Searching for a brand new home, like a brand new car or even a brand new sofa is a great deal of fun. Let’s face it, shopping is fun. Most of us work hard for our money. We’ve earned the right to enjoy spending it!
If you’re looking at brand new construction, you don’t have to depend upon your agent’s schedule to set up an afternoon of house shopping. This ease of “window shopping” (visiting model homes) leads many buyers to believe that due to the fact that the home builder has an on-site agent who can “fill in the forms” for them, they do not require a buyer’s representative to represent them. You might be wondering why you need a real estate agent for new construction. Bear in mind that filling out and submitting paperwork is the least of what a good sales representative does.
Below are four reasons to always have your own Realtor to represent you when buying brand new construction, be that a condo unit, townhouse or single family home.
Levelling the negotiation field
If you rely on the builder’s representative to negotiate with the builder on your behalf, to give you the best price, tell you about the free upgrades, show you the hidden fees…if you think the builder’s sales agent is going to do that for you, you may be in for a big surprise. The home builder’s representative isn’t required to do any of that. You are a customer. Buyer beware.
The builder’s sales agent cannot lie to you, but they do have to disclose to you many things that you may not think to ask about.
It is your agent’s job to understand if the property is priced correctly, if sales have been slow, if free upgrades can be included, if certain fees can be excluded… It is your agent’s job to see if you might be able to obtain a much better deal. The best thing about all this is that your agent’s fees are paid by the seller so there is definitely no reason not to have one!
They won’t take the saved commissions off the price of your home
I sometimes still hear potential home buyers say that they would rather work without an agent due to the fact that they think the buyer’s agent commission can be used as leverage for negotiating a lower price. They say this due to the fact that they have never read a listing agreement. In the basic listing contract, it specifies that the seller’s agent is paid the entire commission then later on in the document it defines how much is shared with the buyer’s representative. If there is no buyer’s representative, in accordance with the contract, the seller is contractually bound to pay the entire commission to the seller’s agent. It does not get handed down to the purchaser.
So you won’t pay less since you do not have a buyer’s representative. You could pay more. The builder’s representative has sales targets that he or she has to meet. The seller’s agent is the one who is paid bonuses or incentives when they meet a specific sales objective. They work for the builder not for you. They work for themselves. Not for you.
Realtors are sales reps but sales reps are not Realtors
Realtors can be builder sales representatives but builder sales representatives don’t have to be Realtors. Although real estate agents may not be held in the highest regard by some members of the general public, we are held to a higher standard than regular sales people. We are licensed and governed and can be fined or lose our licenses if we do something wrong – and the Ontario Real Estate Association takes consumer complaints very seriously! Regular sales people can sell sofas or stereos or condo units or kitchen blenders or timeshares in Costa Rica. They are not held to any professional standards at all.
Advocates, supporters, experts and recommendations
The typical home buyer has a very limited understanding of the many things that can go wrong in a real estate transaction. There are lots of moving parts, regulations that govern all those parts differently and numerous professionals are involved in the deal: municipal government employees, the developer, the home builder, the builder’s representative, loan officer, loan processor, underwriter, appraiser, lawyer, paralegal, home inspector… It doesn’t take much for one deal to unravel. Your agent is the one person completely on your side that can help handle all these various people with their various demands and all of the pieces of the agreement.
You will require advice from the experts above and your agent will be able to recommend trusted service providers. Your relationship with your agent extends to the relationship he or she has with his or her professional connections.