“Do I need a Realtor to buy a newly constructed home?”

Do I need a Realtor to buy a newly constructed home?

I’ve answered this question so many times over the past year, I finally decided just to blog about it.

Here’s the simple answer, “Yes! By all means, yes! Please, please, please get some good representation!” OK, maybe that’s going a bit overboard, but you get the drift. As with any real estate transaction, you never “need” a real estate agent. This is technically true. However, I highly recommend getting some good representation on any purchase. This is especially true for new construction.

Why? Shouldn’t buying a new home be easy? What’s to know? What could go wrong? Ugh.

Many people mistakenly think that just because a home’s new, that it’s perfect. This just isn’t so. There can be just as many problems with new construction as with homes built in the early 1900s. In many cases the issues are different, but that just underscores the importance of working with an agent who understands the pitfalls of new construction. In general, new building regulations and codes have assured us that new homes will generally be extremely structurally sound; however there is often a massive drop off in the quality of finishing work. Hardwood floors installed poorly. Wet basements. Shoddy drywall installation. Cheap materials. The list goes on and on.

Honestly, potential finishing work issues are just the beginning. Builders often offer so-called discounts and upgrades if buyers forego the use of a real estate agent. Why might this be? They’ll tell you that they make more money if an agent isn’t used, but intuitively it feels a little less straight forward than that. Many builders will “require” you to use their in-house lender. Again, deep discounts will be promised, but are rarely found.

Also, in this economy with a slow down on new homes sales, many builders are filing for bankruptcy. There’s little recourse after a builder enters bankruptcy protection.

Look, buying a new home can be an excellent choice. Prices are low right now and amenities are high. I don’t mean to scare you off the new home market, there are just a few things to be aware of. Here are some quick suggestions:

• Work with a buyer agent
• Have a home inspection – DO NOT WAIVE YOUR RIGHT TO AN INSPECTION
• Get a follow-up inspection on any repairs
• Be pre-approved for financing
• Schedule a final walk-through
• Understand your home warranty

I believe the vast majority of builders are great people who truly do their best to sell quality homes. They’re human, however, and mistakes happen. It’s important to be smart when buying any home and new homes are no exception.