Question: Should I work with a Realtor® when building a new home?
Building from the ground up.
I’m often asked (or see questions) about whether one should work with a Realtor® when buying and building a new home. When you visit a new community and sit with the sales representative for a builder in San Antonio, you’re sitting with the seller. The sale rep is working for the seller (the builder) and although they are friendly and shouldn’t take advantage of you, the fact is they are not required to have your best interests at heart. Since they work for the builder, their job is to a) get you to buy the new home and b) make the builder as much profit as they possibly can.
Some people assume that if they don’t work with a Realtor® when building a new home they might be able to shave a few dollars off the price. While this may be possible, I don’t see it happening very much. The builder calculates Realtor® commissions into their pricing structure. If they sell the home for less, it could potentially drag down the prices of their other homes (remember market pricing is based off of local sales trends – if homes of comparable size and quality start selling for less, depreciation in value will occur). I’ve seen many builders offer higher percentage commissions and large (tens of thousands) buyer incentives on homes at times – do you think they would offer all of this if they didn’t have their profit calculated down to the nickle?
Your Realtor® will act as your adviser, watchdog, point of contact, advocate, and master of ceremonies during the process (which is much longer than the closing time needed to buy a house that’s already been built). Because of the length of time it takes to build a new home, things can go wrong and before you know it, there is pressure to shrug it off and move on with the process. Your agent will help prevent that and fight for you in the event it does.
One huge note.
I’ve said it before, I’ll say it a thousand times more. Whatever you do, even if you don’t work with a Realtor® when building a new home (I’m a realist, I know some people won’t no matter how much I point out the value), get a phased inspection. Most inspectors offer a series of inspections during the build process after certain milestones (foundation pour, framing, wiring and plumbing, etc.). This is the most important thing you can do. The builder will tell you about their 7-step (or more) inspection process when building a new home, but those inspectors do not work for you – they work for the builder. It will cost you some money, but it will potentially save you headaches and more money down the road.
photo courtesy of jongrant33
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