Why You Still Need an Agent to Buy That Brand New Home

Don’t let the pristine facade or shiny appliances of a model home deceive you: buying new construction will be as complex as any old real estate transaction, if not more so. Plus you’ll need to navigate the fine print of builder-friendly contracts, resist the temptation of fancy upgrades, and trust that a bunch of boards and concrete will become a suitable place to live on time.

You’re also paying a premium for buying new: on average, building a new home costs $296,828, or nearly 30% more than the average price of a resale home.

These are all areas where a knowledgeable buyer’s agent who’s got lots of new-build experience and local builder connections can be invaluable. And if you thought buying new construction without an agent would save you a few bucks in commission, think again.

It’s customary for the builder to pay the agent’s fee (we’ll discuss more on that below), so hiring pro help here is kind of a no-brainer. Just follow this guide that’ll help you make the most out of working with an agent on your new-home purchase and to find out what they can do for you.

A realtor helping a client buy a new house.
Source: (fizkes/ Shutterstock)

The value of a real estate agent in buying new construction

The process of buying new construction vs. a previously owned home differs in a few key ways. Your new construction will be customized to your specifications, and can take anywhere from 10 to 16 months on average to build.

Whereas an agent of a previously owned home will help you through finding a home and making an offer, they’ll focus on these main things when you’re working with a builder:

Advocate for your best interests

The builder’s real estate agent can be a good resource in the new construction process, but don’t forget they’re representing the builder in the sale. Seller’s agents in new homes work hard to maintain relationships with the builders, and at the end of the day, they will prioritize the builder’s interests over yours.

With a real estate agent in your corner, you’ll have someone on your side who is invested in your happiness with the home.

“The builder is working for the builder and their staff is working for the builder,” explains Pam Charron, a top Sarasota agent who’s represented buyers in many new construction sales. “Obviously builders want happy customers at the end of the transaction, but they are looking out for themselves. If you hire a Realtor as a buyer’s agent, our goal then is to help protect you.”

A seller’s agent doesn’t want the buyer to have a bad experience, but their fiduciary duty lies with the builder. Because of the structure of commission, the seller’s agent is legally obligated to serve their client’s best interests.

A buyer’s agent will help you think through things like your budget and the cost of each upgrade. Or, if the builder asks for a delay in construction, a buyer’s agent will push back and try to keep the builder on schedule. Their first priority is your happiness.

Decode the fine print of new-construction paperwork

Purchase contracts aren’t standard legal boilerplate. “Many times we can’t change specifically what’s in a builder contract, which is oftentimes very builder-friendly,” Charron explains, “but we can connect buyers with a local attorney to help them through that process.”

Your agent will comb over the contract and bring up any issues to the builder and seller’s agent. Your agent will also know the right time to bring in an attorney, as well as when to let things slide and save money on legal representation.

Without an agent or attorney representation, you could inadvertently agree to some terrible terms:

Using shoddy building materials without your knowledge
In 2016, one of the largest home building companies in the country set aside over $400 million for buyer legal claims around poor craftsmanship and construction, even when the materials were clearly outlined in the contracts.

Signing a contract without an understanding of material quality could lead to a long legal battle with your builder — like a Texas couple who only won a defect case with their builder after 14 years in a legal battle. A buyer’s agent with experience in new construction can request for more detail on building materials, something you as a buyer aren’t trained to spot.

Construction delays with no end in sight
Barring a natural disaster or other unforeseen circumstances, a builder should complete your home in a reasonable amount of time. But some builders won’t even include a completion date in their contract.In those cases, buyers will have a challenge holding their builders to a time frame.

However, an agent with experience in new builds can help create a reasonable timeline for the build, including padding for inclement weather or construction delays.

An unreasonable payment schedule
In most states, a contractor or builder can’t ask for more than 33% of the total cost of the home upfront, and without a seasoned agent by your side, you could be agreeing to a payment schedule that conflicts with the structure of your loan.

Changes to the scope of work
Nearly every construction contract will have a “change of work” clause included. This clause explains the process in which a builder can change construction at any point in the project, and how they must inform the buyer.

However, depending on the contractual boilerplate, they might sidestep change order proposals altogether, or amend the clause to give limited notice to the buyer. A new-construction buyer’s agent will have experience with changes in scope, and can help suggest a process that’s easiest for you.

Waiving your right to legal recourse in the event of a dispute
You’ll have little to no legal recourse on any of the above issues if you sign away your right to legal recourse. A buyer’s agent could also help you hammer out a builder’s warranty that would cover defective material and labor as well as keep both sides from costly legal fees if problems arise.

While you hope none of the above occurs, a real estate agent with new-build experience, with the help of their attorney connections, will look for these elements in a contract and make sure that the agreement benefits both parties and that you’re protected if the builder fails to uphold their end of the bargain.

A kitchen in a new house that a realtor assisted with buying.
Source: (Milly Eaton/ Pexels)

Separate reality from model-home fantasy

When you get to hand-select so many elements of your home, you’ll be tempted to go overboard. In some instances, the highest profit margin for builders is in the upgrades — don’t count on them to suggest faux marble countertops over the real thing.

These are few examples of upgrades don’t bring enormous value to your home, but they’ll yield high profits for your builders:

  • Lighting
    The lighting upgrades builders offer are typically generic, and you can easily replace lighting on your own, or for a lower cost with an electrician.
  • Crown molding
    This design choice is an expensive upgrade, but doesn’t cost much for builders to install. On the back end, this elaborate molding won’t add to the value of your home.
  • Knobs and pulls
    You’ll save money in the long run if you upgrade these on your own post-construction. Builders don’t always have an extensive inventory of options, and it’s something you can change easily on your own.

“The first thing is sitting down and looking at a budget of what is realistic,” Charron says.

After you complete the home, additional costs like landscaping, window treatments, and appliances will come into play. New construction homeowners pay between $3,000 and $15,950 on average to build out the landscaping of their property. With those numbers in mind, Charron works with her clients to create a holistic budget for their new builds.

Think long-term about resale

You’ll be the first person to ever own this house. But if you make it completely 100% yours, outfitted to all of your eclectic personal tastes or the latest fads, you could face challenges down the line if you ever go to resell.

A report from the National Association of Home Builders shows the average buyer these days stays in a house for about 13 years. That’s a lot of time for the hottest styles to fade.

An agent can help advise you on decisions like whether bold backsplash tiling will last or if you’d be better off with classic white subway tile. Charron also gives the example of a buyer who didn’t ever take baths so she built the new house without one. Trouble is… that makes a house tough to market down the line. People with kids (or those who enjoy a great bubble bath) will be disappointed.

Assistance finding the best financing for you

Some builders work with preferred lenders or have their own lending companies. This can make financing a new build easy, but won’t always result in the best deal for you.

An experienced new-construction agent helps you weigh the benefits and drawbacks of your lender and loan options, which may include:

  • Banks or credit unions in the area that offer good terms for new construction
  • Different types of home construction loans, such as:
    • Short-term home construction-only loans, which cover the costs of the land purchase and building costs. You’ll either need to pay the loan off when construction wraps or apply for a mortgage.
    • Home construction loans that auto-convert to traditional mortgages once the home is complete.

Communication between you and builder

Staying in constant contact with your builder can be a full-time job. “Having a Realtor gave me peace of mind,” explains Angela Worley, who purchased a new build in 2018. “She would even drive to the lot and take pictures for us to update us since the builder’s Realtor did such a terrible job at keeping us in the loop in the build of our home.”

A seasoned agent with experience in new builds can give you invaluable insight during the process. Whether they’ve done business with those particular builders, or are aware of other comparable communities in the area, they can provide a wider context to your transaction. They might have an existing relationship with your builder, easing any tensions that might arise.

Charron shares the example of a client who wanted a pool in the backyard of the new home. The builder approved it right away, “but my experience said go back and ask what size,” Charron explains. In this instance, the pool the buyer was dreaming of swimming laps in was in fact a glorified plunge pool where you could barely doggie paddle.

It isn’t the responsibility of the builder or builder’s agent to keep you in the loop, but a buyer’s agent will stay in touch as construction progresses, and advocate for your needs as the buyer.

References and referrals

If everything goes 100% according to plan, great. If not, it’s nice to know you’ve got backup. says Worley. “I wanted to make sure that the purchase of our home went smoothly and have the backing of our agent’s broker and the team of attorneys to handle it should something go wrong.”

Comparable data and deep knowledge in the area

An agent comes to the new construction process with key area knowledge: they know how much homes cost and the going rate for different construction projects. They’ll be able to tell you if you’re getting ripped off on the sale price or if a builder overcharges you on granite countertops. Armed with this information, they negotiate on your behalf from a position of power.

They also know how to spot a deal. Just because builders won’t often lower the base price of a home doesn’t mean there isn’t space to negotiate for free upgrades or financial incentives. An experienced agent knows the complicated dance around new build negotiations and when the timing is right to ask for deals and freebies.

Source: (Milly Eaton/ Pexels)

Who foots the bill? Why you need to work with an agent from the beginning.

If you’re considering working with an agent on your new build, don’t delay the decision. The further you get into the home shopping process, the more challenging it becomes to bring in an agent. In fact, if you’ve already registered with a community, it might be too late.

“Some builders are very agent friendly, and some are absolutely not. If you go into new construction and register without your agent, it may be difficult to have them come in later,” explains Charron.

Some agreements with new builders won’t include an agent’s fee for the buyer. That means if you’ve already signed with a builder and want to bring in an agent, you could up paying the agent’s fee directly.

The structure will vary by builder, but at the start of your search it’s important for you to get a copy of the commission structure from the builder, so you know who’s paying your agent’s fee.

In most cases, if the property is listed on MLS, they’ll offer a fee, “but they don’t have to,” explains Charron. The fee is often up for discussion, and a good buyer’s agent will negotiate with the builder to include their commission in the sales price, in addition to the savings their experience will bring.

If you’re building what you buy, you might think, “Why would I need an agent?” However, new construction is a complicated and expensive process. The experience a knowledgeable buyer’s agent brings to the table is worth more than you’d save in commission or an agent’s fee.

The key is finding a pro who’s seasoned in the world of new construction. Don’t be afraid to ask:

  • How often do you work in new construction?
    The agent should be able to speak to what percentage of their clients fall into this category, and an approximate number of total new-build transactions they’ve advised in.
  • Do you have a relationship with any local builders?
    It wouldn’t hurt to work with an agent who’s on a first-name basis with builders across the city. An agent who has established relationships can ease the process, and shows a depth of experience across multiple companies.
  • What value do you bring to this transaction?
    Buyer’s agents in new construction serve many different functions. An agent should be able to explain the process and how they can make it easier for a buyer.

There’s a wide array of agents out there and new construction is a different world compared to resale. Taking the time to find the right agent to fit your needs can make the whole process smoother. HomeLight makes the complicated process of finding an agent easy by using data to match you with an agent that has a proven track record and relevant experience for your needs.

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