Realtor? For New Construction? Why?
I was talking to my Dad on a road trip last weekend and we began to discuss what I do as a REALTOR and my schedule. I was explaining to him that I was currently working with a buyer that was buying a new home in Cinco Ranch. Anyway, as the conversation continued, he asked me a very honest question. “Why does someone need to use a REALTOR if they are buying a home that is brand new and has never been lived in before? Why not just go talk to the builder?” I thought this was a great question. It certainly conveyed to me that many people simply do not know the importance of using a REALTOR. Anyway, I thought to myself that this would make a great post for my blog. So here goes:
Why do you need a REALTOR when purchasing a new home?
It is simple enough for a buyer to know if they like a home that they see. If only that was all there was to purchasing a home. If it is a resale home, then a buyer needs a realtor in order to gain access to the home so that they can see it. This is fairly straight forward. While this is not the only reason a buyer needs a REALTOR, it certainly is an important one. But what about a new construction home from a builder in the area? A buyer can simply go to the model home and view it without a realtor. Fair enough, right? So why is a real estate agent needed?
A simple answer is that a buyer needs representation. The problem is that most buyers, unfortunately, have no clue what that means. Well, I will give you an example of part of what it means. I recently closed on a home I sold in Firethorne, a community here in Katy, TX. I was representing the buyer. When we first talked to the salesperson for the builder, she told us that the list price of the home was $213000. Prior to my client signing a representation agreement with me, he had made the comment that this was the price of the home and that they could afford it. He asked me, “Why do I need you?” To make a long story short, I responded with some of the following reasons:
- You need someone looking out for you. For your best interests.
- You need to know if the transaction is going as it should be from contract to close.
- You need to have the negatives of a home, lot, location, neighborhood pointed out to you so that you will be able to resale the home in a few years.
- You need be certain that the contract is written in a way that you understand what you are signing and what it means.
- You need to a lot of things.
But most of all, 6. ”I can save you money.”
You see, most buyers assume, falsely, that if they do not use a REALTOR on new construction, they will automatically save the 3% commission that the agent will make. Well, that is flat wrong. Most reputable builders will tell you that they will not change the price of a home if you do not have a realtor or if you do. They like us because we bring buyers to them. Furthermore, they will tell you that the monies used to pay the agent on the contract are used from other funds, not from the funds on the home purchase.
So, back to my story, he agreed to sign a representation agreement with me and I ran some comparible sales in the area from that builder (All REALTORS should do this for you) and showed him what the pricing was on those previously sold homes. We then discussed a legitimate offer amount and he got that house for $183,500, NOT $213000. I would say, as would he, that if I did nothing else for him, which I did, that I had earned my money on that transaction. He has the assurrance that he got as good of a deal as the other buyers in the subdivision and better than the vast majority. It simply amazes me how good people are at rationalizing the deal they get when all they have to base their DEAL on is the word of the salesperson for the builder, who, incidently, represents the builder, not the buyer.
A REALTOR also will help a buyer with other items of negotiation, like grass, trees, blinds, refrigerators, etc. They will help with the scheduling of inspections, negotiating repairs, lender issues and title paperwork. REALTORs are worth their value if you have a good one. This is true on resales and new construction. If you are considering buying a new home, use a REALTOR!! You will be better off.
I would love to help you if you are looking in the Katy, TX./West Houston areas for that home. You can find me at www.katyfamilyhomes.com. I am here for you. God bless.
Filed under: Buyers, Katy Family Homes, RE Transaction Information
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