How Choosing the Right Agent Can Save You Money When Shopping For New Construction

Most builders' advertised sale price already includes a hefty commission for the buyer's agent. For example, a $200,000 home probably has $4000 -- $12,000 in commission built-in to pay a "buyer's agent" fee. Shockingly, you learned that if you walk into a sample home yourself (without an agent who represents YOU), and buy a house, the builder KEEPS all this extra money!

The reason for this is simple. Builders need real estate agents to sell their houses. Since 80% of all people who buy homes use an agent, no builder in his right mind would try to sell out an entire sub-division without cooperating with the professional real estate community. To insure that agents introduce his community to any qualified buyer they may have, builders usually offer commissions at least equal to the 'going rate' for that area. However, since commissions can only be legally paid to someone properly licensed in that state, the builder has every right to just keep the extra money if no Buyer's Representative is forthcoming.

The important word here is "introduce". Once a couple wanders into a sample home by themselves, and register with the Builder's Representative, they will find themselves hard-pressed, later on, to persuade many builders to pay for their Buyer's Representative. Getting something you are already paying for is just one reason you should find a Buyer's Representative BEFORE you begin looking at new construction.

Here are some other reasons you should work with a Buyer's Representative when purchasing new construction:

SAVE MONEY ON COMMISSION. You and your Buyer's Agent will settle on a fee before you begin to look at homes. In some cases, the builder may offer more commission than you agreed to pay your representative. When this occurs, your agent can direct the builder to issue you a credit, at closing, for the excess. This happens more times than you think. For example, builders may advertise a "bonus" to the agent for selling a particular house or building lot.

SAVE MONEY ON PRICE AND OPTIONS. Many buyers believe the sale price on a new home, as well as the listed price for options, are "written in stone". An experienced Buyer's Representative knows which items may be open to negotiation.

PROTECT YOURSELF. The standard builder's agreement of sale is notoriously one-sided, in favor of the developer. While some of the terms of the contract may be justified, considering the risks builders have to take, many of the clauses can be modified to better protect the buyer. An experienced Buyer's Representative will be aware of the clauses that can and should be changed. In some states, such recommendations must be made by an attorney. A Buyer's Representative will be acquainted with those lawyers who are knowledgeable in the real estate field.

GET ALL THE FACTS. An experienced Buyer's Representative will provide you with ALL the OBJECTIVE information you should have regarding the properties and neighborhood of any house that interests you. To make an educated decision, you need all the facts concerning the schools, the area, and the comparative value of the home you are contemplating (not just the 'good' stuff the builder supplies).

The bottom line is … when purchasing new construction, many reasons exist for using your own Buyer's Representative. It will usually cost you NO MORE, and you may actually SAVE thousands of dollars, time, and worry.