We are going to primarily discuss the new construction marketplace for agents working with buyers. New Construction is a major source of inventory in many markets.
If you want to represent builders, in major markets, you usually go through their training program and learn how to sell their product. Their agents work for them full time as onsite sales agents. When the building company is smaller or the builder builds only custom homes, those builders will usually work with general sales agents. If you want to work with the smaller builders find out what they need and then build a program to meet the needs they have when selling their product. Some of the small builders just use one agent and some use multiple agents. Find out how it is in your marketplace.
New Construction should be discussed with buyers at the first consultation. Agents need to make their clients aware of the benefits of using an agent when purchasing new construction. While the builders will build the home and are glad to manage the process without a buyer’s agent in the process, most builders appreciate the value of a skilled and experienced Buyer’s Agent. New construction can provide a good option for people who want to control their timeline and still get a house they like. This is certainly true in our current fast paced market, but it can also be a huge benefit in a slower market when a buyer needs time to sell their current house or wants to ideally move 6 months later.
The builders’ agent’s job is to represent the seller, the builder, and sell houses. Certainly they want to hear the needs of the buyer and to try to get them into a product that will meet their needs. However, make no mistake, their loyalty and fiduciary obligation are to the builder and they are working on their behalf.
How can buyers benefit from having their own representation when buying new construction? A trained Buyer’s Agent can bring a lot of value to a transaction. I love to sell new construction. How can an agent bring value to the transaction and make it a win for both the buyer and the agent helping them?
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- The buyer gets a good home in a time frame that they can count on. The agent is able to get a buyer into a home with warranties that they can customize. And the build schedule, including walkthrough options and closings can be scheduled in advance. Go with the buyers to the community and introduce them to the listing agent. Register them as your client with that builder. This helps facilitate the process and will ensure you, the agent, gets paid for your work.
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- A trained agent will know and understand the buyers needs and can ask good questions of the builder’s agent to make sure the buyer understands exactly what they are buying. New construction is a shiny, pretty thing with lots of moving parts. Agents can help the buyers be aware of the location of the neighborhood, lot and how the house generally meets the buyer’s needs.
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- An agent can discuss pros and cons of lot placement as it relates to personal enjoyment, and resale. For my own recent purchase, I purchased a home where the back deck faces west and will be hot in the summer. I gladly accepted the consequence of the summer to get more winter sun, but not everyone realizes the varied considerations and potential consequences. And people may disagree on something neutral as to whether it is positive or negative for them personally.
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- Financing with a new homebuilder is usually a bit different from the process on a resale. Because of the time period it takes to build the house, there will need to be discussion about rate locks and which lender is really giving a buyer a good price as well as confidence in the process. And there are some factors in the closing costs that are different as well.
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- An agent can help buyers understand the contract. Agents are not attorneys, but an experienced agent will understand the contract enough to ask questions of the builder’s agent and to point out key policies that could come into place if there is a disagreement down the road.
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- Agents who work in new construction will be familiar with the new construction in an area. Agents should be visiting the builder’s agents to learn more about communities in their area. Ask questions about price and availability of upgrades and changes to the main floorplan.
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- An agent will be able to help buyers walk through the building process and help them identify what is normal in the process and what might be out of place and needs attention from the builder. They can also help with selections of the décor and home inspectors.
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Have you built a house before? Are you aware of all the moving parts in this process? If not, go and learn from other agents and the builders themselves. People do it every day and it is not difficult, but it can be confusing. When a buyer has an agent, this can help the overall moving process go smoother. Become an expert on new construction and help buyers understand all their options in the marketplace.