The Benefits of Hiring a Buyer’s Agent When Buying a New-Construction Home

When Carlos Gonzalez bought a house in Katy, Texas, in 2020, he admits it was a challenge.

“The negotiation process was lengthy, multiple inspections were necessary, and settling on a final price proved to be quite challenging,” he explains.

Two years later, in 2022, he decided to splurge on a brand-new home in a new-construction community in Katy. Although he acknowledges he paid “a higher overall cost” than for his resale home, he was relieved to find that navigating this type of purchase was much easier—and came with some surprising perks.

“The builder often picks up many closing costs and can show some flexibility with pricing,” he says.

For the existing home, he paid $210,000; and for the new-construction home, which is an investment home to rent out, he paid $270,000.

In both transactions, he used the same real estate agent, Veronica Mendoza, a real estate broker from Houston—and was glad in both instances that he did. Gonzalez believes that the guidance, expertise, and regular communication provided by his agent made the process much smoother.

“My agent was constantly in touch with the builder’s agent, scheduling showings, checking the property’s readiness for viewings, and coordinating all the details,” Gonzalez explains. “Those tasks can be challenging.”

In both transactions, the sellers were the ones paying a 3% commission to Gonzalez’s agent.

Should you hire a buyer’s agent when purchasing new construction?

There’s an ongoing conversation about whether having a buyer’s agent is necessary when purchasing a new-construction home.

A buyer’s agent works for homebuyers to represent their best interests throughout the transaction, according to the National Association of Realtors (NAR). Buyers can either pay the agent directly through a negotiated fee, or the agent may share in a commission from the listing broker.

It’s important to realize that if you’re dealing directly with a home seller’s agent, their primary goal is to achieve the best outcome for the seller, not necessarily for you. Meanwhile, builders often have their own real estate agent, only that agent is likely to direct you toward their specific development projects.

If your top priority is to find your dream home and you’re open to considering different areas or developments, having your own buyer’s agent can open the door to more options beyond just one subdivision.

If you do decide to employ the services of a buyer’s agent to purchase new construction, it’s best to work with one familiar with the process.

Mario Rodriguez, a real estate agent in Houston, learned a lot by working for a local builder several years ago.

“Working with a builder helped me learn what it takes to develop and build new construction homes, while also allowing me to explain the process to clients who are looking to purchase new-construction homes,” Rodriguez notes. “However, there are downsides: There’s a lot of paperwork involved when working with a builder, and you can’t be in two places at once, which means you have to spend a lot of time in the model home.”

An alternative: Agents partnering with builders

Many builders, rather than have their own on-staff agents, are now collaborating with independent agents or entire brokerage firms to offer tiered commission structures or bonuses that incentivize agents to highlight their developments. These agents could offer the best of both worlds, where they aren’t limited to any particular builder but still might have insider knowledge from a builder about better deals, upcoming promotions, and available lots that typical agents may not access.

Although some homebuyers worry about potential conflicts of interest that could arise from such arrangements, Rodriguez thinks he has been able to address both the needs of the buyer and builder at the same time.

“I believe that by understanding, listening, and offering guidance, agents can strike a balance between the goals of both the builder and the buyer,” he says.

New construction vs. resale commission

Traditionally, builders have offered a 3% commission to buyer’s agents; but since the NAR settlement, some buyers have opted to go without an agent in hopes of negotiating a better deal directly with the builder.

Ultimately, deciding to save a few thousand dollars by not using an agent is a personal choice. However, it’s essential to remember that while the builder’s agent may be knowledgeable, their primary focus is on meeting the builder’s goals, which is to sell the home—not necessarily to provide you with the best options tailored to your needs.

For this and related articles, please visit Realtor.com