In this article, Perry & Co. Realtor Brad Colburn has provided some important insights into why you need an agent when youre buying new construction.
- Its Complicated
Buying a new construction home is complicated. There are many steps in the process of building a home as a purchaser. Understanding the floor plans, elevations, standard options, upgrade options, lot choice and premiums, the builders contract, the disclosures, the mortgage options, inventory home vs. dirt start, are you getting the idea?!?
- Having Representation
The onsite sales person works for the builder! They are wonderful, nice, accommodating and make you feel right at home, but, they work for the builder. That means that they are looking out for the best interest of the builder, not for you. In Colorado, the builder does not have to use the real estate commissions approved contracts, therefore, they dont. Builder contracts are written by their legal counsel and protect them and their best interests. Having my representation will level the playing field as Im your agent and required to preserve your best interests. Ill also help you understand these contracts, your rights and answer any of your questions before you sign.
- It Doesnt Cost You
Having a buyers agent, on most real estate transaction in Colorado doesnt cost you anything. Buyer agents are typically paid by the seller or the listing agent via a co-op. There are a few cases where the buyer does pay this fee, but, thats a different blog. Builders happily pay the buyers agent fee for multiple reasons. They know that most buyers work with agents, and therefore, know thats where the buyers are. They know that buyers working with agents will be better educated and have fewer problems as the agent can work as a buffer between the builder and the buyer. Many people believe that by not using an agent, that the builder will reduce the price by the agents commission, this is simply not true. That commission either pads the builders profits or gets paid to the onsite salesperson! It does not trickle down to you!
- Which Upgrades?
An agent works in the business all day, every day. This will help you understand where youre going to get the most bang for your buck in upgrades. When youre building a new home, most buyers are not thinking of selling that home, however, youre going to sell that home at some point. So, thinking about this when youre designing the home is extremely important. Ill be there through the whole process to keep resale decisions top of mind. Also, the builder makes a cut of every upgrade that you choose. Sometimes, it makes sense to have the builder make the upgrades, sometimes, it makes sense to have the standard installed and upgrade after the fact. There are many upgrades you can do after you close for far less than the builder charges for them. Ill help you navigate those items and the entire upgrade process.
You will have many walkthroughs throughout the building process. I will help you decipher what theyre speaking about. Ill assist in where to put the switches, lights, outlets, smurf tubes, low voltage wiring, ceiling fans, egress windows during the pre-drywall meeting. The final walk is also important to identify all of the finish work that needs touching up. You cant have enough eyes at these walk throughs. Having an agent will help the builder take your concerns more serious at times. Builders have a tendency to push buyers to close the property and pass you along to warranty or post closing care. They do this so that their timelines look good on paper and surveys. You have less leverage after the closing than you do before you close, so, get as many unsatisfactory items addressed prior to closing.
- Warranty & Post Closing Care
As I mentioned above, warranty and post closing care. You have no leverage once you close on the property. Most builders offer a bumper to bumper warranty for the 1st year. Builders usually have a schedule of when they would prefer to work on your warranty items. Typically, 3 months and 10 months. They will walk your home with you at these intervals and address anything that has come up. Sometimes getting these walks and work completed can be difficult and frustrating. I help my clients get these done, in a professional and timely manner. Builders want to preserve the relationship they have with agents because they know that well be bringing more buyers to them if the entire process is great!
- Builder Fiscal Year and Inventory Knowledge
I work with all of the builders in the Denver metro area. They all have differing fiscal years. Why does this matter? Builders dont want to carry any inventory into a new fiscal year. Any inventory homes going into their year- end, builders are likely very motivated to sell these homes. Therefore, my buyers can grab these homes, typically at a discount with no wait for the home to be built.