If you’ve ever lost prospective buyers because they opted to purchase a new construction home – especially when you’ve just helped them sell their existing home – it’s time for you to take a look at your potential role within the new construction market.
A savvy real estate agent can make a major difference to buyer clients during every phase of a new construction purchase, especially when buyers are facing long lead times between their initial agreements with the builder and closing. You may be able to help buyers save money, even if they’ve already begun negotiating their home’s price with a builder. And that’s just for starters.
But … what about the builder’s agent?
You may be thinking your services won’t be relevant or valuable to the typical new construction buyer since their builder has already assigned them to an internal agent. In addition, the builder’s agent has probably already met the buyer and made assurances that the transaction will be simple and stress-free from start to finish.
By now, you may be wondering how or where you fit into this equation. It’s time for you to take a minute to think about the relationship between a home buyer, the builder, and the builder’s agent.
Here’s how the typical buyer-builder relationship begins. After the buyer tours a number of model homes and chooses the model they want to have built, the builder’s agent takes charge of the purchase. While these agents perform important duties, such as assisting new customers with initial documents and helping them choose custom features, they don’t work for the buyer – they work for the builder.
And part of their job is to ensure the builder earns maximum profits from every home they build.
If this sounds like I’m vilifying builder’s agents or suggesting they aren’t necessary, I’m not. They work hard to make sure buyers end up with their dream home. But homebuyers have their own set of priorities, including the price they pay for their new home. This is when your independent advice becomes valuable to buyers.
In addition to understanding and appreciating their point of view, you have the negotiating skills and market knowledge required to handle almost any problem that may arise from contract to closing.
Here are some new construction situations where you can make a big difference to buyers.
It doesn’t matter if your buyers have already chosen their upgrades, as there’s probably plenty of time to help them make their dream home even dreamier. You can help them negotiate extra perks and higher-grade materials at the lowest possible price. Real estate agents with new construction experience report that they’ve helped borrowers upgrade everything from paint colors to exterior styling.
Overseeing walk-throughs and inspections:
Some buyers are so eager to move into their new home that they’re tempted to skip having the property inspected – especially if they’ve been visiting the site during construction. Builders almost always offer walk-throughs during the construction phase when it’s safe, and a final walk-through before the buyers sign off on the completed home. But a final inspection conducted by a reliable, independent home inspector will guarantee real peace of mind for your buyers.
If buyers balk at this expense, remind them that while residential builders take pride in their work, it’s possible for defects to happen. This could be due to honest mistakes. Perhaps a contractor didn’t use the right quality of materials, or a tradesperson didn’t install electrical wiring or plumbing correctly.
There’s also a good chance that your builder is understaffed, which can also contribute to defects. Again, this isn’t necessarily the builders’ fault, since this problem has been reported by a growing number of builders over the past years
Title and insurance requirements:
While these are often recommended by the builder’s agent, you’re probably familiar with more title companies and insurance agents. This means you can assist buyers with shopping for third-party vendors, so they’re assured of choosing the best fit for their finances, new home, and personal preferences.
While some builders work with “preferred” lenders that the buyer’s agent will recommend, buyers will almost always be happier when you assist them with getting a second opinion. Be sure to refer them to a lender who can offer a wider array of options.
Compass Home Loans offers a multitude of home loan options that can be used to finance a newly constructed home. In addition to conventional conforming loans and jumbo loans for more expensive homes, we have home loans that require a small down payment. Veteran and active-duty servicemen and women and can use their VA benefits to purchase a newly constructed home.
Apr 06, 2020