So, if you're having a home built, what are the consequences of not using a Realtor? I learned from experience, and I want to share my knowledge with others. Currently, I am a Realtor, so you may think that I'm biased. However in 1998 (prior to becoming an Agent), just like many of you, I did not use a Realtor when I had my 1st home built. I thought the person in the model home would look out for my best interests. Below are some real life examples explaining what can happen if you do not hire a Realtor to represent you.
1. Pay too much for the house – Realtors are in constant contact with builders about special promotions that are going on. You may not believe this. But, I know a buyer that went to a builder, and the sales agent in the model home quoted a high price. However, the Realtor knew that the builder was offering a promotion, and the price was actually supposedly to be a lot less. If the Realtor was not there, the home buyer would have overpaid for the house.
2. Negotiate the Contract – One thing to always remember is that the sales agent in the model represents the builder, not you (the buyer). Therefore, their job is to negotiate the contract in the best interests of the builder. If you hire a Realtor / Buyer's Agent, it's the Realtor's job to negotiate the contract for your best interests. In other words, the Realtor will negotiate the following: sales price, earnest money deposit, down payment assistance, financing options, etc. I know buyers who were told they had to use the builder's mortgage company even though that mortgage company did not have the best loan programs. So, the buyers wound up getting a higher interest rate. They were told that if they did not use the builder's company, they would not receive the special incentives (like free upgrades, builder paid closing costs, etc). A Realtor can negotiate for you, so you do not have to use the builder's lender.
3. Incorrect Options – Building a home takes several months. Everyone's human, and we all make mistakes. Sometimes, builders make mistakes and put the wrong options in your house. When I had my home built, the builder put in the wrong countertops. In another buyers' house, the builder put in the wrong bathtub, the wrong light fixtures, and there was a lot of standing water on the lot. Your Realtor will monitor the building progress, and the Realtor will notify the builder immediately if a mistake is made.
4. Incorrect Paperwork at Closing – Realtors know what type of paperwork should be at the closing. I know a buyer that had a home built, and during the building process, the paperwork changed. Specifically, the sales price was lowered. However, when they got to the Closing, all the original documents were there with the higher price. No one could find the new paperwork. The Realtor was the only person who had it. So, without the Realtor, the buyer would have paid too much for the house.
5. Incorrect Settlement Statement – Realtors go over this statement in detail to make sure it's accurate. If you've never heard of a Settlement Statement, that's the form that you've given at the Closing. It lists all your closing costs, and it states whether or not you have to pay money or get money back at closing. Well, I can not count the number of buyers I know that encountered incorrect settlement statements. For example, at one of client's closings, the Settlement Statement showed that my client had to pay over $ 200, but in actuality, he did not have to pay anything. Luckily, I was there, and I noticed that one of the fees on the statement was incorrect.
Now, you know the benefits of using a Realtor even if you're having a new home built. Now, you do not have to learn the hard way. The best thing about hiring a Realtor / Buyer's Agent is that it's FREE (in most states). Why would you not want someone to look out for your best interests (for FREE)?