor who has experience negotiating with builders, understanding builder contracts specific to new construction, and staying updated on current trends and incentives offered by builders in your area.
• Online resources. Use online platforms like the National Association of Realtors (NAR) or review sites to find Realtors with experience in new construction in your desired location. Also, look to see if any nearby agents have experience with the particular builder or building group you’re interested in working with. 

Remember, a consultation with a Realtor is typically free. You’re under no obligation to work with that person until you sign a buyer’s agent agreement. Don't hesitate to interview several Realtors to find someone you feel comfortable with and who demonstrates a strong understanding of the new construction market.

Who pays the Realtor commission on new construction?

A common concern for potential buyers is who foots the bill for real estate commissions on new construction homes. The answer is simple: typically, the builder covers the commission for both the buyer's agent and their on-site sales representative.

Builders factor the cost of Realtor commissions into their overall pricing structure. This means utilizing a buyer's agent won't result in any additional out-of-pocket expense for you. In fact, as mentioned earlier, a skilled buyer's agent can potentially save you money through negotiation, making their service even more valuable.

So, when it comes to Realtor commission on new construction, you can rest assured that having your own advocate on your side won't break the bank.

Are there any drawbacks to using a new construction Realtor?

Generally speaking, there’s not a lot of downside to working with a real estate agent to facilitate a new construction home sale. There are, however, a couple of important considerations to make sure you’re getting the value you should expect from one.

First, rapport matters. In some cases, a new construction Realtor might not have a long history working with a specific builder, potentially limiting their knowledge of that builder's particular contracts or negotiation strategies. Look for an agent that has experience and working familiarity with your builder of choice. 

Additionally, if you have a very specific vision for extensive customizations outside of the builder's standard options, a Realtor might not be able to significantly influence those aspects of the project. That said, by openly communicating your needs and preferences with your Realtor upfront, they can effectively represent you throughout the new construction process.

What happens if you don't use a new build Realtor?

Let’s say you decide to approach buying a new home by yourself without a realtor. What does that scenario look like?

Firstly, you might miss out on negotiation opportunities. An experienced buyer's agent knows how to leverage their expertise to potentially secure a better price, upgrades at a discount, or additional builder incentives. Without your own Realtor to explain the legalese and identify potential concerns, you might also unknowingly agree to terms that aren't in your best interest. 

Relying solely on the builder's information can also limit your perspective. Remember: it’s in their best interest to sell you a home at the highest price. A buyer's agent can offer valuable insights based on market knowledge and experience, helping you make informed decisions about floor plans, customizations, and the overall value of the property.

While it’s not impossible to buy a new construction home by yourself, it’s certainly a precarious situation for many buyers. More often than not, a new construction Realtor is an asset. 

Put your new home sale in the hands of an expert

The decision to involve a Realtor in your new construction purchase ultimately depends on your priorities. While navigating the process directly with the builder is an option, the benefits of having a buyer's agent on your side are undeniable. With the right guidance and representation, you can step into your brand-new dream home feeling confident and informed.

FAQs

Here are more details about real estate agents for new constructions.

Can I use the builder’s agent for a new construction?

The builder’s agent is the person hired by the builder to sell any available homes 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 a buyer's perspective, the builder's agent can be helpful when it comes to discussing important factors like the construction process, the floorplan, and availability of any particular amenities or upgrades. In general, these sales agents are knowledgeable about what their builder can offer each buyer and how the process works with that particular company. 

However, they are the builder’s agent, and not yours, so it makes sense for you to have your own realtor by your side to navigate the homebuying process. (If you're looking for new construction homes, our team of experienced local agents at Orchard can help.)

Should I tell the home builder I have an 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 real estate knowledge and expertise on your side.

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 (dual 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 preferences and what you're looking for in a new home.

People who are selling and buying a home, including a new construction, can benefit from working with Orchard. We can guarantee your home sale, so you can buy the new build without any contingencies holding you back and align your moving schedules. Get started here.

What if I've already started working with the builder's sales representative? Can I still bring in a real estate agent?

Yes, you can still involve a real estate agent even if you've already interacted with the builder's sales representative. Let your agent know about your previous interactions so they can step in and provide representation for the rest of the process.