05/08/2024
Planning to build your next home? One of the biggest mistakes many buyers make when building is not working with a buyer agent while they research their options and build their home. Here's some helpful information you should know!
How can a buyer’s agent help me while my home is being built?
Agents like us, who have many years helping buyers work with builders, can utilize those years of experience to prepare you for what to expect, what is normal, and what is not. Depending on your needs, we can attend your various appointments, help you compare the different new home options, advise you on what upgrades or options would better prepare you for resale, offer advice when something goes wrong, intervene if something doesn’t sound right, or simply be there as someone who’s with you along the way, explaining anything that doesn’t make sense!
We are lucky that in our area, most of our builders are local, honest, and fair, but that doesn’t mean that mistakes aren’t made and an extra set of eyes and a knowledgeable professional at your disposal will ever hurt.
In our area, we also deal with many clients who are moving to our area from out of state. Sometimes the builders in this area are not used to buyers not being easily available for last minute appointments or changes. Our out of town buyers also love that they have someone local who they can rely on to do small errands such as picking up keys, video chatting, attending installations & deliveries, etc. We also love sharing our preferred local professionals and vendors to our clients who are new to the area and need to find all new services!
But I'm still just researching, I don't need to contact an agent yet, right?
Wrong! This stage is a great time to contact a real estate team, like us, who knows the area and builders well! We can help you prepare yourself with the information you want to review in the early stages so that when you are ready you know where to start. We often act as our buyer’s main point of contact during the research phase, and oftentimes that spans over several years if our buyers are not in a hurry. We can talk you through what to expect throughout the process, which communities or areas are likely to fit your needs, and even help you determine what kinds of questions we need to ask when comparing builders and options in the area. We can also organize video chats with the builder if you live out of state, offer video showings of models or homes under contract, and show you the area in addition to the community itself, and once we learn enough about your likes and dislikes, we can also make suggestions for you.
We can help you find out the details you've never thought of, like what is included standard by the builder, what the upgrade will cost that you know you need, what the rules and regulations are for the community, and what the HOA fees cover- if you have the question, we can help you get the answer!
We could go on and on about how much we can offer you while you are researching, and we sincerely believe the sooner we can start helping you with your research, the better! When we meet new clients who have been going at it themselves for a while, we can almost see the weight lifted off their shoulders once we step in, so PLEASE let us help! You are never too early in the process.
Plus, if you contact a builder directly without an agent, you may loose out on the ability to have an agent represent you. It is best to choose the agent you plan to work with first thing, so that they can advise you on the best ways to contact a builder while still ensuring that you can have representation when you decide who will build your home.
What does the term ‘buyer agent’ and ‘builder’s representative’ mean, anyway?
In this article, the term ‘buyer agent’ means a licensed real estate professional that DOES NOT work for or represent the builder or builder’s broker. The buyer agent represents you, the buyer, and looks out for your best interest, keeping any confidential information private, and finds the best possible property for the you. Buyer agency is valid only when the buyer signs a Buyer Agency Agreement with the agent, detailing length of contract, commission amount, and the scope of what that licensee (buyer’s agent) can provide, in addition to many other terms.
The term “builder’s representative” refers to the professional(s) who the builder has chosen to bring them buyers and usually, the professional(s) who walk the buyer through the building process. Often this is the person present at open houses and providing pricing or answering your questions. The builder’s representative may be a licensed real estate salesperson or an employee of the builder. Either way, this means they are working for the seller/builder and looking out for the seller/builder’s best interest.
It should be clear where the risk is by not having a buyer’s agent represent you in the transaction- there’s no professional working on your behalf. If given the opportunity, why would you not have someone knowledgeable working for your best interest? If the seller has an agent, why shouldn’t you?
The terms “seller’s agent” and “buyer’s agent” and their responsibilities to customers & clients are also more heavily detailed in the Consumer Notice (link is at the bottom of this article).
But I never used a buyer’s agent when I built my home 30 years ago, why would I now?
Actually, buyer agency is a fairly new practice in real estate. Thirty years ago, even if you had an agent who was helping you to find a home and walk you through the process, that agent (called a subagent) was legally representing the seller in that transaction (although this was often not disclosed to consumers).
In the last 30 years, many laws and practices have changed to protect consumers and make sure they understand more about some of their biggest financial decisions, especially including real estate. That is one of the reasons that every licensee is now required to disclose known material defects in a property and must deal honestly and in good faith despite whether they are working as an agent for a consumer or not. We, as consumers, are extremely lucky now that buyer agency was created with the buyer in mind, to allow a consumer to have representation that looked out for their best interests.
Also, just because you choose to work with buyer's agent, it does not mean you will be paying higher fees to build or not able to communicate directly with the builder or builder’s representative any less. Bringing a buyer’s agent simply means you will have an extra set of experienced eyes looking out for you throughout the process and (with the right agent) making sure your research and building process goes smoothly.
By bringing a buyer’s agent to your first appointment at a new home community, you are simply allowing yourself to have representation and someone looking out for YOUR best interests throughout the process, instead of the builder being the only party with representation. Best of all, many builders are willing to provide compensation for your buyers agent if you follow the correct process of making sure your agent is the one to contact them first and/or is with you when you visit for the first time.
But what if I’ve already visited or contacted the builder directly?
Whenever you decide you’d like to utilize a buyer agent, try to involve that agent as soon as possible and be clear to the builder rep that having buyer representation is important to you. However, you should know, depending on where you are in the process and on the builder’s policies, it is possible that the builder will say they will no longer allow a buyer’s agent to be involved unless you pay the buyer agent commission out of your own pocket, which is always another option, but obviously much less desirable!
When it comes down to it, we sincerely believe that buyers who decide to not utilize a buyer’s agent while building their dream home are typically only doing so because they don’t understand they can or because they lost their chance by not having an agent with them from the beginning. After all, why would you not utilize an experienced set of eyes and ears when making such a major purchase?
If you are looking for more information about relationships that you can have with a PA real estate agent, here is a link to the Pa Consumer Notice document referenced above:
https://www.dos.pa.gov/ProfessionalLicensing/BoardsCommissions/RealEstateCommission/Documents/Board%20Documents/Written%20Consumer%20Notice.pdf
