Do I really need a Realtor when I buy a new home from a builder?

If you have ever walked through a beautiful new home model unit and felt the sense of "ahhhh..." and desire to call it your own, you may be asking yourself this question.

"Do I need a realtor to buy this home?"

Of course, the answer is "YES!", but here are a few reasons to consider buying a new build as well as why having representation is so critical.

Colorado continues to grow. From 2020 to 2022, it population grew 1% to 5.84 million.* Axios Denver

It is estimated that up to 30% of home purchases currently in Colorado are new builds, which means there are many buyers interested in these homes.

And while projected permitting for new housing in 2022 was 15 percent higher than in the previous 5 years, it is starting to taper off which will continue to limit inventory. *Common Sense Institute

According to New Homes Source, in Colorado there are currently:

• 69 Builders

• 426 Communities

• Starting Price Point of $295,000

• 7 / 55+ Communities

Interest Rate Incentives:

With home Builders offering significant incentives and some of the best interest rates at 5.49% (Toll Bros) to 5.75% (KB Home), for many buyers, these interest rates are necessary to qualify to purchase, so they make it possible to buy in a high interest rate market. In fact, a new build home might even be their only option as they need the lower interest rate to qualify for a loan.

And maybe the most important reason to have representation, is that it does not cost you anything additional. In Colorado, Sellers and Builders pay the co-op buyer representation commission.

So why would you not want someone who is loyal to you and can help advocate for you throughout the purchasing process?

Would you go into a court room without a lawyer?

It is simply always a good idea to have someone on your side when purchasing a home.

The Basics:

Have Someone on Your Team that is Loyal to You

While many home builders have great sales people working in their offices of which I can testify because I happen to be married to one of them :) , they work for the builder. Builders have their own contracts which differ from your local state contracts and are written to protect the builder - not the buyer, so it is important to have someone to read through the builder contract and help explain the terms and conditions for you to be able to make informed decisions.

Expertise and Market Knowledge:

Professional real estate agents possess comprehensive knowledge of the local housing market, including new developments, pricing trends, and the reputation of builders. They can provide invaluable insights into the quality, value, and future potential of a new build home. Their expertise ensures that buyers make informed decisions, helping them avoid common pitfalls and negotiate favorable terms.

Access to Exclusive Listings and Opportunities:

Real estate agents often have access to exclusive listings and information about upcoming new build projects before they reach the general market. This advantage can provide buyers with early access to desirable properties, increasing their chances of finding their dream home. Agents can guide buyers through the selection process, ensuring they explore a wide range of options and find the best fit for their needs and preferences.

Skilled Negotiation and Representation:

Negotiating with builders and developers can be a complex and intimidating task, especially for buyers who are unfamiliar with the nuances of the construction industry. Real estate agents have experience in negotiating and advocating for their clients' interests, whether it be negotiating price, upgrades, or contract terms. Their ability to navigate these negotiations helps buyers secure the best possible deal, saving them both money and potential headaches down the line.

Assistance with Complex Documentation:

Purchasing a new build home involves extensive paperwork and legal documentation. A real estate agent can help buyers understand and navigate these complexities, ensuring that all necessary documents are in order and deadlines are met. Agents have a keen eye for detail, which helps prevent any oversights or legal complications that could arise during the transaction.

Guidance throughout the Construction Process:

This is important! There are multiple inspections along the way throughout the building process.

From the initial contract signing to the final walkthrough, real estate agents provide guidance and support throughout the entire construction process. They can help buyers understand the various stages of construction, coordinate with builders and contractors, and address any concerns or issues that may arise along the way. This important assistance helps buyers feel confident and informed throughout the construction journey.

And if something comes up during those inspections, then you have someone available to you to help navigate the process and get a resolution to protect your interests.

In my experience, there have been multiple inspections during which both Buyer and I noticed issues and had questions and requests for the Builder to fix prior to closing such as water leaks, structural questions, plumbing corrections, cosmetic issues, and many more.

Does it cost me more?

NO- it does not. The builder pays the commission of which will be stated in both the MLS (Multiple Listing Service) and in your Exclusive Right to Buy Agreement with your agent.

Some buyers may think they can negotiate better terms if there is not a realtor for the seller to pay, but very often this backfires for the buyer in that they may even end up paying more than they would have by not having someone to negotiate on their behalf, or been aware of additional fees that may have been avoided.

Will there still be surprises?

As always, having an agent does not guarantee there will not be hiccups or surprises along the way as nearly every real estate transaction has its own curveballs to navigate. However, when they do come up, it provides much reassurance to buyers to have someone in their corner.

When purchasing a new build home, the expertise, market knowledge, negotiation skills, and overall support provided by a real estate agent cannot be overstated. Their guidance and representation can make a significant difference in ensuring a smooth and successful home buying experience.

By utilizing the services of a real estate agent, you can navigate the complexities of the new build market, secure the best possible deal, and embark on your homeownership journey with confidence, not to mention sleep better throughout the construction process.

Basically, if you can have a professional advocate in your court, why wouldn't you?

If you would like to discuss buying a new build, please contact me to talk through your goals.

email: rachel@rgoodliving.com