How important/benefits of using an agent when buying New Construction Home?

Asked by Chantel Rexroth, 21009 Sun Jul 29, 2007

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6
Bruce Lynn, Agent, Coppell, TX
Sun Jul 29, 2007
VITAL

***NEW HOME******BUYERS BEWARE***
If you are considering building or buying a new home you need someone in your corner to protect your interests. A home purchase is the largest investment most people make in their lifetime and you have the chance to be represented for FREE* and at no cost to you. There are people who have successful experiences working with both custom home and tract builders. However, I also hear lots of complaints from dissatisfied buyers who were not familiar with the process, the contracts, and the shortcuts many builders take to improve their profits or what do when things go wrong. I've seen builders sell the wrong lot, the same lot to two different people, sell the wrong elevation, put on the wrong brick, install defective floors, install defective roofs, install defective granite countertops, install AC/Heat units incorrectly, not put in insulation, install no outside water faucets, forget to install telephone, cable, and security wiring, and many other bad situations. What will you do if this happens to you? Who's looking out for your interests? You see the builder's reps are normally nice, friendly and helpful, but they are not looking out for your interests. Just like the car salesperson, they are represeting the builders interests and profits. The good news is that you can have someone in your corner fighting for you for FREE. Get a Realtor to represent you before you even visit a model home.

Don't buy a new home without representation:
• The builder's reps are expert negotiaters. Are you? How many homes have you purchased this year or this lifetime? Realtors do have a fiduciary duty to protect your interest.

•Some people think it costs more to use a Realtor, but in fact I regularly save my clients money versus them going directly to the builder. We bring multiple clients to the builders and they know that. They want our volume. You're only buying one home, but in some cases they even pay us bonuses to bring multiple customers to them. Be sure to ask me if you are elibable for a builder rebate. Most builders want you to have representation and have a seperate marketing budget to pay our fees. In any case it won't cost you more.

•Most builders require us to be with you at your initial visit. This is always a good idea. We'll help you find the right builder who offers the best value and the right neighborhood. If you have already visited the builder or a model home please call me immediately and before you sign anything. Don't risk a nightmare!

•We'll also advise you on when to get inspections and how often. Believe me when I tell you the city building inspector is NOT ENOUGH. You'll likely never see them because they're in and out of your home in 5-10mins each time they visit. They won't give you a written report and they certainly don't answer to you. We recommend professional licensed inspectors who will work for you to get the best quality home possible.

•Many builders don't accurately inform you about property taxes. Get the latest and accurate information on taxes before you buy. I hear over and over horror stories that builders are not collecting enough taxes at closing and sticking it to buyers a year later with $3000, $4000, or higher tax bills that were unplanned. Go at it alone and don't be surprised if your payments go up hundreds of dollars after your first year.

To wrap up it, very important to use a Realtor.
Web Reference:  http://www.teamlynn.com
4 votes
Paul Slaybau…, Agent, Scottsdale, AZ
Sun Jul 29, 2007
I think I can provide 2 very good examples of benefit. I currently have 3 clients that are under contract with builders here in Phoenix. Two of them are closing next month. The market has taken a step back since they each signed the contract, so I approached the builder. Knowing that builders are holding onto buyers at all costs in this slower market, I was able to negotiate significant increases to their incentive packages in both instances. Not a typical result, but it shows the kind of unexpected assistance that an agent can provide along with the protections mentioned by others in this thread.
Web Reference:  http://rayandpaul.com
1 vote
John Goad, Agent, Las Vegas, NV
Sun Jul 29, 2007
VITALLY IMPORTANT!!!! First off what many people do not understand is that the person you are in contact with at a New Home community sales office IS A REAL ESTATE AGENT, HIRED BY THE BUILDER TO GET THE BEST DEAL THEY CAN FOR THE BUILDER. That agent’s job is to represent their client’s best interests NOT YOURS.

As an example: I recently sold a New Home to one of my clients, and was able to negotiate that the builder would cover $18,000 of my buyers closings costs, take $60,000 OFF of the price and include some additional upgrades. I had done some research for my client and found him this home which was the last home in the subdivision and it was a home that was a "fall out" (in other words someone had bought it but could not complete the sale). Due to the fact that I knew that this was the last home the builder had left and wanted it gone, and that they wanted to have this community completely "Sold Out" I was able to negotiate a screaming deal for my client.

Be sure you hire a FULL TIME agent that works for your best interests, is willing to be available to fit your schedule, and posses the desire to do research to get you the best possible deal. If you are strictly looking at new homes, make sure and ask your agent if they subscribe to Sales Traq. The Sales Traq service is much like the Multiple Listing Service (MLS) of new homes. With this service your agent can research the price changes in each New Home community, look for "Standing Inventory" or "Fall Outs", etc. in order to help you get the best possible deal. NOT ALL AGENS SUBSCRIBE TO SALES TRAQ, in fact MOST agents don't and without this valuable service it will be much more difficult for an agent to help negotiate the best deal possible FOR YOU.
Web Reference:  http://www.GoadTeam.com
1 vote
Diane Glander, Agent, Spring Lake, NJ
Sun Jul 29, 2007
As a buyer, you will want representation to get you through the entire buying process from knowing how much to pay to the closing table.. The builder is representing his best interests, not yours.
1 vote
The Hagley G…, Agent, Pleasanton, CA
Sun Jul 29, 2007
First of all, the builder pays the Realtor fee - so it doesn't cost you a thing. A Realtor will be able to negotiate on your behalf, and point out hidden fees. I recently represented a buyer in the Bay Area where I negotiated $56,000 off the "non'negotiable" builder price of $795,000, plus another $23,000 in upgrades. In addition, the rep was going to charge my client $7500 if he used someone other than the builder's lender. This was also thrown out immeidately and my client was able to use his lender. Further, the bulder's representative is not always licensed. Get representation. Find a Realtor.
Web Reference:  http://www.cindihagley.com
1 vote
J Lo, Home Buyer, California Glory, Brentwood, CA
Sun Jul 29, 2007
The most IMPORTANT issue is the contract when purchasing a new build home. Most especially if you've never been in this arena before... and I do mean arena.

First of all, you are signing a contract drafted by the builder, for the builder, with the builders needs in mind, and benefiting only the builder. If you do not have a savvy agent you will find the road very confusing - and by the time you close you won't know what hit you - until the day you move in and see what you forgot - but assumed to be "obvious".

New homes models are not symptomatic of YOUR finished product and if you don't have someone there to walk you through - don't expect the builder or their representative to point it out to you...

PLEASE heed the sage advice of Mr. Bruce Lynn below - get representation ESPECIALLY on a new build: it's a jungle out there!
1 vote
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