Should I use a Realtor to buy new in a community (agents, investment)

[HsvMike]

I don't think this has been mentioned yet.

If you don't use a Realtor, the builder looks at you like one transaction. Just build your home and go on to the next one.

If you use a Realtor, they will do more to make sure the homeowner is happy and the Realtor is too. Because they look at it from the stand point, that if you took care of my client, I will send more to you.

I have had that happen on more than one occassion that my clients did get preferential treatment with the hopes that I would bring more of my clients to that builder.

Why not use a Realtor? Especially since it doesn't cost the buyer a thing.

[HouseWhisperer]

Get an agent to represent you, one you trust, one that has experience in new construction. Builders are not bad people, but they know A LOT more about all of this than your typical buyer. It won't make ANY difference in the price of the home and they should be involved (as much as you would like) in every phase of the build, up to the final punch list walk through and close.

[BagongBuhay]

We used one...she asked questions we would never have thought of like:

1. Is that retention pond there forever? Will it be fenced? How is the bug situation here because of that pond?
2. What is the normal traffic like on the street behind this lot? What can you do to minimize the noise? (Here she was negotiating for either more junipers or a fence at their expense.)
3. The area next to here that is under litigation...what do you know of what is being built here? Walmart? JCPenney?

Definitely use one! The builder would think twice about trying to pull wool over your eyes.

[oldmanbob]

A buyers agent is worth every penny if only for your protection. Most buyers have no idea of what to do, whats done to keep the builder in check, and several show you a model and try to upgrade you forever. Your agent, will order a qualified home inspector, and that will insure that all codes are followed, get you the best finaancing available, and know how to handle any potential problems. Early on deals are the noramal, and prices all depend on the supply and demand. So do your homework and find an agent you are comfortable with, and they will be happy to supply good references.

[jeffvivian]

I am a Realtor, and I have seen some people get the screws put to them when it comes to getting into a contract with a builder.

I know people say you can get 3% off the price by not bringing an agent and I can tell you that there is no deal that a builder (because I work for one) would agree to just because there's no agent on the other side.
A builder looks and says great I'm saving money.

[MarianneH]

I know this is long but I could go on and on about this.

Real estate is local so you can't count on the builder paying the Realtors commission. In the Triangle Area of NC builders welcome agents who bring clients and generally pay a half % less commission than resale homes although in this slower market there are often incentives that help with the difference. It is important to have your buyers agent with you when first visiting the property because the builder is paying for the agent to bring the customer not because you want representation. Sometimes if you have already been to a site and registered without an agent the builder will go ahead and pay a commission to your buyers agent because they value the agents relationship and want future business. I would have your agent ask about this because the builder rep will just tell you no.

Now for the reasons you really need representation. There are so many I'm not sure where to start. You do need to research your agent. You don't want someone who brings you to the site and then just shows up at closing to pick up a check.

The lot-
There are several pitfalls here. Usually in a new home development you pick your lot from a pretty site plan. It really doesn't tell you much . An agent who is familiar with new construction will want to see the development construction drawings. These show the areas of cut and fill, location of erosion control basins, drain pipes and stone (these can be ugly and dangerous), location of utilities (do you want a big green box in your front yard?), streetlights and landscaping.
There is usually a topo map with the existing grade and the new grade after development. The flood maps have been recently been updated in our area and you need to make sure your new home won't be in a flood plain.
Your agent should be able to look at the lot and see if there are any potential drainage issues. Water problems can be on going and affect the resale potential of the home.

Sure, you can research and find out if busy roads or power lines are planned, both the kiss of death for resale, but you may not be able to find out the inside information about what's going on nearby that isn't public record yet.

The builder-
Sometimes even a good buyers agent can't protect you from a builder who is having financial problems. Builders are pretty good at hiding this but an agent who has been around will know the signs and may have heard from suppliers who's not paying their bills. Your initial deposit can be huge, sometimes as much as 10% and you need to be sure sure the builder isn't borrowing from Peter to pay Paul.
Get the best deal-
A good agent will know what builders will do with price and incentives. The on site agents job is to get the best deal for the builder but a buyers agent with a good relationship with the on-site agent and other agents who have sold in the neighborhood can usually find out the real story.

Financing-
There can be lots of options here for a pre-sale. Your agent will be able to tell you what is customary. Some builders want you to contract to purchase the lot from them then you go get the construction loan. Usually in this case you are responsible for the interest on the loan.
Others will want a large deposit with a contract, then they get the lot released from the bank and get the construction loan.
A production builder usually wants a deposit of 5% or so with a portion of upgrades pre paid and then the remainder at closing.

The plan-
I recently visited a site with a client. The on site agent showed us plans and pricing for a home that hadn't been started yet. She offered to show us the same plan that was finished but sold. My client loved it. Looking around I noticed that the family room and kitchen looked larger the floor plan we had seen in the office. The agent insisted that it was exactly the same. I went back to the office, had her get the construction drawings of both houses and showed her the difference. My clients had not noticed this and if they hadn't had an agent they may have contracted for a different home than they expected. A good new construction buyers agent can read the plan and help you visualize what the final product will be.
Options-
Your agent will know what options have the most perceived value for resale and will know what you can expect to pay for upgrades based on the builders standards. Your agent should help you with the selections.

The contract-
Builders contracts protect the builder not you. In my experience they won't change anything in the contract but you need to know what you are agreeing to. It's a good idea to consult an attorney to go over the contract with you.

Construction-
Your agent should keep a close watch on the house during construction and inform you of anything that doesn't look right. Your agent should be a good sounding board and help you realize what it important and what isn't.

Inspections-
Just because the home is new doesn't mean you shouldn't have a private inspector. Your agent will know who is really good with new construction and should give you several names.

Closing-There are lots of details and your agent should make this worry free.


Then there are the unexpected things that always happen that your agent will know how to handle.

[CouponJack]

I didn't use a buyer's agent to purchase house which was new construction. The selling agent was a newbie who basically caved to 99% of my demands. Also, they needed the sale before the quarter ended which I also played into the negotiations. Most people just take whatever price the selling agent gives them as gospel, which is idiotic. For example, most don't realize that a "lot premium" is 100% pure profit straight to the builder. There are many more examples to list....

I agree if you don't understand the process fully, or are a lousy negotiator then by all means use a buyer's agent. However it is not required for all.

[Kim Emmons]

Hire your own Realtor. Make sure they are an actual "Realtor". The Realtors abide by a code of ethics. When you interview Realtors find out their knowledge level with the local builders and the community that your looking to live in. Start with the local real estate offices. They practice real estate in the town you are looking to buy in and probably live there as well. After all your not just buying a home your choosing a community that you will be in for awhile.

[shunda_henderson]

Honestly, a realtor can save you a lot of the headache of dealing with builders. The contracts that builders use is put forth to protect them and not you. With a realtor, you have representation and are protected. Besides, in most cases the seller or builder will pay your agents commission. Trust me there are many cases going on now where builders have made changes to contracts after being signed and others not to mentioned. It won't hurt to use a realtor. We are here to protect the public. Using us doesn't hurt your bargaining position no matter what some may say. In fact having an agent would improve your bargaining position. Besides a realtor would know exactly what to look for in the contracts and a good one will make sure that you understand every word before you sign anything.

Originally Posted by yunus89115

I have read quite a few of the posts on here and I see both sides of the issue. My real question is to my specific situation. I am looking at buying new and the home is not built yet. So its not an inventory home but a totally new custom home(well custom as far as I choose the options in it) But in this type of a purchase, can I use a buyer's agent? Or will the builder just laugh at me for trying to do so? Its in a planned community of about 200 homes and I want to get the best deal possible but I really don't know if I am able to negotiate the prices or if the builder will be set in their ways.

They even tried to say that currently they are offering half off all options and next month they will not be doing that. I'm not stupid, they are not near sold out of lots and I am smart enough to know that if it costs them X to build a house now, it will cost X next month to. I'm not paying $30,000 extra for waiting a month.

[jtuggle]

It's true that the builders agent doesn't split their commission with the agent, but some builders agents get paid a higher percentage if the buyer is unrepresented. But the point is that the builder does not give this additional amount to the buyer if he or she is unrepresented - as New Beginnings stated above, builders need Realtor business and welcome buyers who bring their own agents!

As far as the additional value that buyers agents can bring, your buyers agent will schedule and accompany you on all your home inspections (believe me you NEED home inspections on new construction.) I've seen water pouring through the kitchen light fixture (from the bathroom being tested above), walls that are curved, (the dresser would touch the wall in the middle and have a gap on either side), and city/county inspections that were failed and never rechecked.

The amazing thing to me is that over 50% of new home buyers are unrepresented. That means the builders agent represents the builder only, so if a dispute arises, the buyer doesn't have his agent to "run interference" for him.

I also agree with North Raleigh Guy about meeting and interviewing several buyers agents to determine who is the best fit for you. Good Luck!