In a real estate transaction buyers and sellers traditionally are represented by licensed professionals who know and understand real estate law, contracts, and are experts at negotiation. RealtorsⓇ are specialists who have been examined and are certified by the state specifically in real estate sales.
Buying a new construction home is different than purchasing a resale home
New home construction is somewhat different in that the builder frequently has a sales showroom and model homes which buyers visit to become familiar with the floorplans being constructed in the neighborhood.
Home builders staff their sales centers with sales representatives who may or may not be Realtors. Because these sales staff work for the builder, they don’t represent you exclusively in the purchase of a new home. Though they do want you to be satisfied with your home, and your choices. Most do their utmost to represent you well, however, their legal agency is for the builder.
If you work with the builder’s sales agent to purchase your new home, that individual is in the position of dual agency. This is a person who acts for both the sellers and the buyers. While a single point of contact simplifies things, you should know that a dual agent as defined in the South Carolina Code of Laws may:
(a) in acting as a dual agent, a licensee represents clients whose interests may be adverse and that agency duties are limited;
(b) the dual agent may disclose information gained from one party to another party if the information is relevant to the transaction
There are exceptions related to disclosure where the state prevents disclosure of information related to negotiations, motivations, and willingness to pay or accept more or less than the listed sale price for the property.
Should I use a Realtor when purchasing my new home from a builder?
You have probably asked yourself this question during the process of making a determination to buy a new home. It is possible to buy a new home and not have a Realtor representing you. However, there are advantages gained by having a Realtor working exclusively with you.
A Realtor knows your local market and all aspects of buying a home in the area you’ve selected. They are expected to have insider knowledge about builder reputations and the quality of specific builders’ homes. Their local knowledge is extremely valuable to you as a buyer.
While any Realtor can work with you, there are some Realtors who specialize in representing buyers specifically. You would be well served to consult a buyer’s agent to represent you when you are buying from a builder. Your buyer’s agent has a fiduciary responsibility to represent you, and only you during the sale.
According to Cornell Law, “A fiduciary duty is a legal duty to act solely in another party's interests. Fiduciaries may not profit from their relationship with their principals unless they have the principals' express informed consent. They also have a duty to avoid any conflicts of interest between themselves and their principals or between their principals and the fiduciaries' other clients. A fiduciary duty is the strictest duty of care recognized by the US legal system.”
Buyers are best represented by Realtors with expertise in new construction homes
A Buyer’s Agent, also known as an Accredited Buyer’s Representative (ABR®), is a Realtor who has gained specialist knowledge in buyer representation. Realtor Magazine explains that an ABR has taken “courses that concentrate on various aspects of the buyer’s side, from negotiating to short sales and foreclosures and improving customer relationships.”
Realtors who become an ABR have taken the Accredited Buyer's Representative (ABR®) Designation Course course and passed their exam with a minimum of 80 passing grade. After the course of study, and to become certified, the Realtor must provide documentation verifying five completed transactions in which they acted solely as a buyer's representative.
An ABR is compensated for their services from the commission the seller pays. There is no additional fee paid by the buyer to the ABR for their consultation.
Take your ABR Realtor with you to view model homes
When you go to the builder’s sales center, have your ABR accompany you. He must be recorded as your buyer agent when you register with the builder. This prevents the loss of representation of you by your ABR. If you don’t register your ABR agent at the time you register with the builder, you may not be able to have representation from your ABR later.
When viewing the models, your ABR Realtor can help you select floorplans that fit your lifestyle and budget. They can be a great help when you’re trying to remain focused. Often in the models, builders dazzle with high-end features which are not standard to the plan. While they may be desirable, the expense of these up-grades may not fit your budget, and you could find that you are emotionally swept away, and bust your budget. Rely on your Realtor to keep you grounded.
Your Realtor can save you money
Builders may not discount their prices, but they may offer incentives to purchase by a specific date or use their lender. Your Realtor can sort out which promotion or incentive actually saves you money. Ask them to stay up-to-date with which builders are offering what so you not only get the best home, but you find the best value for your money.
During the negotiation process your ABR ensures you have the correct information about what is included in the home and what is not included. The ABR accepts the responsibility for reviewing the builder’s contracts and forms to inform you of all terms and conditions. Make sure you get the ABR to guide you as you complete contracts.
While new homes are new, they may not always be without flaws or latent defects. Your ABR should direct you and help word your contract with the builder to address situations of latent defects.
Using a Realtor makes sense
When the goal is finding the right new home, it’s wise to have a partner guiding you. A Realtor or ABR is precisely the right person for the job. And it costs you nothing extra, and in fact could save you thousands!
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