There are plenty of benefits to buying a new home. You can trust that it’s in great condition with new appliances and no upcoming repairs or renovations. For some people, buying a new construction is a better option than buying a resale.
These features come at a cost, though. On average, new homes cost around 30 percent more than resales, so buyers need to be very careful during the process. If something doesn’t go according to plan, you could end up with a serious financial problem. Fortunately, realtors are here to help.
You may wonder if it’s necessary to work with a real estate agent when buying a new construction. The builder will have already hired their own realtor to facilitate the sale, so it can be tempting to do the transaction with only the help of the builder’s agent. However, no matter how simple or straightforward the sale seems, you should always hire your own realtor to have someone in your corner.
Here are five reasons you need your own real estate agent when you buy a new home:
1. The builder’s agent works for the builder.
The builders want to make the process as easy as possible for the buyer so that they get a good price for the construction. In many ways, their realtor will be very helpful for you. Ultimately, though, they don’t work for you. They work for the builder, and they have the builder’s interests in mind. To be sure you’re getting a good deal and not overlooking anything, you need a realtor who is there for you.
2. Your realtor will advise and advocate for you.
Your realtor’s main responsibility when buying a new construction is advocating for you as you work with the builders. They can help you negotiate on the price or the construction timeline, and they can advise you on whether or not to pay extra for certain upgrades or appliances in the home.
Most people only go through the home buying process a few times in their life. Real estate agents facilitate countless sales, so they understand the ins and outs of the business. They’re far better suited to negotiating with builders than the layperson because they have a solid understanding of the laws and standards in the industry. They’ll quickly spot red flags or opportunities to negotiate, and they’ll make sure you’re getting the best deal.
3. The paperwork is complicated.
All real estate transactions are heavy on paperwork, but new constructions can involve an especially large volume of documentation. Your realtor will help you decipher and understand the paperwork so that you’re fully informed of what’s going on. They’ll point out any issues of discrepancies they notice, and if necessary, they’ll get you in touch with an attorney to negotiate changes to the contract.
Without help from a professional, you could accidentally agree to unfavourable terms. For example, you may not realize that the builders are using poor-quality materials or unsafe building practices. The builders may try to omit the completion date from the contract so that they can delay the project indefinitely. They could also ask for more money upfront than is reasonable.
Hopefully, your builders won’t use any of these practices. However, because there’s so much documentation involved in buying a new construction, miscommunications and misunderstandings are very common. Having a realtor who can pore over the contracts will give you peace of mind as you sign the agreements.
4. Your realtor can help find financing.
Financing a new construction can be more difficult than getting a traditional mortgage. With a typical mortgage, the home serves as collateral for the lender. However, if you’re borrowing money to build a home, there isn’t any collateral to offer yet. You may not have as many financing options, but your real estate agent will help you find the best choice.
Your builder may have a preferred lender that they frequently work with, but this isn’t necessarily your best option. Your realtor should have connections to several lenders in your area that may offer you a loan. They can get you in touch with these lenders and help you decide which offer is best.
5. The builder may pay the fees.
In many cases, the builder pays the real estate agent’s fees, so bringing in a realtor will add no extra cost for you. If your builder will pay for the realtor, there’s no reason for you not to hire one. It won’t cost you extra, and it could even save you money if your realtor is able to negotiate on your behalf.
Buying a new construction is exciting, but it’s also an intense financial commitment. By hiring a realtor to represent you during the transaction, you’ll greatly reduce the risk of errors or oversights. Your real estate agent will make the entire process much faster and easier than if you tried to manage it on your own, and you can always consult with them if you have any questions or concerns. Even if you don’t think you’ll need a realtor when you buy a new home, don’t skip this step.