Do I Need A Real Estate Agent If I Build New Construction?
YES, YES, YES!
New construction is plentiful in the metro area and you may be considering buying a newly built home. New construction has a ton of advantages, but many buyers make the false assumption that they can save money by not using their own Real Estate agent when purchasing a new home. This is a huge misconception!
Why buyers don’t think they need their own representation with a Real Estate agent…
Many buyers assume that the builder’s rep will help them with the purchase of their new home. They also assume that working with the internal representation will result in getting a better deal on their purchase.
However, the builder’s rep is working for the builder – not for you! Their success relies on getting the best deal for the builder, who is their employer. There legally can be no discounts passed on to you if you don’t use a Real Estate, there is no savings, in fact sometimes the opposite can occur.
But when you use a Real Estate agent, you are the employer.
You, the buyer, may not realize…
You may not know that the commission for buyer representation is legally part of the purchase price. If you are not using your own Real Estate agent, the builder simply receives an extra 3% from your purchase. Basically, it’s free for you to use a Mile High Real Estate agent. Free.
You also may not know that the builder is not required to have a licensed agent working for them, and many do not. When you hire your own Real Estate agent you will be hiring a licensed agent who represents you, not the builder and knows all the local laws related to Real Estate. Your Real Estate agent looks out for YOUR best interests. The Builders agent or rep looks out for the BUILDERS best interests. Sometimes the best interests are the same for the buyer and builder, but just as many times they are NOT.
What your Mile High Real Estate agent can do for you
Experience isn’t expensive. It’s priceless. Your agent, who understands the ins and outs of home purchasing, can work on your behalf to negotiate a better deal, free upgrades, or simply whatever is in your best interest. Most people wouldn’t consider buying an existing home without a Real Estate agent to represent them. Therefore, why consider going through the even more stressful and complicated process of building a home without someone on your side? In many cases, you are committing to something that doesn’t even exist yet.
It can be very daunting to go through the process of home-building, and dealing with the last minute changes and surprises. Buyers can avoid a lot of bad surprises with good representation of their own agent.
If you plan to use Mile High Real Estate agent to represent you…
And we sure hope you do!, be SURE to hand our card to the builder representative at the door of the model, and tell them, this is my agent. It is even better for your us to bring you through the door of the model to make it clear at the very start that you have us representing you. We can also call ahead and let them know you are coming to view the model homes. You can download a card to bring with you by clicking here.
“TO DO” List for Buying New Construction
Here’s a helpful list we’ve compiled – follow these “to dos” when working with a builder to have the best experience.
- Hire Mile High Real Estate
This is simply a must. Like we’ve said, we are working for YOU. Home-builders can try to monopolize or condition the sale. They may only give you special “incentive” packages if you agree to use all of their representatives: lender, title company, and even insurance company! But Mile High Real Estate can walk you through this process and make sure you are protected, as well as make sure you are getting the best deal. If you decide to use the builder’s lender, which many buyers do, we can make sure you get a good rate and fair closing costs. By bringing in your own agent, you’re asking your builder to be on their “best behavior.” Your builder doesn’t want to get a bad reputation, and will want the potential to create a good relationship with your agent, who will hopefully bring buyers their way in the future if the transaction is successful.
- Don’t sign anything until you’ve worked out every detail.
Your builder may try to capitalize on the emotionality of buying a new home. Once you’ve become attached to this new home, they may try to get you to write up the contract quickly so you don’t lose it. But you absolutely must know what is in the contract, understand it and agree with it. No matter what the builder tells you, IF IT IS NOT IN WRITING IT WILL NOT HAPPEN. Everything will be done as it is written in the contract, so it’s important that you understand it clearly.
Your agent can be a great player on your team when going through and trying to understand the builder’s contract. Mile High Real Estate has been involved in literally hundreds of new home transactions and we know how to walk the buyer through the process and explain the complicated building processes.
- Research the builder
Mile High Real Estate agents are experts on homes in the metro areas. This includes builders and their reputations. You want a builder that is not selling too many properties to investors – this can lead to creating a rental neighborhood and affects pride of ownership. Ideally, you also want your builder to be constructing homes of equal or greater value in your neighborhood to keep your property values high. However, this is difficult in some neighborhoods because the economy is difficult and people are affording and spending less on homes. We can help you sort this out and advise you on these items.
- Research city plans
New neighborhoods are often in newly developing areas. Therefore, you want to know what is likely to happen in the area you are about to commit to. This includes your city’s plans for roads, public spaces, parks, and schools. You want confidence that your neighborhood is going to become a good place to live as it develops.
The perfect source for this? Mile High Real Estate , who likely already has this kind of information available. This makes the job so much easier.
So, the first thing you did was hire Mile High Real Estate to work with you and your builder. You can call us at 303.217.8710 to set up an appointment or schedule your time to view a home. The next thing you should do is tell the builder you’ve got an agent when you walk in the office door “Hi, I’m working with The Mile High Real Estate Team”).
When touring the model home, ask the builder how much the home costs as you see it! Keep in mind that the model usually contains many upgrades and special features. You will want to understand the difference between the base model and the upgraded models. We can help you understand the difference, As your Realtor, we can advise you on what upgrades make sense and which ones are not worth the cost.
Also, considering upgrades, developers will often want cash upfront for upgrades you order for the house. They do not want to be held accountable for your extras if you decide to walk away from the sale. You should also expect that if you do walk away from the sale, you may not be refunded for these upgrades.
Consider resale, even if you don’t want to. It’s strange to think about reselling your home before it is even built, but you should at least consider it. If your development is old enough, look at the any current listings up for resale and see how the home looks “used”.
Get a copy of the blueprints of your home, along with floor plans and surveys (including room sizes). This will help you in the future if you want to make changes or sell. It’s easy to get them in the beginning, and it’s very important to have them!
As your home is being completed, check in! We recommend visiting every couple of weeks. If you are proactive, you can catch mistakes that might happen. Some developers limit access to the site, so you can stipulate this in your contract. We can also help you with this.
Do not close on your home until ALL work is finished. This is very important, and something on which your agent can look out for you. If any changes are substantial, have the funds set aside for them until they are complete. Once you close, it can be more difficult to have these things completed, especially if you have already paid for them. (Keep a record of this in writing, signed by buyer and seller!).
Know that your agent can look out for you in the event of delays or problems. There are things that happen beyond the builder’s control. Have contingency plans for cost overruns, temporary housing and bridge loans. As your agent, we can help you with ideas, and help you work with the lender in these worst-case-scenarios.