Why Have a REALTOR® When Buying a New Construction Home? Video
Working With Real Estate Agents (Who Works for Who?)
True story. Because of the popularity of the Roger Holloway YouTube real estate channel, I get lots of calls from people relocating to Charlotte. Not that long ago, I had asked the caller who their real estate agent was, and they mentioned the name of an onsite agent for the Builder. I know so many of the new home salespeople (all I do is new construction these days) and recognized the name. I explained that the person they mentioned was not their agent, they were the Builder's agent. They said, "Oh, no, that's the person who's helping me." Bottom line was that they did not have their own Buyer's Agent REALTOR® and therefore they did not have any representation in the transaction.
And even though the Real Estate Commission instructs us to explain the laws of agency and who works for who, the onsite agents almost never get the "Working With Real Estate Agents" consumer awareness brochure into the hands of the buyer until they go to the contract signing. By that time, the unsuspecting buyer has had no buyer representation at all, while the Seller/Builder had complete representation from the onsite agent.
You DO Need a Buyer's Agent REALTOR®
Yes, you do need a Buyer's Agent REALTOR® (and you deserve to!) who represents your best interests in the purchase of your new home. Yes, you need an advocate to guide you through the many moving parts of a new construction purchase. That's what I do. That's what my team of Broker-Partners do. And my YouTube video in this blog post introduces you to several of the top REALTORS® in Charlotte.
Just make sure that you identify to them at the first contact, that you are hiring a Buyer's Agent. You're welcome to identify me as your agent, and in so doing, you're inserting what I call a placeholder there.
The Onsite Agent Represents the Builder (Not You!)
Don't be deceived that the cute, nice, friendly real estate agent sitting in the Model Home is acting on your behalf. They work for the seller, the builder. Even the online sales counselor who can be quite helpful works for the builder. Yes, that onsite sales agent can certainly sell you a house (and NO, you don't get a better deal because you're there without your own agent). In fact, their entire goal is to "get you on paper" and in so doing, secure their employment and get paid. And they just saved their company the expense of paying your Buyer's Agent.
But, think about it. What if that particular builder and community is not what's best for YOU? You see, that onsite agent can only help you buy a house there, but having a Buyer's Agent opens up the possibilities to ALL the builders. The only thing a good Buyer's Agent cares about is helping you get what you want and at the best possible terms. Period.
The Builder is Happy to Pay YOUR Buyer's Agent REALTOR®
So, when I mentioned that not having a Buyer's Agent saves the builder the expense of paying your agent, that's true. But, homebuilders know that it is customary to compensate both agents. Remember when you listed and sold your home? Your listing agent was working for you to get your house sold and in the commission, they charged you, they committed to pay the Buyer's Agent of whoever came along with an offer to purchase. In other words, you as the Seller paid both agents. Likewise, the Seller/Builder is happy to pay both their onsite agent and your agent, as well.
"But, I Can Get a Better Deal If I Don't Have a REALTOR®"
Keep in mind that I began my journey into the world of real estate in 2002 as an onsite agent for the builder, myself. And yes, it's a common misconception that not having a Buyer's Agent to pay a commission to should result in a better deal. But, think about what a bad idea that would be for a builder. If word got out to the real estate community of agents that a builder was offering a discount to cut them out of a deal, it would end badly for the builder.
With that in mind, the builders know what percentage of their new home sales involve paying a Buyer's Agent and what percentage doesn't. So, they price their homes in such a way to account for that. Makes sense, doesn't it?
Tell the Builder You Have an Agent Upfront
I have the honor of working with some other excellent REALTORS® on my team. We are full-time agents and work very hard to educate and expose potential clients to the entire local market. Many of you have appreciated how I use YouTube video tours to do just that.
Having said that, just make sure the builder knows that you want buyer representation and you're welcome to say the Roger Holloway Team at ProStead Realty will be representing you. With most builders, you should be able to specify which of my team you'll end up with.