3 Reasons You Need a Realtor to Buy New Construction - Ellen Pitts NC Realtor
Ellen Pitts NC Realtor
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why use a realtor for new construction

Why You Should Always use a Realtor for New Construction

Shopping for new homes is a lot of fun. And if you’re looking at new construction, you don’t need to depend on your agent’s schedule to spend the day house shopping. This ease of window shopping leads many buyers to think that because the builder has an on-site agent who can fill out the paperwork for them, they don’t need a buyer’s agent to represent them. You might be wondering why you should use a Realtor for new construction. Keep in mind that filling out paperwork is the least of what an agent does. Read on for 3 reasons to always have your own agent to represent your needs when buying new construction.

Protection Against Overpaying ~ Like resale home sellers, new home builders depend on comps (recently sold comparable properties) to determine sales price and predict appraisal value. If you rely on the builder’s agent to show you the comps to justify their price, you might be in for a surprise. The builder’s agent isn’t required to show you ALL the comps. S/he can pick and choose only the properties in which sellers got the most upgrades, making it appear to you that the average home price is more than it actually is. This is perfectly legal and this is why…

The NC Real Estate Commission licenses and regulates agents. The Commission’s purpose is, in essence, to protect consumers, both buyers and sellers, from any agent who might be unethical. To do this, they create statutes within which we real estate agents must operate so we don’t harm the consumer.

The NCREC rules govern what we are and aren’t allowed to do based on who we represent.

And here’s the big deal>>> Because the builder’s agent represents the seller, the NCREC guidelines prohibit her from disclosing any financial information that might hurt her client’s negotiating ability. Let that sink in for a minute… 

  • If the builder’s agent thinks the price is too high…she’s not allowed to tell you that.
  • If properties haven’t been appraising for the purchase price, she can’t tell you that either.
  • If sales have been slow and she knows properties will soon be discounted because of it, you got it, she can’t tell you.

It is your agent’s job to know if the property is unlikely to appraise, if the prices don’t justify the product and if sales have been slower in your market indicating that you might be able to get a better deal. The good news is Buyer’s Agents are paid by the seller so there is absolutely no reason not to have one!

They Won’t Apply the Agent’s Fee to Your Home ~ I sometimes hear sellers say that they would rather work without an agent because they think the buyer’s agent’s commission can be used as leverage for negotiating a lower price. They say this because they have never read a listing contract. In the standard listing contract, it stipulates that the seller’s agent is paid the whole commission and then later in the document it specifies how much is shared with the buyer’s agent. If there is no buyer’s agent, according to the contract, the seller is contractually obligated to pay the whole commission to the seller’s agent. It doesn’t get passed on to the buyer.

So you won’t pay less because you don’t have a buyer’s agent. But you could pay more. The builder’s agent has sales targets she has to meet. She is the one who is paid bonuses or incentives when she makes a particular sales goal. I once worked with a former new home sales agent who had moved to general brokerage. She told me that, across the board, buyers who came in unrepresented paid about $20k more for their new home than buyers who used a buyer’s agent.

Some builders have gotten smart and realize that they are better protected from legal disputes when there is a buyer’s agent involved and so they encourage buyers to select an agent. However, many builders are very strict about how buyer’s agents can be added to the contract. If you visit a model home without your agent and don’t tell them about your agent on the first visit, some builders won’t allow you to use an agent at all. Think about that…it isn’t because they want you to pay less for your home. It is because they want to make a bigger profit.

Pro Tip: If you visit a new home community without your agent, carry a few of her business cards with you and make sure to put her name on the sign-in sheet.

You Have an Advocate When Something Goes Wrong ~ Let’s face it, no one thinks they need an agent until something goes wrong. And the average person has a limited understanding of the incredible number of things that can go wrong in a real estate transaction. There are just so many moving parts, regulations that govern all those parts differently and numerous professionals involved in the transaction: builder, builder’s agent, loan officer, loan processor, lending assistant, underwriter, appraiser, attorney, paralegal, home inspectors, etc. It doesn’t take much for one piece to gum up the whole transaction. Your agent is the one person in your corner that can manage all these different people and pieces of the transaction.

For example, when things are discovered during the home inspection or the builder’s walk through (and you should always get a home inspection, even for new construction) and you can’t get the builder to respond, it’s nice to have an advocate on your side to make sure that those issues are addressed and so that you know your rights. Builders offer great financial incentives for using their attorney or lender. However, those professionals are also working for the builder, not for you. Maybe you notice a fee that seems unreasonable. Your agent will know what is usual and customary for the market. Also, because the attorney and lender in these cases work for the builder, they might not be the best people to ask for consultation if a problem arises. If you need advice from other professionals, your agent will be able to consult with her preferred service providers. Because we bring them so much business, they are usually willing to answer questions for us even if it’s not for their client, without a consultation fee. Your relationship with your agent extends to the relationship she has with her professional connections. These are just a few of the ways your agents acts as your advocate during a new home transaction.

You can check out all the new homes for sale in the Triangle here

Or search all Wake County Real Estate for sale here!

About the Author Ellen Pitts

Ellen is the founder of Harmony Realty, a socially conscious realty company. Ellen believes in empowering her clients through education and open communication. Ellen is a number-cruncher at heart and takes great pleasure in following and analyzing the trends of the housing industry. She loves communicating the big picture to her clients and helping them to understand how the market affects their sale or purchase. Her honest and down-to-earth approach allows her clients to make informed and intelligent decisions to get the most out of their offers and negotiations.

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