Frequently Asked Questions> Real Estate Agent

Do You Need a Real Estate Agent to Buy New Construction

According to, newly built homes accounted for 31.4% of the market in the second quarter of 2023. This number signified the highest market share for newly built houses recorded for any second quarter.

But with no former resident or owner, do real estate agents have a role and responsibility to fulfill? Do you need a real estate agent to buy new construction? No, you do not. Clients have the liberty to choose if they want to work with estate agents when purchasing a new home. In fact, this applies to every real estate transaction.

However, partnering with agents is not about legalism but rather necessity. There are countless benefits an agent can provide a client who is interested in purchasing new construction.

In this article, we go into the value agents bring to the table and why your clients should never rely solely on the seller’s agent. With your notebook ready, we’re all set to begin.

Benefits of Having a Real Estate Agent

Recently, I covered an interesting topic: Will Real Estate Agents Be Replaced by AI? As I was writing this piece, it occurred to me that we sometimes need reassurance of our place in the industry.

So, I am starting this piece off by reiterating why you are invaluable to your clients, even when they are buying new homes.

Protect a Client’s Interests

Though we never swear in court or take the Hippocratic Oath, the first duty of any agent is to protect their client. We represent and protect our client’s interests in one of the most important and probably the biggest purchases of their lives. 

While a new property sale does not involve a prior owner, there is still a developer and a developer-centric contract.

As an agent, you can comb through the contract, ensuring that your client is not dealt a bad hand. By interpreting the contract and reviewing the terms and conditions, you can help your client understand what they are signing their name to.

Should the need arise, you can refer your client to a lawyer who will ensure your client’s interests are also legally represented.

For example, some building contracts may have an escalation clause. The clause is placed in a contract to protect the builder should labor or material prices increase during the project lifespan.

Essentially, it suggests the buyer will agree to pay a portion of the increase to complete the project.

Let’s say cement prices rise significantly while your house is still being built. The escalation clause would bind you to increase your pay to the builder, factoring in the now inflated cost.

A lawyer would help a client navigate such contractual demands, while your expertise may help them understand the financial implications.

But that is not the end of duty. You will also want to monitor the construction process. Your constant supervision will guarantee that your client gets a house worth their pay.

Save Clients Money

Backed by their negotiation skills, realtors can and often save clients money. Negotiations are integral to an agent’s sales kit.

We take it so seriously that the NAR has a Real Estate Negotiations Expert certification course to help agents without negotiation game upscale.

Why? It is the tool we use to bag savings for our clients.

Each transaction we’ve handled provides valuable insight into pricing strategies and market trends. Our experience with builders and developers helps us understand their negotiating patterns and pressure points.

This past experience gives agents more leverage to hammer out builder concessions and incentives their clients may not get on their own.

Some builders may even price their homes above market value. Experienced agents know how to push back and get builders to lower prices to more accurately reflect fair market value.

Help Clients Get Financing

Financing the purchase of a new construction home can be incredibly complex compared to an existing home. We come in with invaluable assistance for navigating this difficult process.

If a home is being built completely from scratch, builders may require different loan products during the construction phase. Buyers are often required to cover construction costs through a construction loan before transitioning to a traditional mortgage to finance the completed home purchase.

Experienced real estate agents who work with new construction understand the intricacies of these financing requirements and loan products builders prefer. Their expertise can help buyers get approved for the right loans and avoid costly missteps.

Most agents have a roster of preferred lenders they’ve worked with successfully in the past on new construction deals. Partnering with one of these lenders can help streamline the financing journey for buyers.

With their financing knowledge and lending contacts, agents can make what is typically an arduous financing process go much smoother for buyers of new construction homes.

However, as part of your fiduciary duty, you may not accept kickbacks or financial benefits for referring clients or do anything that elevates your benefit above that of a client.

The best approach? Always ensure that your clients are partnered with the best possible lender for their homes.

Only suggest a lender if you believe that they can truly benefit your client.

Ensure a Good Resale Value

While clients may be focused on building or buying their dream home right now, it’s also important to consider the property’s future resale value. A real estate agent can provide guidance to help maximize the home’s value down the road.

Agents have deep knowledge of what features and design choices are popular and desirable to buyers in the local market. We can advise on incorporating trends like open-concept layouts, smart home technology, energy-efficient appliances, and more that are likely to pay off big from a resale perspective.

Why Clients Shouldn’t Rely Solely on the Builder’s Agent

Clients often rely on the developer’s or builder’s agent when buying new property. However, it’s crucial to understand that this agent represents the builder’s interests, not the buyer’s.

While they will certainly not go out of their way to sabotage the buyer, their fiduciary duty is to the seller and not the buyer. When you come into the sale, you will hold the buyer’s placard, ensuring that they are served.

The Value of an Agent in a Client’s Corner

While it is not legally required for clients to work with a real estate agent when purchasing new construction, the benefits of doing so are numerous. From protecting your interests and saving you money to assisting with complex financing and ensuring good resale value – an experienced agent can be invaluable during this process.

Next Steps:

Interested in becoming an estate agent for new construction?

1. Research: find the makings of a good real estate agent for newly constructed homes.
2. Study: take a course either online or in person.
3. Finance: work with lenders to get the best financing deals for your clients.

Have you worked with clients on new construction? We’d love to hear about your experiences!  Share them in the comments below! And if this article has been helpful, feel free to share it. 

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