New construction is plentiful in Missouri, and you may be considering buying a newly built home.

New construction has a ton of advantages, but many buyers make the false assumption that they can save money by not using their own REALTOR when purchasing a new home, which is a huge misconception.

Why buyers don’t think they need their own representation with a Realtor…
Many buyers assume that the builder’s rep will help them with the purchase of their new home. They also assume that working with the internal representation will result in getting a better deal on their purchase. However, the builder’s rep is working for the builder – not for you. Their success relies on getting the best deal for the builder, who is their employer. There legally can be no discounts passed on to you if you don’t use a Realtor, there is no savings.
But when you use a Realtor, you are the employer.

You, the buyer, may not realize…
You may not know that the commission for buyer representation is legally part of the purchase price. If you are not using your own Realtor, the builder simply receives an extra 3% from your purchase. Basically, it’s free for you to use a Realtor. Free. You also may not know that the builder is not required to have a licensed agent working for them, and many do not. When you hire your own Realtor you will be hiring a licensed agent who represents you, not the builder! Your Realtor looks out for YOUR best interests. The Builders agent or rep looks out for the BUILDERS best interests. Sometimes the best interests are the same for the buyer and builder, but just as many times they are NOT.

What your Realtor can do for you…
Experience isn’t expensive. It’s priceless. Your Realtor, who understands the ins and outs of home purchasing, can work on your behalf to negotiate a better deal, free upgrades, or simply whatever is in your best interest.

Most people wouldn’t consider buying an existing home without a Realtor to represent them. Therefore, why consider going through the even more stressful and complicated process of building a home without someone on your side? In many cases, you are committing to something that doesn’t even exist yet. It can be very daunting to go through the process of home-building, and dealing with the last minute changes and surprises. Buyers can avoid a lot of bad surprises with good representation of their own Realtor.

If you plan to use a Realtor to represent you…
And we sure hope you do!, be SURE to hand your Realtors card to the builder representative at the door of the model, and tell them, this is my Realtor. It is even better for your Realtor to bring you through the door of the model to make it clear at the very start that you have Realtor representation. There are rules as to how you are introduced to a builder, and when a Realtor is due their fee for working for YOU. Just be very clear and give your agents name, and CARD. If you plan to visit a model, give your agent a call and they can call ahead for you so that the builders rep knows you will be coming and you are represented by a Realtor.

“TO DO” List for Buying New Construction

  • Hire a Realtor. Like we’ve said, your Realtor is working for YOU. Home-builders prefer to monopolize the sale. They may only give you special “incentive” packages if you agree to use all of their representatives: lender, title company, and even insurance company! But your Realtor can walk you through this process and make sure you are protected, as well as make sure you are getting the best deal. If you decide to use the builder’s lender, your Realtor can make sure you get a good rate and fair closing costs. Your Realtor knows the standards, and can make sure the builder doesn’t try to go beyond those standards. By bringing in your own Realtor, you’re asking your builder to be on their “best behavior.” Your builder doesn’t want to get a bad reputation, and will want the potential to create a good relationship with your Realtor, who will hopefully bring buyers their way in the future if the transaction is successful.
  • Don’t sign anything until you’ve worked out every detail. Your builder may try to capitalize on the emotionality of buying a new home. Once you’ve become attached to this new home, they may try to get you to write up the contract quickly so you don’t lose it. But you absolutely must know what is in the contract, understand it and agree with it. No matter what the builder tells you, IF IT IS NOT IN WRITING IT WILL NOT HAPPEN. Everything will be done as it is written in the contract, so it’s important that you understand it clearly. Your Realtor can be a great player on your team when going through and trying to understand the builder’s contract.
  • Research the builder Your Realtor is an expert on homes in your area. This will include builders and their reputations. You want a builder that is not selling too many properties to investors – this can lead to creating a rental neighborhood and affects pride of ownership. Ideally, you also want your builder to be constructing homes of equal or greater value in your neighborhood to keep your property values high. However, this is difficult in some neighborhoods because the economy is difficult and people are affording and spending less on homes. Your Realtor can help you sort this out and advise you on these items. In this crazy economy we are in, several builders are on the brink of shutting their doors, just be very sure your builder is not one of them, and you know who your earnest money will be returned if they close during your construction.
  • Research city plans New neighborhoods are often in newly developing areas. Therefore, you want to know what is likely to happen in the area you are about to commit to. This includes your city’s plans for roads, public spaces, parks, and schools. You want confidence that your neighborhood is going to become a good place to live as it develops. The perfect source for this? Your Realtor, who likely already has this kind of information available. This makes the job so much easier.

As your Expert Realtor, we can help you with ideas, and help you work with the lender in these worst-case-scenarios. Do you have additional questions?  Robert Hussey St. Louis Metro: 636-329-4100 x101, Kansas City Metro 816-791-7900 or email at