Should I have an Agent represent me on a NEW home?

Buyers of newly constructed homes too often go it alone when they don't need to and probably shouldn't.  Yes, builders usually have a sales office with a friendly representative (who may not be a Realtor) who can show you home designs and site plans, answer questions and write up a purchase contract. 

What could be easier? Why would you want or need to enlist the assistance of a Realtor? Because going it alone isn't the best idea for a number of important reasons.  And having a Realtor on your side shouldn't cost you a dime, so why risk it? 

Just as with the purchase of an existing home, having the aid and counsel of a "buyer's agent" can help you get the most out of the process, while helping to prevent all kinds of problems.  To make sure that the builder recognizes that you are represented by a Realtor, take them along on your first visit.  An alternative is to bring their business card, tell the builder rep that you have an agent that will be representing you and ask if that is okay. If they say "no," well, we would wonder whether the relationship with that builder would be one based on mutual trust. 

What can a Realtor do for you?
First, you want to make sure that you have found the best location for your needs. There may be developments that you are unaware of which can even better fit your requirements.  If you are smitten with a particular development, your agent can let you know whether there are foreclosures or short sales there that might be a better buy or that you should at least know about since they will have an influence on home prices, including the builder's price, in the neighborhood. 

Your buyer agent can help you make sure that you have considered all the alternatives that meet your budget and other criteria.  When you have settled on the choice of a home, the builder rep (who may not even be a licensed real estate professional, let alone a Realtor!) will present their standard contract for your signature.  Realize the builder's lawyers have carefully crafted this so that it heavily favors the builder's interests. 

Builder contracts are not set in concrete. They can be modified, though builders will often resist this, particularly if you have no one backing you up.  For example, builder contracts typically permit substitution of materials if those specified do not arrive in time and may cause a delay in construction. You and your agent may want to insist that you have approval over any such substitutions, lest that French door you loved turns into a sliding glass door.  Even if you do not alter the contract, your agent can help you better understand its provisions and pitfalls and, should problems occur, help you resolve them. 

Once you have decided on the particular model home you want, you'll generally have a wide range of extra cost options available to you, depending on the stage of construction.  The temptation to load up on options is often hard to resist. Having a buyer's agent who can lend a critical eye to help you sort through the list of addon items will better enable you to stay within your budget.  Lavishing money on options that will not translate into value is not advised in today's competitive housing market in most cases, most especially if the home might have to be sold in the not too distant future.

That brings us to the issue of price.  When sales are strong, builders can stick to their list prices and reject below-list offers out of hand.  However, with sales still lagging badly, builders are just glad to have the chance to negotiate. Including some options is a minimum.  Much will depend on the inventory (if any) and builder-specific issues, as well as the local housing market generally. It helps to have an agent who is monitoring the pulse of the market every day and communicating with other agents who may have recent dealings with the same builder. 

Don't think that the builder will give you a discount simply because you don't have an agent. That won't happen. In addition, if you are unable to attend inspections for foundation work or predrywall, your agent can go for you. 

If you don't live near the development, they can periodically stop by the work site, supply you with progress reports, and photograph or videotape phases of the construction and an agent can help if major obstacles emerge. If you have dealt only with the builder's sales representative, however pleasant and helpful, understand that you are alone in this battle. 

The builder rep may try to resolve things fairly, but make no mistake about whose side that individual is on. 

If you have a home to sell, the builder is probably going to want assurance that you have a professional marketing your current residence.  Although existing home sales are picking up in many places, they are still slower than a few years ago. To give yourself the greatest chance for a sale at the best price, you may want to list it well in advance of the expected delivery date for the new home, even if it means having to move to a short-term rental.  If you have an agent with whom you are working, all these issues can be addressed as a whole.  © 2009, Real Estate Information Services, Capitol Assets, Choice Real Estate, Inc.

Montgomery County Agent Ben White

Search new homes for sale in Maryland Virginia and D.C.

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