The 5 Reasons you need a Realtor when dealing with Custom Home Builders.
So you want a home? You have searched high and low across North Texas. Walked through many doorways seeking the right fit, then you see all of the new developments seemingly spring up from nowhere across our prairies. The thought arises, should I purchase an existing home or should I build a new one? You drive around searching for the right lot. Then you find it, this property, this piece of ground is perfect for my new castle. Now it is time to face the Builder. Do you do it alone or do you enlist the help of a Realtor? Every Builder will tell you, you can do it alone, no need for a Realtor. We can help you just fine, probably not. Why do I say that? Let me give you the 5 reasons why you need a Realtor when building a custom home.
#1 Representation – You walk into the show home. A nice young lady or man greets you. Let me show you the models, are they not beautiful? They can charm you, they can tell you the urgency to act now, and they will help you in every way. However they are collecting their paycheck not from you but the Builder. Their job is really not to make you happy but to bring in the most profits for the Builder. Think of them as car salesmen or saleswomen. If you go to a car dealership anxious and excited to buy a new car then ask them if the price is negotiable? What do you think they are going to say? No of course, however the truth in the Real Estate industry is everything is negotiable. A Realtor is bound by Texas fiduciary laws to represent you, the Buyer. They know the tactics Builders employ. Hardball is the name of the game. The Buyer must be willing to walk away from the Builder. A Realtor knows this. A Realtor will not only help you negotiate but will also look after your interest alone all the way through construction. When change orders occur and with new construction they will, Realtors will help you to negotiate those costs as well and help you with inspections and the final walk through. Remember the home does not close until construction is completed so the Realtor is not paid until the final product is completed.
#2 Experience – Why do I need a Realtor? I can sit down with the Builder’s architect. I can do these plans. All a Realtor does is show existing homes. Wrong. A Realtor knows what sells in a home. They can sit down and show you what features increase the value or decreases the value. Resale should always be on the Buyer’s mind. A new home, like a new car depreciates in value as soon as the Buyer moves in. The Buyer can only hope in a few years home prices will appreciate to recoup the costs and usually they do over time. However why put your home immediately behind the eight ball with features which make it much harder to sell. A Realtor can also run analysis of similar homes to determine what the market is for your new abode. They can show you neighborhood trends. They research so you, the Buyer do not need to rely purely on the Builder’s word.
#3 Finances – No need for a Realtor. The Builder has his own Lender I can work with. That is true, however the Lender the builder supplies is not working with your best interest in mind. The Lender works for the Builder not you. The Lender will try to arrange a deal favoring the Builder not you. A Realtor can arrange Lenders. Most likely the Realtor has index cards of Lenders. A Lender independent of the Builder will give you a much better chance of getting a fair deal.
#4 Price – If I don’t use a Realtor I can negotiate out the Realtor’s cost making my home less expensive. No, it simply does not work that way. Builders are smart, they are cunning. They do not want you to use a Realtor. Not only do they have an advantage during negotiations but without a Realtor the builder pockets extra money. The money paid to the Realtor comes out of the Builder’s budgeted marketing costs and has nothing to do with the cost of construction. They do not negotiate advertising/business costs only the cost of the home. So a Realtors commission is off the table. They may say they will throw in something extra, but those something extra pales in comparison to what a Realtor can do for you. The cost to the Buyer for a Realtor is absolutely zero.
#5 Peace of mind – I’m smart, I can do this alone! Maybe so, yet things will come up during negotiations, during construction which make you step back and think. If you doubt what the Builder is asking for, is it better to talk with the Builder or someone apart, working for your best interest? We all need someone to talk to however the Builder may not be the perfect match. You need someone on your side. Someone who can observe the situation objectively, someone who does not have their life savings tied up in the project. They can talk with the Builder without you being there. They can be the barrier so you are not pressured into making a quick or unwise decision.
The trick to using a Realtor is to bring them along when you first decide to speak to the Builder. Never give your name to a builder without your Realtor and never give them money without your Realtor. Builders will not pay a Realtor if you do any of the above. Many Builders require you to leave a deposit to secure a specific plot of land as if their plots are selling like hot cakes. Don’t get me wrong, the market is better than last year at this time, but they are not selling like hot cakes. Do not be pressured by these guys. A Realtor is a guy on your side. Use them and you will be happier in the end. See ya down the road.