Do I need an agent when buying from a builder?

By: Kari McCoy
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Dear Kari;
My husband and I are looking to buy a brand-new home. We have heard that we do not need our own real estate agent because the builders have agents on-site that are more familiar with the properties. Can we use these sales agents or do we need to bring our own agent?


Welcome to the interesting world of real estate and thanks for your excellent question. You do not have to have your own real estate agent to buy from the builder; that is correct. However, let’s look at some worthwhile reasons why it is highly recommended for a buyer to use their own real estate agent.

When a buyer first enters the builder’s sales office they are welcomed by the pleasant sales agent on-site 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. This agent’s job is to get the builder the most money in the fastest time frame with the least amount of holding costs. These agents are well skilled and may practice high pressure tactics to get the buyers to sign a contract. The builder’s agent will not point out any drawbacks of a property or poor home locations, such as backing up to a future busy road. The builder’s agent is obligated by law to the keep the builder’s 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 even get them a better deal or cut on the price of the home with the builder. This is not the case. The builder is in the trade of making profits and has previously allotted marketing dollars to pay the buyer's agent a commission. In the event a buyer comes along without their own agent, typically the builder’s sales agent may receive an extra bonus or the builder will pocket a bit more money to spend on marketing. Legally a buyer cannot receive a commission or discount passed to the buyer, unless the buyer is a real estate agent. Bear in mind that there is no gain of not using your own real estate agent; seize the advantage of this immeasurable opportunity. 

Here comes the sneaky part – most all builders have a stringent rule in which your real estate agent must accompany you on your very first visit to the model home, or you will not be allowed to use your own real agent at all. After you and your agent are registered with the builder you are then allowed to return as many times as you want with or without your real estate agent.  

When you have your own real estate agent this is referred to as a relationship of fiduciary responsibility. This relationship holds your real estate agent to the highest standards. The fiduciary duties include loyalty, obedience, disclosure, reasonable care, diligence, confidentially and accounting. Keep in mind that the sales price is not the only number to be negotiated in the purchase. There are thousands of dollars of costs, fees and upgrades associated with a new home purchase. Your real agent will help you negotiate, understand costs better, and have your best interest all the way to the closing of your new home.

This information is believed to be true and is used only to answer a question. For legal advice contact your local real estate attorney.

Kari McCoy owns the Kari McCoy Group, Residential Real Estate, at Lyon Real Estate. 

She can be reached at 916-933-5274 or #00841588