You are NOT saving any money by NOT hiring an agent to represent you, ESPECIALLY when you’re considering building a new home. Let’s break down who’s on which sides of the transaction, and the roles each person is playing. In the event you are purchasing new construction, the builder actually is playing a dual role. Not only are they building the home, they are functioning as the “seller”, and the on-site sales agent (representing the builders sales office) is filling the role as the “seller’s” agent. It is easy to see what the primary job of this agent is; their role is to generate sales for their builder.
Now, when you hire a REALTOR® their entire job revolves around representing you, the “buyer”. They are there to advocate for you and your best interest, ensure you fully understand and are protected in the terms of any legal contracts, inform you of current market trends and offer their expert advice and opinions, as well as an overall effort to make the home buying process flow as smoothly as possible.
Now that you have a clear understanding of who is playing which roles, let’s get into some specific areas in the home buying process in which your agent will provide the most value.
SELECTING THE RIGHT COMMUNITY AND BUILDER
The first step in building a home is well … selecting which community is best for you and your family! With all of the growth we are seeing across Texas, there are TONS of new communities and developments going in every year, all with their own perks, layouts and builders.
*PRO TIP* It’s important to note that there is NO discount on the sale of your new home for not bringing your own representation! In fact, in the event that you visit model homes or tour new communities without your agent present, ALWAYS inform the on-site reps that you are working with and are represented by your own agent. This lets them know a multitude of things, but most importantly it tells them that you already have an industry professional advocating for your best interests.
Your agent will be able to assist you in selecting the right community for you based on things like location, school district, HOA amenities, fees and tax rates, what your timeline looks like for when you need to be moved in, and additionally making you aware of any “builder promotions” available to take advantage of.
They will be there to offer suggestions on which builder may be right for you, as not only does each builder have their own unique style and offered floor plans, but they each have REPUTATIONS, which can constantly be changing!
We all know how much things shifted back in 2020, but what you may not know is how much things are still being delayed due to lack of labor and supplies. It’s important to look at how builders responded to these setbacks, and how they conducted their business during those unprecedented times. Were they honoring their contracts, or cancelling and leaving their buyers with nowhere to go?
DID YOU KNOW?: There is a ‘cancellation clause’ in builder’s contracts outlining the terms under which they can back out of the deal. Some even have terms allowing them to cancel at any time if they find you to be a ‘hassle to deal with’, ‘annoying’, or a variation of other ridiculous phrases. An informed agent will help you to steer clear of such contracts, and point you towards honest and dependable builders.
It’s good to have an idea on what the CURRENT building schedule is for builders you’re considering, especially if you have a certain date you need to be moved in by. Ask questions like: “How are you doing with staying on schedule in the building process? Have you experienced delays or setbacks due to lack of labor or supplies? If so, how are you remedying those situations with buyers?”
*PRO TIP* Keep in mind that weather can also be a delaying factor that unfortunately no one has control over. Consider what time of year it is when you are signing a contract, and what that season may bring in terms of weather conditions. If you have a set date in which you NEED to move in by, it may be a good idea to have a back up plan in the event your home is delayed. Exploring temporary housing options is another area in which your hired agent will come in handy! 😉
SELECTING THE BEST LOT
Once you’ve selected the builder and community of your choice, it’s time to select your lot. Lot location is a HUGE aspect of building a new home that many people overlook. So much goes into selecting the best lot for your family! Consider things like: Is it within reasonable walking distance to the recreation center or pool? Is it backing up to a noisy, busy road? What is the zoning of the surrounding areas (industrial, commercial, residential)? Is there plans for new construction in those areas, and if so- what are they (car lot, shopping center, concrete plant, new roads, multi-level apartment buildings etc.,)?
One of the biggest things to consider and ask during these times of growth, in my opinion, is “Will the greenbelt behind me (that I’m paying top dollar for!!) be STAYING a greenbelt? What is the zoning of that space, and are there future development plans that could impact the area?”
Not only is the lot location important in terms of the above considerations, but it could also have an affect on things like: Will the driveway be sloped? Will I have stairs going down into my garage? What about stairs going up to the front door? Which sides of the house will be getting the morning and evening sun? (Will there be enough sunlight to grow a backyard garden or flower bed? Do you work nights and need to sleep during the day without the sun blaring into your window?) Are there utility easements or setbacks that will prevent me from installing a pool?
Even putting into consideration how long you are planning to live in the home for is important when selecting your lot! Lot location can play a huge role in whether your home sells quickly, and what price you will be able to sell for; will you easily recoup the initial investment you made when you built the home?
CONSIDER THIS: Say you paid the extra premium when building your home for the lot that backs up to a greenbelt, only for that space to be developed into a car lot a year later… Do you think you will be able to recoup the extra money spent on that premium lot when you go to sell?
WHAT YOU SEE IS NOT WHAT YOU GET
When it comes to the model homes being showcased in new communities, what you see is almost always not what you get in the base price. They may be advertising the community with homes in the $300,000 range, but the model home is well over $400,000. What causes this? Upgrades. Those model homes are FULL of upgrades! Everything from wood flooring, crown molding, built in bookshelves, granite countertops and top of the line appliances; you name it, it’s in there!
*PRO TIP* Before walking into the design studio to select your upgrades, sit down and make a clear list of things that are a must in your new home, and things that would just be nice to have. This will help you to stay on track with your initial plan (and budget!) without getting caught in the trap of never ending upgrade options and beautiful samples.
With what seems like an endless array of upgrade and modification options to choose from in the design studio, your hired agent will be there to guide you in making the most informed choices to keep you on budget, without sacrificing style and preference. They may have some insight on which upgrades and items are better to have the builder install, and which could be done easily later on, perhaps for a lower price. Your agent will also be able to educate you on which upgrades will appraise for more, therefore increasing the value of your home and helping you recoup the initial investment when you sell in later years.
LET'S GET DOWN TO BUSINESS
Did you know that builders actually hire their own attorneys to draw up their own contracts, instead of using the standard TREC (Texas Real Estate Commission) contract forms used in most real estate transactions?
With that being said, when you have an agent representing you, not the builder, they can review and discuss all contract terms with you prior to signing to not only ensure you fully understand the commitment you’re making, but that everything is stated correctly, and you are appropriately protected in the event something goes wrong. Likely, your agent will be a little more familiar with all of the different terms used in real estate contracts, and they may even be more comfortable asking and negotiating certain clauses.
For example, things like: “who is paying for the survey, who is paying tax prorations, and what happens if one party backs out?! (Remember when we talked about supply chain interruptions, delays, labor shortages and builders cancelling contracts?)
These terms and more should be clearly stated in the contract, and in the event they are not, your REALTOR® will make sure they are added before any signatures are drawn.
Now, when it comes to negotiation, even the best negotiators will tell you that it is much easier to negotiate for someone other than yourself, as you are not emotionally tied to the scenario. The same applies in real estate. Your agent will be looking at the transaction from a dollars and sense perspective without being swayed by emotions. In a scenario where you may just throw the towel in and say “okay” if it means getting one step closer to your dream home, your REALTOR® will see to it that the terms remain fair and reasonable.
A good agent will know beforehand what is and what is not on the table for discussion, which as you can imagine varies by builder. This allows them to better broker on topics like paint color, upgrades, style of utilities, closing costs, and other fees. Builders are unlikely to reduce the price of the home, as it sets the comparison price for future home sales in that neighborhood. However, many builders will include free upgrades, a warranty, and even cover closing costs. It all comes down to negotiation.
MONITORING & DOCUMENTING THE CONSTRUCTION PROCESS
Perhaps your agent’s best trick is the fact that they will be meticulously documenting every single paper, change order, text, material selection, email, upgrade, and conversation pertaining to your new home. This is more of their efforts to ensure you are represented, advocated for, and protected in the deal. Allow me to paint a picture for you of a possible (and more common than you might think) scenario buyers could find themselves in:
You just left the design studio after spending hours looking at tiny samples of tile, flooring, paint colors, cabinetry, door knobs, the list goes on … You’re equally excited as you are exhausted.
You get in the car and scramble to turn the air conditioning on, tossing the HUGE stack of papers they gave you outlining all the selections you just made for your new home, right in the back seat… never to be seen all together again…
Now, fast forward several weeks and you happen to pop by the construction site and notice that they are installing the WRONG bathtub.
The one they have is NOT the beautiful, modern, freestanding tub you selected and paid EXTRA for way back when… NO…
You mention that it’s incorrect and they challenge your complaints and ask for proof.
You think back to that day after hours of selecting, when you tossed those papers mindlessly into the back seat…
Do you really think they’re going to just take your word for it without any documentation or ANYTHING other than saying you selected this not that? Trust me, it’s not going to happen…
But luckily you call your agent to let them know the situation. They say, no problem, I’ve got those papers right here, signed and dated.
They then contact the building superintendent and what do you know? Bathtub replaced; crisis averted.
You would be surprised with how many small mistakes similar to this can happen during the construction process. Just think about how this bathtub situation could have turned out if you didn’t have an agent representing you, not the builder, or if you weren’t able to personally monitor the job site?! What if you lived out of town, or worse, out of state? Things could have turned out very differently…
Now, with that all being said: not only will your agent be keeping every piece of paper pertaining to your home, they will also be closely monitoring the job site and typically stopping by 1-2x a week to make sure things are moving along on time and looking exactly how they should be, all while sending you updates along the way!
Don’t let the long list of things to consider and be aware of scare you away from buying new construction! Remember that your hired agent is an expert in this field, and is there to represent and guide you smoothly through the entire process!
Are you interested in exploring new construction opportunities in the Texas Hill Country?
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