Should You Use a Real Estate Agent When Buying a New Construction Home?
Kate Heath • March 8, 2021
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A new construction purchase can have it's own nuances that an agent can help you navigate.
The short answer is, yes! Learn more about the benefits of securing an agent for any home purchase
and why it is important. For new construction specifically, finding an agent that has a background in new construction is essential and since in Maryland the seller, in this case the builder, pays the co-op fee (exclusive buyer agent commission),
you are getting the agent's expertise for free.
There are several reasons that it makes sense to talk to an experienced new construction REALTOR® before you visit a model home or set-up an appointment with a builder. It's important to be aware that most builders will require your agent to accompany you during your first visit and have your agent register with the builder in order for the agent to represent you.
Some of the reasons to sign an exclusive buyer's agreement for an agent to represent you in your new construction transaction, include:
- The builder has a representative that has a fiduciary duty to represent them, make sure you have the same. An experienced new construction buyers agent that you have signed an exclusive buyers agreement with has a fiduciary duty to represent you and can walk you through the process so you know what to expect. When meeting with the builders representative, having an agent that asks important questions and acts as a resource and advisor will help you feel more secure during the longer timeline of a new build.
- Advising about lender financing to make sure it's clear if the builder has incentives that could provide closing cost or additional monetary advantages over securing financing through an outside lender. Since financing is such an important aspect of getting you to settlement, making sure you understand the process and key questions are asked up front, as well as along the way, will help keep you on track to get to settlement.
- Jargon specific to new construction that is not typically used during a standard home sale, such as: Incentives, lot premiums, released lots, site plan, spec homes, standard features, home gallery/vendor selections, pre-construction, pre-drywall, renderings and elevations are just some of the terminology that your agent can help you understand and talk through with you before or bring up during your visit with the builders representative to help you understand the process and ensure you are making a more informed purchasing decision.
- Required disclosures and buyers rights are still applicable to new construction. Your agent can be another set of eyes to make sure you are receiving everything that you are entitled to. For example, if the builder has included in their contract that they are splitting the recordation and transfer taxes, your agent can look for this on the closing disclosure that will need to be issued 3 business days before settlement in the state of Maryland. This is just one of many examples that your agent can double check and raise questions about if something does not appear correct or was not disclosed.
- Let your agent work for you by setting meetings and being another set of eyes and ears, as well as another voice to make sure everything stays on track. From things like making sure you understand what standard features are to reminding you to talk to the lender about locking in your rate since most new build timelines will require you to wait until you are closer to your settlement date; these are all things that your agent can help you with.
- Each builder has a different process and may or may not have a model home available to tour. Your agent can help you find out more information about the builder and the home types available, locations and other important information so you know what options are available to you.
- Running a CMA for your new build can help you understand if the resale values in the community are in-line or lower then the purchase price. Making sure that you are not over improving your home so that the house will not appraise or you will not be able to sell your home for what you purchased it for could all be factors to consider when making your decision and determining which selections to include. Having information on any resale and other new construction recent settlements can help you understand the home values in the community.
- Let your agent be the bad guy if there are tough conversations with the builders rep. Most builders reps are great at building a rapport with the buyers and it could be uncomfortable for some buyers to have to push to ask for things or speak up if something does not seem right. Let your agent handle these tough conversations for you.
If you are interested in pursuing new construction or are not sure if you want new construction or a home that is being listed on the market, contact us today
and we can walk you through information on both types of transactions. We look forward to the opportunity to work with you.
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