Friday, March 31, 2017 / by Jason Huerkamp
We, as real estate agents have heard the good and the not so good stories. Many times a buyer that we had coached through the idea of having buyer representation has been so grateful they have used our services. Here are some of the Myth's of new construction.
Myth #1 - You will get a better deal if you work directly with the builder.
This is not true. The builder has a price and his price set for his construction. He is not going to give you a better deal. Often the buyer's agent knows exactly what can be included and where to push the boundaries and inclusions. The builders marketing team is not going to tell you what you can get thrown in the deal for the same price. Your buyers agent will.
Myth #2 - There is a discount if your work with the builders agent
The Buyers Agent gets paid by the seller and the fees are already included in the new home build transaction. If you build a home and the Builders Sales Team tell you that you do not need representation, be sure that you know that agent is getting commission on both sides of the transaction. Who are they going to look after if the deal goes south? Of course, the person that they are employed by, the Builder.
Myth #3 - You do not need an appraisal on new construction
This is totally incorrect. You really should consider having an appraisal done on the blue print plans prior to construction. Surely that would be an important decision even when buying new construction
Myth #4 - You do not need a home inspection.
Its a brand new home, so nothing can be wrong with it, correct? Incorrect! Most Builders have the best intentions, however, the builders subcontractors or their own contractors cut corners without the builder realizing it. The only person who may know this is the Home Inspector. It will be the best money you spend to have complete peace of mind in the long term.
Myth #5 - The contract is fair - its a standard contract.
Who will make sure your interests are looked after in the building contract if you don't have buyer representation? The builder? The New Home Builders Sales Team? Correct - no one. There are no added fees for you to pay so its best to have representation. An experienced buyers agent knows how to find hidden costs.
At the end of the day, when buying new construction you really should have buyer representation. Real estate agents are professional negotiators and they know how to save you money and watch your back.
If you are considering new construction, before you visit the model home, talk to your real estate agent and find out the pitfalls, the red flags and the best deals. Most experienced real estate agents that deal with new construction will give you sound advice. They will also call on ahead and register you with the builders home sales team so that they know ahead of time that you are represented. Most times a real estate agent should go with you to look at the model homes. They will be well versed in what to expect, what to look for and even the bonus items you can score in the transaction.