A Realtor is not generally required when you buy a new-construction home. Most buyers should still involve an independent buyer's agent before contacting or visiting the builder.
The decision usually turns on 3 questions: who represents you, how the buyer-agent compensation works and who will review the builder's contract. Builder policies can change, so confirm the current rules as of.
A builder's sales representative helps sell the builder's homes. That person may explain floor plans, options, financing and paperwork, but typically represents the builder rather than you. Lennar, for example, states that its consultants represent Lennar rather than customers.
A buyer's agent can help you evaluate the builder contract, negotiate incentives, arrange inspections, track deadlines and identify problems before closing.
Should You Use a Buyer's Agent for a New Construction Home?
Yes, in most cases. A buyer's agent is especially useful when the home has not been built, the contract has strict deadlines or you are making several design and upgrade decisions.
| Situation | Buyer's agent recommendation |
|---|---|
| First-time buyer | Yes |
| Home is still being built | Yes |
| You are selecting upgrades or a homesite | Usually yes |
| Builder contract has strict deadlines or limited cancellation rights | Yes |
| Move-in-ready spec home with a straightforward contract | Optional, but still useful |
| You are experienced and will hire a real estate attorney and inspector | Possibly not necessary |
Construction timelines, change orders, deposits, allowances, inspections and closing dates can create risks that are easy to miss during a model-home tour.
What Does a Realtor Do for a New Build?
A buyer's agent represents your interests during the purchase. The builder's sales representative represents the builder.
Reviews the Purchase Contract and Builder Addenda
New-home contracts are often written by the builder. They may cover:
- Earnest money and builder deposits
- Construction delays
- Substitutions of materials or finishes
- Appraisal shortfalls
- Financing deadlines
- Inspection rights
- Homeowners association obligations
- Warranty procedures
- Cancellation rights
- Closing-date extensions
A buyer's agent can explain the business terms and point out issues to discuss with a real estate attorney. HUD recommends considering an attorney's review before signing a home purchase agreement, particularly when you need legal advice about whether the contract protects your interests.
Helps Negotiate the Total Deal
Builders may have more flexibility with incentives than with the base price. Depending on the community and available inventory, negotiations may involve:
- Closing-cost credits
- Interest-rate buydowns
- Appliance packages
- Flooring or cabinet upgrades
- Lot premiums
- Design-center credits
- Landscaping
- Extended warranties
- Faster completion or move-in dates
A buyer's agent can compare an incentive package with a price reduction. A temporary mortgage-rate incentive may lower your payment, for example, but a permanent price reduction could be worth more depending on your loan and how long you expect to own the home.
Coordinates Independent Inspections
A new home should still be inspected. The CFPB recommends making the sales contract contingent on a satisfactory inspection and financing when possible.
An independent home inspector can review:
- Drainage and grading
- Roof installation
- Windows and doors
- Electrical and plumbing systems
- HVAC performance
- Insulation
- Drywall and flooring
- Appliances
- Structural or visible construction defects
Your agent can help track inspection deadlines and document repair requests. The inspector, not the real estate agent, should provide the technical opinion about the home's condition.
Provides a Second Opinion on the Community
The builder's representative can explain the builder's community. An independent buyer's agent can help you compare it with other neighborhoods and resale homes.
Check:
- Property taxes
- Homeowners association fees
- Future phases of construction
- Nearby road or commercial development
- School boundaries
- Lot premiums
- Resale competition
- Builder reputation in the local market
- Typical completed-home sale prices
NAHB notes that production builders commonly offer standard features, optional upgrades and several floor plans within a community. Check what is included in the base price because model homes often contain upgrades that are not included.
Does the Builder Pay the Buyer's Realtor?
Sometimes, but do not assume the builder will cover the full cost.
Buyer-agent compensation is negotiable. The builder may pay it, offer a seller concession, pay part of it or leave the buyer responsible under a written agreement. Your buyer representation agreement should state the compensation clearly and explain whether you could owe a shortfall.
Before signing with an agent, ask:
- What is the agreed compensation?
- Will the builder offer compensation in this community?
- If the builder pays less than the agreed amount, do I owe the difference?
- Can the builder's contribution be used for closing costs instead?
- What happens if the transaction is delayed or canceled?
- Is the agreement exclusive, and how long does it last?
Ask the builder's sales representative to confirm the community's current broker-participation policy in writing.
Register Your Agent Before Visiting the Model Home
Contact your buyer's agent before your first visit, phone call, online registration or appointment with the builder.
Many builders have strict registration requirements. Lennar says the buyer must identify and register the cooperating broker during the first interaction with a Lennar employee. It may also require the broker to accompany the buyer on the initial visit.
KB Home similarly requires registration at the first visit. Its broker compensation is subject to specific conditions, including a written buyer-broker agreement and other deadlines.
Policies vary by builder and community. If you visit alone, the builder may still allow you to use an agent, but the agent could become ineligible for builder-paid compensation.
When Might You Skip a Realtor?
Buying without a buyer's agent may make sense if you:
- Have purchased multiple new-construction homes
- Understand the builder's contract
- Are comfortable negotiating upgrades and incentives
- Will hire an independent real estate attorney
- Will order an independent inspection
- Have verified the builder's warranty and cancellation terms
- Understand exactly who pays any buyer-agent compensation
- Are purchasing a completed home with limited customization
Skipping an agent does not automatically mean the builder will reduce the price. Ask what happens to any broker-cooperation budget when you do not use an agent. Some builders may offer an incentive, while others may not.
Realtor Versus Real Estate Attorney for a New Build
A buyer's agent and a real estate attorney serve different purposes.
| Professional | Main role |
|---|---|
| Buyer's agent | Market advice, negotiation, builder communication, deadlines, inspections and transaction coordination |
| Real estate attorney | Legal review of the purchase contract, addenda, rights and obligations |
| Home inspector | Technical evaluation of the home's condition |
| Lender | Loan approval, underwriting and financing documents |
| Builder's sales representative | Sells and coordinates the builder's homes and represents the builder |
For a complex custom build, unusual financing arrangement or contract with limited buyer protections, using both a buyer's agent and an attorney may be worthwhile.
Bottom Line
Your decision should come down to whether you have each part of the purchase covered. If you can handle the builder's negotiations, contract review, inspection process and deadlines through your own experience and hired professionals, buying without an agent may work. If any of those areas are unfamiliar, involve a buyer's agent before you contact the builder and confirm the compensation arrangement in writing.