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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Comments
There is value in having an agent’s perspective when buying new homes because experienced agents have the vision necessary to not only buy the right model at the best price, but to look at the lot and how the property is sited.
The site agent will sell you the dog lot that no one else wants (hey, it’s a deal) while your agent will say “wait a minute, won’t this one have a direct view of the 24/7 Exxon gas station?”
I have walked into homes that are 2 to 5 years old and known immediately that the seller bought the dog lot/house on his own. Yup, they got sold!
.-= Doug Francis´s last blog ..The Whimsical Zestimate Gone Awry =-.
Doug – A favorite example of mine with cases like you mention is the “backs to greenbelt lot.” Why yes, the property is backed up to a gorgeous wooded area, but why are there roads two blocks over leading into those woods?
Today’s greenbelt can quickly turn into someone’s back yard tomorrow and I find that is often overlooked. Builders have a tendency to talk about the homes as if what you see is all they’re going to build. Then, when they reach phase two, three, four…suddenly your home is surrounded and the view you bought the home for is replaced by someone’s washing line and trampoline in their backyard.
Just a little foresight can go a long way. Add in local knowledge of planning and construction and you have a good reason to hire an agent.
.-= rerockstar´s last blog ..Has the tax credit helped lower inventory in San Antonio? =-.
This is an awesome article! Could I tweak it and repost it on my site (with attribution, of course!)
.-= Jonathan Benya´s last blog ..Tax Credit Bluster: Charles County Home Buyers Came Out In Force =-.
Jonathan – Of course you can. Let me know when you get it posted so I can take a look.
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