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Do You Need a Real Estate Agent for a New Construction Home?

couple stressed about building a house


So, you’ve decided to purchase a new construction home instead of pre-owned? Great idea, and you’re not alone! According to MetroStudy, Houston remains the second strongest market in the country for new home starts, only behind Dallas/Ft Worth. And thank goodness for that! We’ve been operating under a housing shortage for some time inside the 610 Loop and needed the bump in new construction to help keep up with demand.

In this blog I’m not going to count down to the #1 reason to use a real estate agent to purchase a new home. I’ll tell you the #1 reason up front: you need someone in your corner, representing your interests. And for those who think they’ll get a better price from a builder if they don’t use an agent, you could be right…but what if you’re not? Before you negotiate without an agent, here are some things you may not know:

Most builders won’t discount the price of a home just because you come alone.

The new construction builders who will negotiate on the price probably would have given you that much off the price of the house anyway. So you might get the price you want either way, but what about the rest of the transaction through closing? Who has your back? Who’s making sure the builder is sticking to the contract and is on schedule? Most people may not have the time or experience to manage the process themselves. Your agent essentially acts as your project manager while your home is being built but the builder pays for it.

Most builders won’t discount the price of a home, full stop.

The reason is simple: if they discount your home, they’ll have to give that same discount to everyone else. They’re just not eager to do that unless there’s a very good reason. However…

Some builders would rather give you upgrades than take anything off the price of the home.

And, some will even pay closing costs. Some will throw in a washer and dryer. Some might even throw in a fridge! Your agent knows the fair market value for the those items, how to negotiate for them. She or he will fight to squeeze everything they can out of the builder for you.

 What you see is not necessarily what you get.

If you’re visiting a builder’s model home, you’re likely seeing upgrades galore! The marble subway tile kitchen back splash you fell in love with may cost extra. Pavers around your back porch might be an upgrade. An agent will know what items are typically shown as upgrades in model homes, and the right questions to ask when it’s so not obvious. Speaking of upgrades…

A builder, no matter who they are, is working on getting the most money out of you for their bottom line.

Buying a home is a very personal, emotional journey…for you (and that’s ok!). For the builder, it’s all about the numbers. If you’re not represented by a professional negotiator, then you’re buying your new home from one who has little incentive to give you a “deal.”

Builders don’t have to use TREC contracts (which are drafted to protect the consumer) – they can use their own.

We live in a world where contracts are binding. Without an agent, you’re signing a contract for one of the largest investments you’ll ever make using a document that someone without your best interests at heart has written. I don’t know about you, but just the thought of not having another pair of eyes on that contract makes me cringe! Not only will your agent have handled multiple new construction contracts, she or he will know your rights and reasonable expectations you should have of a builder according to local laws.

Every builder is different.

Your agent will know which new construction builders are likely to budge on price and who isn’t. She’ll know who is likely to offer other incentives, and who will sit on inventory to wait for their price. Most importantly, an agent who is working for you will know local builders by product and by reputation in the market.

Hopefully I’ve convinced you to hire an agent for your purchase of a new construction home. There’s no good reason not to, and every reason to seek one out. It could literally save you thousands in the long run. If you’ve ever purchased a new construction home, drop me a line – good or bad! I’d love to hear from you!

See you around town!

Meagan R. Johnson

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