Do I Need a REALTOR® when Buying New Construction Home?
As housing inventory continues getting lower around Arizona, new construction home may be the best course of action for many home buyers. Buying a home is one of the most important purchases of your life. Even if it’s your 3rd or 4th home or perhaps your first, there are still a few things that you should consider BEFORE walking into that model home the FIRST time. As a Realtor that have built a new home and helped buyers through their new construction purchased before, I am convinced that buyers need an advocate on their side, that does not work for the builder. Read why is important to buying new construction home with REALTOR.
Representation
The real estate representative in the builder’s sales office or model home represents the builder’s best interest not yours. As a buyer, you want an independent real estate agent represents your interests and advocates on your behalf. Additionally, a real estate agent will help you get the most value for the least amount of money and make the real estate transaction easy and frustration free.
Builders Pay the Agent’s commission
Who Pays the Realtor? A Realtor gets paid by the builder. It is in their marketing fee. Whether you hire an agent or not, the fee is already there as part of their cost of doing business. Builders will not credit buyers the commission they would otherwise pay to a Realtor. If they were to do so, realtors would no longer bring clients through the builder’s doors and ultimately it would impact their future sales. Therefore, there is no downside and no cost on your end to have an outside agent represent you.
Financing
When you are buying new construction home, some builders will offer you an incentive (contribute to closing costs) to use their preferred lender. But is it the best financing available? Even a small increase in the interest rate may cost you more money in the long run versus the compensation that the builder was willing to give you in closing costs. An experienced real estate agent will be able to connect you with reputable lenders so you can compare rates.
Builder Contract
Most buyers get blindsided by the 30-100 page contract that builder is going to use. The builder’s purchase agreements are written by the builder, for the builder. It is a one-sided contract, meaning it leans towards their best interest. As a home buyer, do you know what to look for to make sure you are receiving all the benefits you’re supposed to receive? Are you aware of any hidden fees or community fees? An independent agent knows the nuances of the different contracts and will help review and answer questions pertaining to the contract.
Negotiations
You want a Realtor® representing you during negotiations for your new construction home. An agent will look at the transaction from a dollars and sense perspective without being swayed by emotions. A good Realtor will also know what is and what is not negotiable and as you can imagine it varies by builder.
Get Everything in Writing
Any concessions or guarantees provided by the builder sale person should be confirmed in writing. Do not sign any paperwork or contracts without ensuring everything you’ve agreed upon including upgrades, fees, timelines, etc. are incorporated into the contract. If you skip this step, the builder does not have to deliver what they agreed upon and you will have no recourse. An agent will ensure all the terms agreed upon are included in the contract. If something said is important to you as the buyer, get it in writing.
Conclusion
When it comes to buying new construction, there are lots of benefits that come with working with an experienced real estate agent. Don’t go at it alone. A skilled Realtor is a professional working on your behalf. They can save you time, money and stress. If you want to be sure you have someone looking out for your best interest, tell the builder on your very first visit that you are already working with an agent. If you do not communicate this information upfront when you are buying new construction, your agent won’t be able to represent you and watch out for your best interest.
Wondering how much house you can afford?
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Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ area, we hope you will consider us. Contact us today for complimentary consultation.
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