Potential new home buyers are not usually aware of what all this entails. For this reason, they should rely on as many resources as possible to assist them. One that is of great value is an experienced real estate agent. One of the questions that may arise when considering this is if the real estate agent will make any money on the new construction?
Traditional Real Estate Fees
Most know that if they are going to sell a home and rely on a realtor to assist them that there will be some fees involved. Normally it is the seller who is responsible for these fees which are paid by way of an agreed-upon commission. Realtors work for brokers and the fees are paid to the brokerage firm, who in turn pays the realtor their commission.
For the buyer, they are not usually subjected to having to pay real estate fees yet they have the option of using one of these experts to help them find the house they want and to see to the presentation of the offer. The buyer’s realtor will usually receive a percentage of payment from the selling agent. How much this will be is determined through negotiations between the realtors.
Realtors and New Construction
The way that realtors make money when it comes to assisting with new construction sales is different.
New Home Build Representatives
Many builders of subdivisions have sales representatives that look after all the legalities of the sale of the homes. For this reason, it is commonly assumed that potential buyers do not need or have to have their own realtor as representation. This is not true as they do have the option of hiring their own realtor to assist them which brings with it many benefits.
The seller’s representative is acting on behalf of the builder and is going to focus on their best interests.
Who Pays The Realtor?
Although the builder may have their own representatives they are keen on selling the homes as quickly as possible. This keeps them open to relying on other resources like independent realtors. To capture their interest they may offer a set rate to the realtor who brings in buying homeowners. The amount will differ according to each builder. This means the buyer who is using a realtor that has opted into this type of agreement will not be responsible for the payment.
What is important however is that the payment agreement is fully understood prior to the homebuyer retaining the services of the realtor they are choosing. The buyer will be required to sign a buyer agency contract that should clearly lay out the responsibilities of the homebuyer using their services. In the case of the new construction build the contract should indicate that the realtor will receive payment from the builder and that the homebuyer has no obligation for paying this.
If the realtor reaches an agreement with the builder for the compensation they will make money on any sale that goes through that they have been a part of. There is an opportunity for this professional to make substantial money from these transactions especially if they represent multiple clients.
The Advantages of Using A Realtor For A new Construction Purchase
Although home buyers may be concerned about the realtor’s commission it is important to realize that the benefits of using their services can far outweigh any costs pertaining to them. It may be on the occasion that a builder will not pay a realtor anything for bringing in new clients. Yet, a prospective buyer wants to rely on their services. In this case, they may be able to negotiate a form of payment with the realtor who may be willing to accept a reduced commission.
Some of the benefits that can be realized are:
- Realtors are usually familiar with the construction home builders in the areas they serve. They can provide important feedback to the clients who are thinking of buying in a subdivision. The credibility of the builder is very important. Although the buyer can do their own research the realtor may already be privy to much of the information they need.
- An experienced realtor can also help with several of the decisions that need to be made for the new construction home buy. They can give suggestions about the best lots and potential things to watch for when it comes to the various lots.
- These types of new home buyers may not be aware that there are several things that they might be able to negotiate for the purchase. A realtor can point these out and then lead in the negotiations. Being able to rely on experience such as this can often save the buyer some substantial money.
- The realtor will act as the buyer’s representative. Whereas the representatives the seller is using acts on their behalf. It is important to have a professional that is looking after the buyer’s best interests and not just the sellers’.
- Review of the contracts is something that is very important and can be overwhelming for the buyer as it is usually filled with a lot of legalities. A real estate agent is used to this and will be able to review the documentation to make sure that it is all in order.
- Then there is the financing that has to be arranged. Some builders will encourage buyers to make use of their financing options. These may not always offer the best deal for the buyers. A real estate agent is knowledgeable in this area and may be able to make suggestions if the buyer wants to explore other financing avenues.
There is a lot to consider when buying a new construction build which includes choosing the right professionals to rely on. Putting the realtor at the top of the list is one of the best decisions that a new home buyer of this type can do.