It’s no surprise that many in the process of buying a new home might be asking themselves, “Why do I need a realtor?” This seems a natural question for those interested in buying a new home, while wanting to save all they can. After all, you can talk with the home builder or his agent and quickly be the owner of a brand new home- and you can do it all without ever having to pay commission to realtors. What you may not realize is that the money you are saving by skipping out on the realtor isn’t really being saved at all. In fact, those who don’t use a realtor are costing themselves more in the long-run.
That’s right. Whenever you try to save yourself that 3% commission rate, you aren’t cutting the cost of your home at all, because the realtor’s sales commission is taken from the builder’s profit. Furthermore, the seller’s agent has no interest in helping the buyer. His job is to get the best possible deal for the builder, so don’t be fooled by their friendliness, whether well-intentioned or not. The seller will not give you a discount because you aren’t represented by an agent. By going into the transaction unrepresented, the builder is free to either pocket his savings or pay a higher commission to their sales representative.
Now that we’ve debunked the myth that you’ll be coming out ahead by skipping an agent, we’d like to point out all of the benefits that come with being represented in your transaction.
For starters, your agent is a licensed professional, meaning he or she has a wealth of knowledge and resources unavailable to the average home buyer. By hiring a realtor, you also save yourself the time and energy of doing quite a bit of legwork. Many buyers justify not using an agent because they figure they can do this legwork themselves and save some money. Given that in most cases the builder pays the real estate commission, why not save yourself the trouble and let a professional do the legwork? Real estate agents are also your personal advocates. During the process they represent your interests and wants to get you the best deal possible- after all, their jobs and reputation depend on it! In some cases, an experienced agent can even negotiate with the seller’s non-negotiable prices to get you a better deal.
So instead of asking yourself, “Why should I use an agent?” the real question is, “Why wouldn’t you hire an agent?” At no cost to you, hiring an agent will save you time today and money tomorrow.
The advantages of having me help you purchase a new home are the same as those for purchasing a resale home…knowledge of the market, help in finding the perfect home quickly, expertise in contract writing/negotiation, getting the right inspections included, and closing assistance. The builder has a professional representative watching out for his needs, and you need the same expert representation.
Buying a new home is a little more difficult and time-consuming than buying a resale. Your Realtor can professionally guide you through this process. They have experience working with builders, has access to a database of information about subdivisions, floor plans, etc. and are also familiar with new home warranties and builders purchase contracts.
It is very important that your interests be professionally represented when you are entering into a contract for a semi-custom or build-to-suit home. These transactions are complex and the contract details must be exact in order to protect you and to ensure you get exactly the home you want!
Is there any advantage to not using an Agent to purchase a new home?
No. There is no financial advantage for you to buy directly from the builder. In the centra Virginia area almost all Builders have a “single-price” policy, meaning you will be charged the same price whether your interests are represented by an Agent or not. Just as in any resale, the Seller pays your Agent’s fee.
REMEMBER – Some Builders requires that your Agent accompany you on your first visit to the Builder’s sales office, so make sure that happens or you risk the chance they will NOT PAY your representative’s fee!
Michael Guthrie CEO and Broker Roy Wheeler Realty Co.