Buying a new construction home

By: Kari McCoy
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Dear Kari,

My husband and I are going to be buying a new construction home. My bother said that we should use his agent, but as we understand this is not necessary. Please offer us some advice on this subject.



Your brother is correct; no one is required to have your own agent to buy a home from the builder. However, make no mistake because you need your own agent from the get-go. Even if it seems easy to sign up with the builder's on-site agent, you're going to want someone representing your side of the deal.

To begin with when a buyer first enters the builder's sales office they are welcomed by the pleasant cheery sales agent onsite at the model homes. Most folks might not know that this agent represents only the builder's best interest and gets paid from the builder. The builder's agent’s job is to get the builder the most money in the fastest time frame with the least amount of holding costs. The builder's agents are well skilled and may practice high-pressure tactics to get the buyers to sign the contract. They will not point out any drawbacks of a property or poor home locations, such as backing up to a future busy road. The builders agent is obligated by law to the keep the builders' best interest in mind, not the buyers. Therefore there is no one to look out for the buyer’s best interest.

Here comes the exciting news: Most home builders pay for the buyers to have their own real estate agent. Some buyers believe using the builder's agent and not having their own agent will save them money. They also believe that it will possibly get them a better deal cut on the price. This is not the case. The builder is in the trade of making profits and has previously allotted marketing dollars to pay each buyer's agent a commission.

Legally a buyer cannot receive a commission or a discount passed to the buyer unless the buyer is a real estate agent. If you are not using your own real estate agent, then the builder simply receives extra profit on that home. Bear in mind that there is no gain of not using your own real estate agent.

When you have your own real estate agent this is referred to as a relationship of fiduciary responsibility. This fiduciary relationship holds your real estate agent to the highest standards working for you. 

Here is what your agent will help you with that you might miss out on if you stick with the builder’s agent:

Extras negotiating: Perhaps upgraded counters or appliances in that new home? Your agent can help you with all those extra perks, amenities, and upgrades. Often negotiate with the builder on things like extra land sliding or paint color or even the style, especially if the housing development is in the beginning stage.

Help with financing: A builder usually has their preferred lender and sometime on site the project. Your real estate agent can help make sure that you are getting the mortgage that works best for your situation. Shopping around is always a wise choice. 

Overseeing a home inspection and attending all soft shoe inspections required by the buyer: Your Realtor will encourage you to have a home inspection of your own at the end of the home being completed.  Do not miss out on your right to have this option. You would be surprised at the number of new home defects on the rise.

Most important of all is to take note that most builders have a stringent rule that they will never waver; in which your real estate agent must accompany you to your first visit to the model or you will not be eligible to use your own real estate agent.  Once you and your real estate agent are registered the builder will then allow you free representation and to visit on your own as many times as you want.

With the choice of having your very own seasoned real estate agent (at no cost to you) working in your corner is the best free lunch in town. Be wise to seize the advantage of this immeasurable opportunity!

Kari McCoy, CRS, owns the Kari McCoy Group, Residential Real Estate, at Lyon Real Estate #00841588.  She can be reached at 916-933-5274 or