Lunnon Realty

By Mandy Lunnon-Wier, Realtor, Lunnon Realty

Shiny counters, new floors, soft-close cabinets, fresh paint, modern finishes chosen by the home owner. The appeal of buying a brand new home is undeniable. Aside from the cosmetic benefits, many home buyers perceive a new home to have lower maintenance requirements since everything is, well, new.

From a real estate market perspective, new homes can be easier to compete on than a resale home. There is often more inventory in a new community, meaning few to no competing offers, and for people who get squeamish about negotiating price, there is very little opportunity to negotiate with Builders. So if its so easy to buy a new home, why do you need to work with a Realtor? Turns out, there are many reasons:

1. 1. Someone is working for YOU. This is easily the biggest benefit to working with a Realtor on the purchase of your brand new home. The on-site sales staff is employed by the Builder, not the buyer. They don’t only want you to find your new home, they want your new home to be by this builder in this community. They aren’t able to show you homes by other builders or in other communities, which can be detrimental if you are shopping for the best “deal.” As in most home purchases, the Realtor is paid by the listing party – in this case, the Builder – so you’ll have solid and sole representation without paying extra for it out of your own pocket.
   2. Your Realtor is held to a code of ethics. Often times, salespeople who work for builders are not licensed real estate brokers, which means that they aren’t governed by the Colorado Real Estate Commission. They are not required to use Commission approved contracts and forms. Their contracts are almost always prepared by the Builder’s attorneys, and are difficult to understand and highly biased towards the Builder. While it often isn’t possible to change the contract language, it is critical to understand it – and a Realtor can help explain it. Additionally, salespeople aren’t Realtors, a group of elite real estate brokers who are held to an additional code of ethics developed and enforced by the National Association of Realtors that you can learn about here.
   3. Some items are negotiable. It’s true that there isn’t much room for negotiation in a builder’s set price since negotiating the base or list price of a home may hurt the builder in future negotiations. However, what you get for your money is sometimes flexible. An experienced Realtor may be able to negotiate upgrades, appliances, a lot premium, or lender paid closing costs to get you the most bang for your buck. Since your Realtor is working only for you, you never have to worry if your best interest is being considered.
   4. You need to sell your house. No, this isn’t true for every buyer, but often times you need to sell your current house to have funds to purchase your new home. Some builders allow you to sell your current home as a condition of purchasing your new home, meaning that if your old home doesn’t sell, you will not lose your earnest money on the new home. There are often many stipulations around these types of contingencies, and the impact of not understanding your obligations as the buyer could be costly at best, and legally challenging at worst. Your Realtor will (presumably) be involved in both the purchase of your new build and the sale of your current home, and they’ll use their expertise to align the dates, deadlines, and goals of all parties in both transactions.
   5. Someday you’ll sell. Someday you’ll move on from your brand new home, even if its hard right now to imagine wanting to leave such a serene place. You’ll have lots of decisions to make when building your home – should we have three bedrooms or two bedrooms and a loft? Is it “worth it” to finish the basement? Tile or linoleum? Carpet or hardwood? A Realtor can help you understand the current market’s appetite for upgrades and finishes, allowing you to make decisions that will work for you now, and pay off in the long run.
   6. Access to trusted professionals. Builders often times have preferred lenders, title companies, and other professionals that you’ll work with through your contract period, closing, and beyond. However, it is always a good idea to compare rates and risks/benefits of several different service providers. A connected Realtor can offer referrals for a myriad of services, so you are able to make a very informed decision about the professionals you trust to guide you through the biggest purchase of your life.

Are you convinced?

Your next step is to visit the model homes and Builder’s sales office….but don’t forget to take your Realtor with you. Most Builders require that buyers register with their Realtor, or “Agent of Record,” at their first visit to the Builder’s office. As a side note, they are generally also required to be there two other times with you – when you sign the purchase agreement and at Closing. Call your Realtor when you are considering your new purchase so they can start working for you from day one.