Last Updated on October 2, 2020 by HortonTeam
Whether you’re just starting to think about new construction, or are ready to get in contact with a builder, there’s one step you absolutely can’t forget: establishing buyer representation. Find out what benefits you can expect in your new construction project when represented by an agent.
Buyer Representation Means Someone is Working for You
When it comes to new construction, diving into the process without buyer representation can drastically alter the process and final product you receive, usually for the worse. If you enter into an agreement with a builder and aren’t bringing an agent to the table, you’ll typically work with someone known as a builder representative, or builder’s agent. Many buyers expect this person to guide them through the entire process and help bring their construction ideas to life. While you may find this representative’s input and experience helpful, the reality is that the representative is working in the builder’s best interest. This means that even though it may sound like you’re getting a good deal, the representative will be coming from the angle of getting the best return for the builder and not you.
That’s not to say that you’re being swindled or anything of that nature; you just have to remember that this is a business transaction and the builder’s representative is employed by the builder. You’ll most likely be asked to sign paperwork saying that the builder’s agent is representing you as well as the builder. This is the same concept as if you called the real estate agent whose sign is in the yard—the agent becomes what’s known as a “limited agent,” meaning they are legally forced to act as more of a facilitator and won’t be able to work directly for your interests. To counter this, we sign a buyer loyalty agreement with you saying that we will be the sole fiduciary representative of you in your new construction transaction. This ensures that you’ll have a buyer’s agent from our team working to get you the best deal they can negotiate.
You Don’t Know What You Don’t Know
Just like with buying an existing home, there’s a good chance that you’re not an expert on what features make a quality home, what amenities will retain their value, or even what warning signs to watch out for. Why would it be any different when building a home? Having construction specialist can help you decide which features are best for you. They could also help with the best location that will benefit you, which practices or exceptions are general practice, and so much more. Aside from the internal components of the home, a good buyer’s agent will also be familiar with your local neighborhoods and their market statistics as well as specific builders and their practices. A buyer’s agent will know how to deal with certain events or actions that a consumer with no experience may not understand how to handle. Do you think a builder who is known for having extensive building timelines will volunteer that information up front? Most definitely not. A buyer’s agent, however, will know how to handle those situations. This agent will keep everyone involved happy and on the same page.
Obtaining Proper Financing
Another common field that buyer representation will help you with is obtaining proper financing. Financing an existing home is generally more straightforward. If you’re looking at a specific home before getting approved for a mortgage, you’ll know that the price of that home won’t change very much (aside from negotiations in purchase price). On the other hand, planning new construction can easily land you on a different price than what you see listed. This is because of the many package options at your disposal. For example, the home you’re interested in may be advertised at $200,000. Then, after selecting upgrades such as higher quality countertops, a larger deck, and a high-end appliance package, your final price may be $210,000. If you’re only approved up to $205,000, you can see why this would be a problem.
The Horton Team strongly suggests that you use a loan officer who is an expert in their field and has experience in new construction to make sure this doesn’t happen to you. Anthony D. Burks Sr. (NMLS: 1002384) with TRH Mortgage is a preferred lender with Jagoe Homes and works with many other builders in the area. If you’re interested in new construction, Anthony will help you see what price range you are qualified for. That includes what additions or upgrades you’d like to add to your project. You can send us a message to get into contact with Anthony, or visit the TRH Mortgage Facebook page today.
You Need a Negotiator—We Have One
As mentioned before, the fiduciary relationship between you and your source of buyer representation, is one that will deliver the best return for you. Not the builder. This is done through negotiation and expertise that a normal consumer wouldn’t possess. For example, it’s often possible to fight for upgrades to your home without adjusting the overall price of the build. This is because most builders want to maintain a consistent price point for the future sale of more homes. A real estate agent could negotiate these upgrades into your transaction without damaging the relationship between buyer and builder.
Kristi Raben, the Horton Team’s New Construction Specialist, is an agent who can help you achieve your new construction goals. Through her experience in the new construction industry, she knows the selling processes of local builders and how they operate. Kristi is able to use this knowledge to represent her new construction buyers. She makes sure they receive the maximum value inside their new homes that the builder allows. With her experience, we’re confident that you can realize your new construction dream home so much that we’re offering a free home inspection if you work with the Horton Team and use one of our preferred inspectors. Contact us today to learn more!