I am buying new construction why would I need a real estate agent?
What could go wrong?
The onsite agent can help me, it is a brand new home there won’t be anything wrong with it.
I have heard these reasons and many more throughout my career and quite frankly it sticks in my craw.
That line of thinking can literally cost you thousands of dollars, a bit of your sanity and turn your new construction dream home into a nightmare in short order.
Onsite agents are helpful, they are nice, sometimes they are actually real estate agents sometimes they are not, they will act like your BFF, this is all true BUT onsite agents are more like police officers. They must write a certain number of contracts every month, quarter or whatever the builder has dictated in order to keep their jobs. So, there’s some incentive for them to be ‘nice and helpful’. More importantly, they DO NOT represent the buyer (a detail some of them choose to gloss over) they represent the builder, always, 100% of the time. In layman’s terms, they do not have your best interest at heart, no matter how ‘nice’ they are. Having an agent represent you and looking out for you, willing to fight for you is infinitely better than being 'nice'.
Most builders use their own contracts versus a state contract. They pay their attorney’s to draw up a lengthy (to date the longest I have seen was 88 pages beginning to end) contract that protects them every which way to Sunday. There is very little, if anything, in the builder's contract, that protects the buyer. I routinely see clauses like; the buyer’s agent cannot be present for a walkthrough, finance contingencies that are so short I wonder why they even bother to put them in the contract, the builder can delay closing for eternity with no penalty but if a buyer delays the closing they pay a per diem penalty (sometimes upfront), change order fees, builder can terminate the contract if they decide that the buyer is too upset about something etc.
I have seen a cadre of stipulations and verbiage that almost always amounts to nothing good for the buyer which is why I say to every client of ours that is considering new construction “I want you to be 200% sure you want to move forward, not 100%, 200% because once we sign and hand them money that’s it!”
I and my team spend time with our clients up front so that they understand all that can go right and what will more than likely go wrong during the process and this includes anything from delayed permitting, delayed construction, poor construction, back orders of materials, delayed closings, bad inspections etc.
Having an agent that represents you, that can explain the nuances of the contract, make sense of the contract so you clearly understand what it says, is vital.
Once you have written a contract and plunked down your money this is where the fun begins.
The first step is picking the options that go into the home and make it uniquely yours. Buyers select cabinets, flooring, faucets, lighting, countertops, showers, tubs, siding, elevation, all of the things that are fun when you are building your own home. This is also where the builder soaks you for more money. By soak I mean robs you. This is where the home you thought was going to be $325,000.00 turns into $400,000.00 in a matter of hours. Who can resist the shiny bright model home? They build the model homes knowing it will appeal to you and you will want all the upgrades that model home has. Having your (not the builders) agent guide you through this is will pay off in spades. An agent can help you stay on budget, not get carried away, help you understand paying the builder $600 for a ceiling fan is not a good use of money when you can do that after closing and save money or why picking the Italian marble is not going to make you more money in the future but will cost you mightily today.
Next, you should be scheduled for a pre-construction meeting with the builder, project manager or superintendent to review all the plans and the options.
Did you catch where the builder missed the exterior lights you paid for as an upgrade? Your real estate agent will.
Every contract is going to give the builder the exclusive right to decide where the house will sit on the lot, that is a guarantee, but what about grading? What about potential easement issues? What about setback lines? Where will the neighbor's house be on their lot? These are some of the questions a buyer will not think about most of the time, but your agent should. It is best to have a clear understanding of everything than to later come to the realization that the builder is not going to level the lot like you thought he would.
After several weeks go by and construction is set to begin, you are excited, you are telling your friends and family you are building your dream home. Every weekend you drive by to see how much progress they have made and you drive by and nothing seems to be going on, you drive by the next weekend nada, the next zilch and so on. The onsite agent is still super ‘nice’ and giving you all sorts of excuses. They blame permitting, they are backlogged, short on subcontractors etc. All the while, you are planning your move.
Having an agent advocate for you and get to the crux of the matter will help with your stress load. It also helps to have a professional on your side to ask the right questions, not just any question.
Finally, after what seems to be an eternity, the slab is poured. It has been 3 months since you signed your contract and they are just now pouring the slab. This happens routinely.
The onsite agent tells you to get ready, framing is imminent the builder is ready to schedule the pre-drywall walkthrough.
You are moving and grooving now!
It is also the time to have the home inspected.
Did the onsite agent tell you that? No. They represent the builder.
Why would you have the house inspected now?
Here is why. Over the years here are just a few of the items our inspectors have uncovered.
-mistakes in construction e.g., roofline
-nails vs screws and vice versa
- framing issue that almost caused a second level to be removed
Every issue just mentioned was not caught by the county inspector so it is not prudent to depend on them to do the inspection for your home. County inspectors look at hundreds of homes in a week and are primarily looking for code violations, not shoddy work.
Next week, I will cover what happens from here. Hopefully, you are getting the picture that many things can and often do go wrong and not having an agent help you navigate this, can be very costly.