There’s an ongoing conversation about whether having a buyer’s agent is necessary when purchasing a new-construction home.
A buyer’s agent works for homebuyers to represent their best interests throughout the transaction, according to the National Association of Realtors (NAR). Buyers can either pay the agent directly through a negotiated fee, or the agent may share in a commission from the listing broker.
It’s important to realize that if you’re dealing directly with a home seller’s agent, their primary goal is to achieve the best outcome for the seller, not necessarily for you. Meanwhile, builders often have their own real estate agent, only that agent is likely to direct you toward their specific development projects.
If your top priority is to find your dream home and you’re open to considering different areas or developments, having your own buyer’s agent can open the door to more options beyond just one subdivision.
If you do decide to employ the services of a buyer’s agent to purchase new construction, it’s best to work with one familiar with the process.
A real estate agent in Houston learned a lot by working for a local builder several years ago.
“Working with a builder helped me learn what it takes to develop and build new construction homes, while also allowing me to explain the process to clients who are looking to purchase new-construction homes,” the agent notes. “However, there are downsides: There’s a lot of paperwork involved when working with a builder, and you can’t be in two places at once, which means you have to spend a lot of time in the model home.”
An alternative: Agents partnering with builders
Many builders, rather than have their own on-staff agents, are now collaborating with independent agents or entire brokerage firms to offer tiered commission structures or bonuses that incentivize agents to highlight their developments. These agents could offer the best of both worlds, where they aren’t limited to any particular builder but still might have insider knowledge from a builder about better deals, upcoming promotions, and available lots that typical agents may not access.
Although some homebuyers worry about potential conflicts of interest that could arise from such arrangements, an experienced agent will be able to address both the needs of the buyer and builder at the same time.
I believe that by understanding, listening, and offering guidance, agents can strike a balance between the goals of both the builder and the buyer.
New construction vs. resale commission
Traditionally, builders have offered a 3% commission to buyer’s agents, but since the NAR settlement, some buyers have opted to go without an agent in hopes of negotiating a better deal directly with the builder.
Ultimately, deciding to save a few thousand dollars by not using an agent is a personal choice. However, it’s essential to remember that while the builder’s agent may be knowledgeable, their primary focus is on meeting the builder’s goals, which is to sell the home, not necessarily to provide you with the best options tailored to your needs.
Recent Comments