Representation in a New Construction Transaction

Minnesota Real Estate Podcast With Chad and Sara Huebener

There are two components to representation in a new construction transaction. The first is your representation during the actual purchase of the site of the new home. The second is when you have a home to sell in order to purchase a new construction home. When you buy a new build site, it’s important to know that the agent at the model home represents the seller. In this case, the seller is the builder. It’s important that the consumer realizes that the agent represents the builder’s best interests. As a buyer, if you want to make an offer on a new build property, working with a buyer’s agent can be very important. We’ve seen a lot of people fall in love with all of the beautiful, shiny things that new construction has to offer. In terms of resale, it’s important to work with an agent who works in the existing resale market to figure out what you can do to make the home of value to others in the future should you ever decide to sell it. For example, we often see people put stainless steel appliances and granite countertops above a third garage stall in terms of importance. If you’re building a $500,000 house, the third stall is just an expectation at that point. “An independent agent will represent your best interests over the builder’s.” The second component of representation is when you are building a new home but have an existing home that you need to sell first. Oftentimes, the builder won’t begin digging on your new home until you have your existing home under contract. Something to consider when evaluating which agent to sell your home is whether they are independent or work with the builder. An independent agent may have more of a voice for you in terms of your unique situation. They will work to get the best price possible for your home, as well as the best possible terms. An agent who works with the builder is focused on selling your existing home so that you can get into your new house. Ultimately, whether you work with an independent agent or an agent attached to the builder depends on your unique situation. If you have any questions about buying a new construction property, just give us a call or send us an email. We would be happy to help you!