Why You Need an Agent for New Construction
When looking for a new home, new construction can be an alluring option. Being the first to own a pristine new house, without the worry of wear and tear from previous owners. But don’t let that fool you- buying new construction is still a complex real estate transaction to navigate. Here are some of the top reasons you still need your own real estate agent when purchasing new construction.
1. Having Someone in Your Corner
Just as sellers of previously owned homes will typically have an agent representing them, builders will most often have their own agent. This agent can be a great resource to keep you advised on the construction process, but it’s important to remember that they represent the builder’s interests, not yours.
With your own agent advocating for your best interests, you’ll have a knowledgeable representative on your side who is obligated to find you a satisfying outcome. An experienced agent can help you plan with your budget in mind, which will be crucial when deciding on each optional upgrade. They will also keep a line of communication open with the builders to keep you informed on any delays, and if necessary, push back to try to keep construction on schedule.
2. Navigating the Paperwork
New construction contracts can often be structured favorably for builders. Your agent will pour through the fine details of the contracts to find any issues you should be aware of. If necessary, they will also know when to bring in an attorney.
Without proper review of the purchase contract, you could unintentionally agree to potentially disastrous terms such as:
- Undefined or unreasonable construction timetables, which can lead to significant delays
- An unreasonable or unfair payment schedule
- Using inferior building materials without your knowledge
- Major changes to the scope of work
Additionally, you could inadvertently waive your right to legal recourse on any of the above issues. A real estate agent with new construction experience, possibly with assistance from an attorney, will know to look for these items in a contract and make sure you have protection if the agreement is not upheld.
3. Knowing the Numbers
Your new-build agent will possess key knowledge about the local area. This will include how much homes in the area cost and the average rate for new construction projects. Additionally, they’ll be familiar with how much you should be paying for those additional upgrades to make sure you’re not being overcharged for those new kitchen cabinets.
Agents will also know how to find you a deal. Builders are known for not negotiating on the base price of a home, but they are still motivated by the time value of money. This means if a home has been on the market for a while, or is one of the last homes in a new development, there may be more room for negotiation. Even if the base price is non-negotiable, there could still be room to negotiate for free upgrades or other incentives. An experienced agent will know how to identify these opportunities and go to bat for you.
4. Finding the Right Financing
Many builders work with preferred lenders or have their own lending institutions. This can be an easy one-stop solution, but it won’t always be the most favorable option for you. Your agent will help you weight the benefits and drawbacks of your lending options, including:
- Local banks or credit unions with good offers for new construction
- Short-term home construction loans, which cover the costs of the land purchase and building costs
- Home construction loans that convert automatically to traditional mortgages once the home is complete.
Finding the best option for you could depend on your needs, the area, and your financial situation. An experienced real estate agent will help you make the right choice.
5. Long-Term Resale Value
For many buyers purchasing a new home, resale value is often the farthest thing from mind during the purchase process. With new construction, you have the opportunity to make your “dream home”, outfitted to all of your personal tastes. However, certain changes could result in challenges down the line if and when you go to sell.
According to the National Association of Realtors, the median duration that a buyer will stay in the same home is 13 years. Even if you are designing your new home based on the latest trends, a lot of things can change in 13 years. Your agent can help advise you on some of these decisions with resale value in mind, and help steer you away from decisions you may regret down the line.
Taking the time to find an agent with the right experience can save you a ton of headaches and money down the road. Find an agent with a proven track record in new construction to make the whole process a lot smoother.