On average the building process can take six months and throughout that time period a lot of things are going on. There are contract negotiations, selections, progress meetings, walk-throughs and eventually (hopefully) the closing.
For some people who have time and prior experience or construction knowledge this might not seem like that big of a deal to handle. For others this sounds like a slow, painful death.
For those who find value in professional advisers, having a Realtor represent you through the building process is an invaluable resource (especially if you can find a Realtor that has a background in construction – hint, hint). Here are three simple reasons why:
1. It’s FREE!
Yes, you read that correctly. The majority of builders are represented by on-site listing agents who have cooperative agreements with general real estate agents. This means that the builder has worked into his/her cost of doing business the compensation for their prospective buyer’s representation. It’s free for you!
This is usually understood in residential resale, but most people who build a home don’t realize this very important fact. Some people think having a Realtor represent them will cost them. And even if you are unrepresented the builder will still ask the same price for his product. This constitutes a no-brainer.
If you enter into a contract with a builder and you are unrepresented then you become that builder’s customer. There is no client relationship as lined out by the Tennessee Real Estate Commission. While the on-site listing agent is required to give you certain fiduciary responsibilities under state law they are not required to work “for you” or “in your best interest.”
So, that means, when you negotiate the price, have snags in the building process or the builder doesn’t perform in accordance with the contract, then you are on your own. In this case you better have a good real estate attorney on retainer. Or you could just take advantage of the free representation that is made available and avoid these pitfalls.
3. Helpful Advice
Now some might not think this is really that important, but good advice can save you from making a poor decision. Builders market their products multiple ways. Some have flat rates that encompass all of the features you would find in their gorgeous model home. Others offer introductory pricing and then as you build in the features and upgrades that you want the price balloons.
In these situations it is good to have a Realtor that understands the development you are wanting to build in and the surrounding communities. He will help you understand comparable values and what you are really getting for what you spend. I have helped several clients choose builders based on this very thing and I think made them more comfortable building the home they wanted at a reasonable price.
My background is in construction and I have helped lots of families build new homes in different developments across Middle Tennessee. They will tell you that being represented through the extended building process is invaluable. It will help you save money, time and most importantly your sanity.