Do I Need a Realtor for New Construction?

You don't have to use a Realtor® to buy new construction in Texas. But there's an important distinction to understand: the builder's sales representative works for the builder. Your Realtor® works for you.

And here's something I want buyers to know before they start touring new construction: talk to your Realtor® before you visit the builder, fill out an online form or walk into a model home.

Your Realtor® needs to be involved from the beginning. Your agent should go with you on that first visit and make sure you're properly registered with the builder. Don't tour first and assume you can simply add your agent later.

It's much easier to get this right from the beginning.

What Does a Realtor® Do When You're Buying New Construction?

Buying a brand-new home is different from buying a resale home.

The advertised base price is only the beginning. Depending on the home and community, you may also be looking at a lot premium, structural options, design-center upgrades, HOA fees, taxes, closing costs and other expenses.

One of the things I help my new construction buyers do is look at the whole deal, not just the shiny parts.

That beautiful model home may have thousands of dollars in upgrades that aren't included in the base price. An incentive may sound fantastic until you look at how it fits into the overall cost. And an inventory home that's already under construction can be a very different purchase from choosing a lot and building from the ground up.

Those are the kinds of things we look at together.

The Builder's Sales Representative Works for the Builder

Builder sales representatives can be a great source of information.

They know their communities. They can tell you about available floor plans, lots, included features, construction timelines, design options and current incentives.

But they work for the builder.

That's not a bad thing. It's simply important to understand everyone's role.

Your Realtor® is there to look at the purchase from your side. How does this builder compare with another one you're considering? What's actually included in the price? What will the home cost once the options you want are added? Is there another inventory home or community worth comparing?

Sometimes it's also about knowing which questions to ask before you make a decision.

Why Your First Visit to the Builder Matters

This is the part I really want buyers to remember.

You may be driving around on a Saturday, see a new community and think, Let's just go look.

I get it. Model homes are fun.

Call your Realtor® first.

Your agent should accompany you on that first visit and register you with the builder. Don't wait until you've toured the model, given the sales representative your information or started talking seriously about a home and then decide to bring your Realtor® into the picture.

Start with your own representation already in place.

That way, when you walk through the model-home door, we're looking at the home together and you already have someone representing your interests.

What About Builder Incentives?

Builder incentives can be one of the best parts of buying new construction, but this is where it's important to look at the entire transaction rather than one big number.

Depending on the builder, community and available inventory, you may see things such as:

1. Closing-cost assistance
2. Interest-rate incentives
3. Upgrade or design credits
4. Appliance packages
5. Incentives tied to using the builder's preferred lender

Those incentives can absolutely have value.

But if a builder is offering a big incentive, we still want to know what the home actually costs, what's included, whether there's a lot premium, what upgrades have been added and whether there are requirements attached to that incentive.

The biggest incentive isn't automatically the best deal.

Should You Use the Builder's Preferred Lender?

Maybe. And this is one place where comparing the numbers matters.

A builder's preferred lender may offer financing incentives that make the loan very attractive. You still want to look at the interest rate, fees, lender credits, closing costs and total loan picture.

Sometimes the builder's lender really does offer the better deal. Sometimes another lender may make more sense.

You don't know until you compare.

I also like buyers to have their financing lined up early. It's much easier to make decisions about price, lot premiums and upgrades when you already understand what those choices may do to your monthly payment and cash needed at closing.

Inventory Home or Build From the Ground Up?

Not every new construction purchase starts with an empty lot.

An inventory home may already be under construction or even completed. That usually means fewer opportunities to change finishes or structural options, but there may be other advantages depending on the builder's inventory and timing.

Building from the ground up gives you more choices, but it also means more decisions and a longer construction timeline.

Neither one is automatically better.

The better question is: Which one makes more sense for you?

Your budget, timeline, priorities and how much you actually care about choosing every finish can help answer that pretty quickly.

Do You Need an Inspection on a Brand-New Home?

New doesn't mean perfect.

Even with new construction, I recommend talking with an independent inspector about the inspections that make sense for your home.

Depending on the construction stage and builder process, inspections may be done at different points, including before drywall goes up and again closer to completion.

Inspection access and timing need to be addressed early so everyone understands when the inspector can get into the home.

This is not something you want to start figuring out three days before closing.

Questions to Ask When Buying New Construction

There's a lot happening when you're standing inside a beautifully decorated model home. Having a list of questions keeps the pretty kitchen from making you forget why you came.

Here are some of the things you'll want to understand:

1. What's included in the base price?
2. Is there a premium for the lot?
3. Which features in the model home are upgrades?
4. What builder incentives are currently available?
5. Are any incentives tied to using the builder's preferred lender or title company?
6. What are the HOA fees and current property tax information?
7. What inspections are allowed and when can they be performed?
8. What does the builder's warranty cover?
9. What's the estimated completion timeline?
10. What happens if construction takes longer than expected?

You don't need to walk into the model home knowing every answer.

You just want to know what questions need to be asked.

Frequently Asked Questions

Do I need a Realtor® to buy a new construction home?

No. Texas doesn't require you to use a Realtor® to purchase new construction. But the builder's sales representative works for the builder. Having your own Realtor® gives you someone representing your interests throughout the purchase.

When should I contact my Realtor® about new construction?

Before you contact or visit the builder.

Your Realtor® should accompany you on the first visit and register you with the builder. Don't tour first and plan to bring your agent in later.

Does the builder pay the buyer's agent?

Builder compensation can vary. Your buyer-representation agreement explains how your Realtor® is compensated, and that conversation should happen before you begin touring homes.

Can a Realtor® negotiate with a new construction builder?

There can be opportunities to negotiate, but what a builder is willing to do depends on the community, available inventory, demand, construction stage and current incentives. Sometimes the opportunity isn't a lower base price. It may be closing costs, financing incentives, upgrades or another part of the transaction.

Should I use the builder's preferred lender?

It's worth considering, particularly when the builder is offering financing incentives. Compare the complete loan terms and costs before deciding which lender makes the most sense for you.

Do I need an inspection on new construction?

Brand-new homes can still have issues. Talk with an independent inspector early about which inspections make sense and when they can be performed during the builder's construction process.

Before You Walk Into That Model Home...

New construction can be a great option, and looking at model homes is definitely one of the fun parts.

Just remember that the builder's sales representative works for the builder. You should have someone representing you, too.

If you're thinking about buying new construction in North Texas, contact Tommye McCeig before that first builder visit and let's get a plan together.