Buying a brand new home can be an exhilarating experience. Sometimes builders will let you be involved in the construction process, making tweaks to the design or layout that meet your family’s needs. Almost always, you’ll be able to have a say in the finishes—like the cabinetry, lighting and paint schemes. New construction gives homebuyers the opportunity to add their personal touches before they even move in!

But some homebuyers get so caught up in the excitement of buying a brand new home that they make a major mistake: not hiring their own real estate agent.

Most buyers assume that the builder’s rep will help them purchase their new home. They might also (falsely) assume that working with the builder’s sales office will save money. This is because builders’ agents frequently promise customers a number of “discounts” (e.g. a lower purchase price or closing cost assistance) if they buy directly through the sales office. The sales rep might also offer to connect you with the builder’s lender, who – if you use them – might be able to get you a mortgage at a lower rate with fewer fees.

Lower costs and a streamlined closing process – seems like a no brainer, right? Wrong! Buyers of new construction should always use their own real estate agent. Here’s why:

  • There are two types of real estate representation in the State of Florida: a Single Agent and a Transaction Agent. A Single Agent is a real estate broker who represents either the buyer or seller of real estate, but not both in the same transaction. It is the highest form of representation because it ensures the real estate interest has only their clients’ interest in mind. A Transaction Agent provides limited representation to a buyer, a seller, or both – but unlike a Single Agent, a Transaction Agent does not represent either in a fiduciary capacity and only has a limited obligation to protect either party’s confidential information.If a builder’s rep is offering to facilitate the sales transaction for you, this means they’re serving in the capacity of a Transaction Agent. When you use a Transaction Agent, you are foregoing the undivided loyalty and guidance you’d get from having your own Single Agent. For instance, if you put a $460,000 offer in on a home listed for $495,000 but tell the Transaction Agent that you’re willing to go as high as $479,000, the Transaction Agent could inform the seller that you’re willing to pay more than what was written on the contract. A Single Agent would not be able to disclose that information because they are representing your best interests.

Let’s use a simple basketball analogy to drive this point home: a Single Agent is like a coach; a Transaction Agent is like a referee. With the clock ticking down during a championship game, your coach can call a time out to advise the team on how to run its final play. The referee cannot call a time out for you because they are managing the game for both sides. Buying a home is a huge financial commitment—you’re going to want to have a coach on your side.

  • Using a Buyer’s Agent (acting in the Single Agency capacity) ensures you have someone with knowledge and expertise by your side through the entire home buying process. They’ll help you with a range of activities, including (but not limited to!): touring multiple properties, submitting an offer, negotiating a sales price and other concessions, arranging a home inspection, and setting up the closing. The home buying process can be daunting, especially if you’re buying a new build where last minute changes and surprises are common. An experienced agent will know how to navigate any unexpected complications to ensure the deal moves forward in a timely manner.Consider this scenario: During the final walk-through before closing, you see that Maytag appliances were installed because the Viking appliances you picked out (and paid for!) were backordered. The builder’s rep might brush this off or try to justify the change in one way or another. Using your own agent ensures you have someone fighting for an appropriate remedy – like finding a new supplier of the appliances you wanted, or negotiating a credit to make up for the difference in cost and quality of the appliance that were ultimately installed.
  • Builders’ contracts can be long and complicated. You’ll want an attorney to review these documents before signing a Purchase and Sales agreement, but with new construction, a buyer usually does not have an opportunity for an attorney review until after they submit an offer (which is a legally binding agreement!). And of course, the contracts are usually written with the builders’ best interest in mind. Most also include language that states something like: “You cannot rely upon the verbal representations made by the builder’s agents or representatives.” – and even the most well-intentioned transaction brokers sometimes misinterpret or overlook important clauses in the builder’s contract. A Buyer’s Agent, particularly one experienced with new construction, will know what questions to ask and what clauses to look for before you submit an offer, and will likely include language in the offer that states the offer is contingent upon your attorney’s satisfactory review of the builder’s contract and related documents.
  • A Buyer’s Agent will advise you as you sort through options and upgrade alternatives. Sure, you have your own style and preferences. But someone who is inexperienced with home building may not fully understand what upgrades are worth it, or which will have the greatest impact on the home’s resale value. For example, you may not need a 3-car garage but if 80% of homes in the area have this feature, you’ll probably want to spring for the upgrade to protect resale value down the line. Similarly, if you aren’t planning to stay in the home for more than a few years, you’ll probably want to pick finishes that are appealing to the masses – even if that means you’ll have to forego the trendy gunmetal cabinets you had originally picked out.
  • What about all of those “discounts” the builder’s sales rep offered you? Well, it turns out that many of those “discounts” aren’t really discounts after, all. The “cost savings” are typically baked into the price elsewhere, through things like higher sales prices and marked up fees on the front end disguised so the sales rep can offer you “discounts” on the back end. Using a Buyer’s Agent can actually save you even more money when all is said and done.An experienced agent can help you negotiate a more favorable sales price, and will know when (and how) to push and pull against the builder to secure other concessions. Your agent might be able to get all of your closing costs covered, or might be able to convince the builder to install upgraded finishes, a brand new washer and dryer, and big deck off the back of the house for you at no additional cost. Most buyers don’t realize that there are all sorts of features like these that are negotiable, whereas experienced agents follow a general rule of thumb: You can’t get what you don’t ask for! A Buyer’s Agent will always give it a shot for you, and conversely – will advise you if your demands are too extreme and threaten to put the deal at risk (which is particularly important if you’re in a competitive sellers’ market like we are today).
  • A builder’s agent’s job is to know the ins-and-outs of the product they’re selling; a Buyer’s Agent’s job is to get to know their clients and understand their needs. For instance, when working closely with a Buyer’s Agent, your agent might learn that you’re a teacher in the local school district. Why does this matter? Well, if your agent knows that then they can tell you about a special program for teachers that will provide up to $5,000 in closing cost assistance and helps you secure below-market rate financing! Transaction Brokers are much less likely to get to know individual parties, and are often less familiar with local programs to assist homebuyers.

There are so many benefits to using your own agent when purchasing a new build. If somehow you aren’t convinced just yet, here’s the icing on the cake:

  • Hiring your own agent doesn’t cost a thing! Most buyers don’t realize that it is standard practice for both the buyer’s agent, seller’s agents and/or any transaction agent to be paid their commission by the seller. In the unlikely event that the builder is unwilling to pay a commission to buyers’ agents (typically, equivalent to 2-3% of the property’s sale price), you can negotiate that fee be deducted from the sales price so you can pay your agent directly.

As you set out on your home search, remember that not all agents are created equally. Spend some time interviewing agents, and look for someone that has experience with new construction. Ask them specific questions, like how many new construction homes they’ve sold in the past, and whether they have relationships with lenders who specialize in new construction loans. Ask them to tell you a story about once new construction purchase that was going sideways, and how they worked to get the deal back on track and ensure a happy new homeowner. How confidently they answer these questions will tell you whether or not they really have experience in new construction.

And why is new construction experience so important? Well, an agent who has sold new builds will be able to give you advice on the contractor’s workmanship, and will be able to point out whether any corners have been cut. They’ll be able identify any “builder fallacies” about pricing and area information, taxes, etc. And they’ll know how to negotiate warranties and other buyer protections that are common when purchasing newly built homes.

Buying a home is one of the biggest investments of your life. Protect yourself by hiring your own agent to represent your best interests throughout the home buying process. After all, you have nothing to lose!