What Buyers Need to Know Before They Visit a Builder’s Model
100 Real Estate Tips in 100 Days (Day 11)
We love builders. We really do. Without the home builder, there would be no homes to sell, since every home was once brand new. However, there are a few
things the buyer should know about buying that brand new home:
- Almost all builders in Metro Denver “coop” with the Realtor community. That means that the REALTORS® commission in a new home sale is paid by the builder. Why? Because REALTORS® bring 60% of the buyers to the builders product.
- As a buyer you should always be represented by your own agent when you visit or buy in a new home community. As knowledgeable and pleasant as the onsite sales person is, you should remember that the onsite person works for the builder. In effect, the onsite salesperson is the builders “agent”, and cannot be your agent.
- The job of your agent is to find you the best house at the best price and terms for you. Your agent is not beholden to any particular builder. The onsite builder’s agent’s job is to sell you their employer’s product.
- Licensed real estate agents in Colorado all use the state mandated contract form. The form is designed to provide certain protections for the consumer. Builders have their own individual contracts, designed to protect the builder.
- Most REALTORS® have experience in transacting business with most builders, and have experience in negotiating in their client’s behalf.
- There are many factors involved in buying a new home that is different than buying a resale, such as product due diligence, and the builder is not required to protect the consumer beyond those issues required by law.
- Builder warranties are implied, but not expressed unless there is a specific written warranty provided by the builder.
The fact is, buying a new home is as complicated as buying an existing home, and most consumers are well served by having experienced representation.
About the Author
Kristal Kraft
Kristal has been helping buyers and sellers in Colorado since 1984. She enjoys sharing her knowledge of the Metro Denver Real Estate market via blogging and in person while driving around the beautiful Rocky Mountain town of Denver! For fun, Kristal enjoys shooting things with a Canon. Visit Denver Photo Blog
Kristal Kraft
2 Comments
In our area, Bergen County New Jersey, I am a Realtor and Builder. I had been a Realtor for 20 years before a builder. I sold however mainly new homes, about 800 of them over the years. Yes new home buyers would be serve by representation, but in our area there are few new homes as we are fully developed for the most part. Agents don’t have the experience and kind of just drop the buyers off and after the first showing or visit they are pretty much gone. An agent could only sell one new house every three years or so if at all. I’m sure your area has many more new home developments than us and agent s build up the knowledge base.
Hi Richard,
Yes, every area is very different. We aren’t built out like back east and have multiple new home builders. Our agency laws are probably different than in New Jersey as it is also an Attorney state (Colorado is not).
We have learned to co-exist with builders, as they learned we DO bring in business.
Agents who deal with new homes typically have a very good working knowledge of the market and can help a buyer compare not just homes but builders too.
Thanks for your comment. It’s always nice to hear about customs from different areas.
N.J. is my home state, I was born in Monmouth County, Exit 100.