When I could not get a straight answer to the simplest of questions, I wondered how any buyer could hope to get "the best home at the best price" or even a win-win without representation.
My son was offered 3% off if he did not use an agent . UPFRONT! Most of us that have worked for builders know that they have to turn a profit, 30% mark up on upgrades is not unusual, and they want to sell the less desirable lots first. Any smart builders rep will not point out any negative qualities of the home or community. If you are building from dirt, you see the jazzed up model, and not a true indicator of what is offered at base price. If you dont do this every day, you may not know to look for differences in anything from a cadet toilet to an elongated one, to the heights of ceilings, doors, type of hardware, lighting, plumbing, finishes, trim. The list is enormous. Most people get intimidated even with an experienced agents help.
This is getting way too long, but in Texas the builders rep does not even have to be a licensed real estate agent, so there is no fiduciary responsibility, no concerns about fairness, and certainly no code of ethics for that builder's rep to worry about. I just wonder where they were planning to make up that already built into the price 3%. Title policy? Back end by "encouraging" the buyer to use their preferred lender? Gouging the buyer on upgrades? Cutting corners?
The new homes sales agent works for the builder, and owes you only truthfulness--but half-truths are likely to meet any legal test of truthfulness. That debt of truthfulness is also based only on the potential for civil action if they are not truthful. REALTORS are governed by strict laws, national and state, and an even stricter code of ethics in addition to the potential for civil action. REALTORS also have the motivation of wanting to count on each client's referral and repeat business--an even more powerful incentive for providing the highest level of service.
A buyer's agent will be working for you and representing you. A good one will caution you about the "puffing" (& other half truths) used by the new home sales agent, and provide you with the whole truth. A REALTOR will also be able to advise you about financing, what to look for in a new property that a builder's agent may prefer you do not know, and how to negotiate the contract terms.
A Buyer's Representative Agreement can be for hours, months, or years! You the consumer decide what time frame you choose for the realtor to represent you. If you do not have a realtor, the builder's salesperson is working for the builder and has the builders best interest in mind. In my opinion, you will come out on the best end of a deal if you have someone working for you.
Let's go about it this way, when you buy a resale home, you have an inspection right? Why not have an inspection on a builder's home. So...
When you buy a resale home you use a Realtor so why not use a Realtor when you buy a new construction home...
Pros = The agent is trained not to be impressed with the staging of the home (we've seen it before...); the agent is looking for workmanship and the materials used and knows what is quality and what is covered up; the agent knows what kind of questions to ask the builder about warranties and other stuctural questions in addition to other questions the average buyer doesn't; the agent is there to make sure that your needs and wants are met; the agent will point out the "builders" falacies if any regarding pricing and area information, especially taxes info if there are existing homes to use to compare to for taxes; so much more...
I can go on with much more, remember being on both sides makes it easy to know these things. There are a lot of communites today with foreclosures being the prominent sales - hindering any other sellers that have to sell for whatever reasons... Homes were sold at much higher prices to unknowing buyers that "listened to the builder" without using an agent...
That's why it is in your best interest to allow your Realtor to represent you.
Most builders have a the price padded for give aways, commission, bonuses, and so forth, the realtor knows this and will work to get you the best deal.
Work with someone that will be held accountable for their actions.
Builder's agent represents the builder and looks out for the builder's best interest
Your realtor represents you and looks out for your best interests.
Best of luck with your new home
Although I am a Realtor, I do feel it is best to have prepresentation. The builders salesman is looking out for the best interest of the builder, not the buyer. The price of the home will be the same either way. Your buyers agent will protect you and get you setup, then you can meet with the builders agent and get your home built. Almost like two agents for one!
The purpose of a Realtor is to fight for your best interest just as they would their own. We know the questions to ask if you don't.
New construction with builders that cooperate with Realtors costs the buyer the same with or without the representation of a Realtor. That said, why would anyone not want the free assistance of a real estate professional on their side?
Get someone to advocate for you. I've never heard of a deal falling through over commission (and I'm sure some have, but not as many as the public thinks).
Just make sure your broker 'procures' the deal, meaning don't start shopping until you find a agent. Builders b.s. the public sometimes about the way commission works. Builders pay more commission than the average consumer (in most cases, there is no set commission rate), plus offer major buying incentives to buyers. This is why resale homeowners can't 'compete'.
There are tons of threads about this on Trulia. Hopefully, you'll have time to peruse the various insight from more than just 'pros'.
Get a buyer's agent that has experience with new construction. They can advise you on what items you can negotiate the most and which builders have a better product and which ones have the best incentives.
Durenda is right. The builder's rep is obligated to sell you a house for the most on behalf of the builder and a buyers agent's job is to get you to pay the least for the best.