New Construction – The Importance of Buyer Representation

Purchasing a new construction home is an exciting and significant investment. However, many home buyers underestimate the importance of having their own representation throughout the process. In this article, we explore the cruciality of home buyers being represented by a buyer’s agent when purchasing new construction homes. We emphasize the distinction between a buyer’s agent, who solely focuses on the buyer’s interests, and a builder’s agent, whose allegiance lies with the builder.

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. 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 end up paying the agent’s fee directly.

New Construction Case Study

We recently had a buyer’s agent who had been working for months with a couple. The client went on a builder’s website to gather some additional information and just chatting with the online bot nullified any commission the builder would typically pay out. As a result, our clients were upset with the builders about this. They had an excellent rapport with and trust in their agent and wanted her representation throughout the process. They expressed this to the builder, but the builder would not budge. Ultimately, the clients decided to pay a fee to the agent to continue her services. Moral of the story – To be truly represented, homebuyers should never talk to anyone associated with the builder (even online or via email) without their buyer’s agent.

_{It is easy to be dazzled by the Builder’s Agent. They undergo training to upsell home buyers on expensive upgrades that yield high profits for the builder, but don’t necessarily add tremendous value to your home.}

Builder’s Agents Represent the Builder

It is important to understand that builder’s agents work directly for the builder, and their primary duty is to protect the builder’s interests. While they may be friendly and helpful, their loyalty ultimately lies with the builder, not the home buyer. Builder’s agents undergo training to maximize profits for the builder, push upgrades, negotiate in favor of the builder, and promote their properties. This inherent conflict of interest makes it crucial for home buyers to have their own representation to level the playing field.

Buyer’s Agents Represent the Buyer in New Construction

As a buyer, your agent owes you a fiduciary responsibility and will act in your best interest. The purchase of a new construction home involves complex contracts and documentation, which can be overwhelming and filled with industry-specific jargon. These contracts are written to favor the builder. A buyer’s agent will assist in understanding the details, explaining the terms, and ensuring that the buyer comprehends their rights and obligations. Additionally, buyer’s agents can identify potential issues or discrepancies in the contract, safeguarding the buyer’s interests and preventing costly mistakes. Without a buyer’s agent, home buyers may unwittingly agree to terms that do not favor them. Other areas they can assist with include:

• Ensure the best possible deal, incentives, and upgrades
• Help navigate unrealistic escalation clauses
• Advocate for quality building materials
• Work to end construction delays with no end in sight
• Push back against unreasonable payment schedules
• Navigate changes to the scope of work
• Advocate for your protection

Objective Advice and Guidance

Buyer’s agents act as a neutral party, providing objective advice and guidance throughout the home buying process. They offer insights into the market, local area, and comparable sales to help buyers make informed decisions. Unlike a builder’s agent, who persuades buyers to purchase from their specific development, a buyer’s agent sole focus is to find the best fit for their client’s needs and budget. They recommend alternative options and ensure buyers explore all available opportunities.

Post-Closing Support

Our buyer’s agent’s support doesn’t end with the closing of the transaction. In fact, they assist with any post-closing issues, warranty claims, or unexpected challenges that may arise. Have someone on your side familiar with the construction process. They will help navigate potential concerns and can bring peace of mind to homeowners.

Conclusion

When purchasing a new construction home, having a buyer’s agent by your side is crucial. They provide expert negotiation, objective advice, and protection of the buyer’s best interests. Remember, while the builder’s agent may be friendly and helpful, their allegiance lies with the builder. Choose representation with a buyer’s agent and work with them in all communications with the builder. Doing so will ensure a smoother and more advantageous experience throughout the entire home buying process. If you are ready to start your journey of buying a new construction home, please reach out to us. We have worked with several builders and would welcome the opportunity to help you navigate the process.