Blog > Buying a new build.. What the builders don't want you to know!(2021)

Buying a new build.. What the builders don't want you to know!(2021)

by rodneyeiland-chime-meJanuary 11, 2021

(Why You Still Need an Agent to Buy That Brand New Home)

Let me start with the main benefit for you as a buyer…..


It’s customary for the builder to pay the agent’s fee (we’ll discuss more on that below),
so hiring pro help here is kind of a no-brainer. Just follow this guide that’ll help you make the most out of working with an agent on your new-home purchase and to find out what they can do for you.

The value of a real estate agent in buying new construction

The process of buying new construction vs. a previously owned home differs in a few key ways. Your new construction will be customized to your specifications, and can take anywhere from 10 to 16 months on average to build.

Whereas an agent of a previously owned home will help you through finding a home and making an offer, they’ll focus on these main things when you’re working with a builder:

new build in Argyle crossing for sale

Advocate for your best interests

The builder’s real estate agent can be a good resource in the new construction process, but don’t forget they’re representing the builder in the sale. Seller’s agents in new homes work hard to maintain relationships with the builders, and at the end of the day, they will prioritize the builder’s interests over yours.

With a real estate agent in your corner, you’ll have someone on your side who is invested in your happiness with the home.

“The builder is working for the builder and their staff is working for the builder,” explains Pam Charron, a top Sarasota agent who’s represented buyers in many new construction sales. “Obviously builders want happy customers at the end of the transaction, but they are looking out for themselves. If you hire a Realtor as a buyer’s agent, our goal then is to help protect you.”

A seller’s agent doesn’t want the buyer to have a bad experience, but their fiduciary duty lies with the builder. Because of the structure of commission, the seller’s agent is legally obligated to serve their client’s best interests.

A buyer’s agent will help you think through things like your budget and the cost of each upgrade. Or, if the builder asks for a delay in construction, a buyer’s agent will push back and try to keep the builder on schedule. Their first priority is your happiness.

Decode the fine print of new-construction paperwork

Purchase contracts aren’t standard legal boilerplate. “Many times we can’t change specifically what’s in a builder contract, which is oftentimes very builder-friendly,” Charron explains, “but we can connect buyers with a local attorney to help them through that process.”

Your agent will comb over the contract and bring up any issues to the builder and seller’s agent. Your agent will also know the right time to bring in an attorney, as well as when to let things slide and save money on legal representation.

Without an agent or attorney representation, you could inadvertently agree to some terrible terms:

Using shoddy building materials without your knowledge
In 2016, one of the largest home building companies in the country set aside over $400 million for buyer legal claims around poor craftsmanship and construction, even when the materials were clearly outlined in the contracts.

Signing a contract without an understanding of material quality could lead to a long legal battle with your builder — like a Texas couple who only won a defect case with their builder after 14 years in a legal battle. A buyer’s agent with experience in new construction can request for more detail on building materials, something you as a buyer aren’t trained to spot.

Construction delays with no end in sight
Barring a natural disaster or other unforeseen circumstances, a builder should complete your home in a reasonable amount of time. But some builders won’t even include a completion date in their contract.In those cases, buyers will have a challenge holding their builders to a time frame.

However, an agent with experience in new builds can help create a reasonable timeline for the build, including padding for inclement weather or construction delays.

An unreasonable payment schedule
In most states, a contractor or builder can’t ask for more than 33% of the total cost of the home upfront, and without a seasoned agent by your side, you could be agreeing to a payment schedule that conflicts with the structure of your loan.

Changes to the scope of work
Nearly every construction contract will have a “change of work” clause included. This clause explains the process in which a builder can change construction at any point in the project, and how they must inform the buyer.

However, depending on the contractual boilerplate, they might sidestep change order proposals altogether, or amend the clause to give limited notice to the buyer. A new-construction buyer’s agent will have experience with changes in scope, and can help suggest a process that’s easiest for you.

Waiving your right to legal recourse in the event of a dispute
You’ll have little to no legal recourse on any of the above issues if you sign away your right to legal recourse. A buyer’s agent could also help you hammer out a builder’s warranty that would cover defective material and labor as well as keep both sides from costly legal fees if problems arise.

While you hope none of the above occurs, a real estate agent with new-build experience, with the help of their attorney connections, will look for these elements in a contract and make sure that the agreement benefits both parties and that you’re protected if the builder fails to uphold their end of the bargain.

Looking for New Builds?

Looking to buy a house in Argyle? Check out some Argyle New builds:

Argyle Texas, Argyle Crossing New Build Homes available now

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