• Kylie McKay

Think You Don't Need A Real Estate Agent For New Construction?

Updated: Aug 11



Before I jump into the essential questions that should be asked when considering building a new house, ponder this one: if you do NOT have a real estate agent working on your behalf, who is on your side? Who will back you up if something goes wrong? Who will be on top of your deadlines? Who will make sure your financing is going smoothly? Do you think the representative for the builder is looking out for your best interest? NO! They are hired by the company/builder to look out for themselves, not you.


Also, keep this in mind when exploring options, who is paying for the real estate agent to be present in the transaction? The builder! NOT YOU! Builders typically do not reduce the sales price unless they need to close out their books for a specific home, floorplan, etc. Therefore, you do not have sales price leverage by choosing not to have an agent protecting one of your largest purchases.


Okay, let’s get to the questions most people do not think to ask!


1. How long has the company/builder been around?

A well-known, long term, reputable builder will have their contacts and processes nailed down, providing a smoother transaction.

a. Any claims/complaints against company?

You would be surprised what can be found by asking a real estate network for input on builders! Also, look up their reviews online, they can add some extra insight on buyer experiences.


2. Financing – is there an in-house lender?

I always recommend talking with a couple lenders prior to starting the home search so you have an idea on what you can afford and what a comfortable payment would be when looking at floor plans, upgrades, etc.

a. Advantages/incentives to use preferred lender?

I see a lot of in-house lenders providing incentives to getting a loan with them but you will want to know ALL details especially if they are increasing rate or other items to offset the incentive. Ask the builder if they will honor an outside lender with the incentives. It’s always good to know if you have options with that process.

b. Is there required qualification with a lender prior to contract signing?

Occasionally, builders will require loan pre-approval through their associated lender even if they are not going to be doing the loan. It helps the builder feel confident in selling you the home but could also be more work for you.

c. Any issues with a jumbo loan?

With our rapidly increasing sales prices, we just want to ensure there wont be any issues with getting a jumbo loan for the purchase.

d. Do you have a house to sell?

Builders tend to work with buyers who have a home to sell. Having an agent along to communicate with the sales associates makes the process easier on all parties.

3. Any buyer incentives in general for particular lots, floorplans, etc.?

If the builder needs to get a certain lot, floorplan, etc. under contract quickly, they may offer incentives such as a refrigerator, blinds, or other options. Or they may have reduced pricing for “quick sales”. It doesn’t hurt to find out if there are any of those options!

4. What is the required earnest money amount?

This amount is due at the time of signing the contract and is generally more than the earnest money amount for resale.

a. When does it go hard?

At a certain point, your earnest money becomes non-refundable. Most often, it is around 7 or 14 days after signing the contract. Be sure to read the builder contract closely, they are all different and they are not state approved forms. Ask the builder questions and get specific so you have clarity.

b. Is there a right of rescission?

There is generally a “grace period” from the time of signing the contract where you can essentially back out of the contract for little to no expense to you. Each builder company is different so with all of this, it can vary.


5. What is the deposit for structural option selections?

Often times, this amount is due within the first week or so of signing the contract and can add thousands to the amount owed quickly and can be non-refundable.



6. Does the company have a sample/model home with standard finishes?

The typical model home is always going to be full of upgrades and special features that may or may not be available through a design center. This is important to keep in mind, as I see a lot of people fall in love with the model home, which isn’t always practical or possible to replicate. Taking a look at inventory homes can be a little more realistic and you may fall in love with one of those if you need something sooner.

7. What is the average spend at the design center?

If the average spend is a lot (or over your budget), then its possible the “standard” finishes are not a quality you will be happy with. You also don’t want to spend a lot more than the average since it could potentially hurt your resale value.

8. What is the HERS score?

With energy scores, the lower the better, as you will save more on your utility bills! Most quality builders will have numbers much lower than 85.


9. Is there a solar requirement?

This is a new one. In some communities throughout Colorado, solar is actually required now. This can be an additional expense but also a big item when it comes to resale.



10. What are the warranties provided?

The huge benefit to new construction versus resale would be the warranties! With resale, after closing, all issues that pop up are the responsibility of the new homeowner. With new construction, the homeowner may get various warranties in case something happens, within certain timeframes of course.

a. Workmanship/materials?

These are typically shorter timeframes, perhaps a year or a couple of years, but the most often used. In my experience, after you move in and start living in the home for a few months is when you will start seeing items you want corrected. Make sure to make a note of these items and then have the builder correct them all at once.

b. Structural?

You will receive a longer warranty specific to the structural integrity of the home. It’s a good idea to periodically (every few years) have an inspector take a look at the structure to make sure its still in sound condition. Occasionally, there is an option to purchase additional insurance for the structure, which can be helpful since structure deficiencies are very difficult when it comes to resale.

c. Who is in charge of the warranties?

It’s good to know whether the warranty policies are provided through a 3rd party or through the builder. If it’s through the builder company, do they have a warranty representative to help with claims? If not, it can be difficult to track down the correct person so making sure you have all of this information up front helps to be a happy homeowner.

11. Is there an HOA fee?

This can impact your loan pre-approval and monthly payment.

a. When will it be turned over to residents?

This is when homeowners are given control of their community and able to elect board members. You might want to consider being on the HOA if you want to help in running the community!

b. Accumulating reserves?

Though it sounds backwards, you want the HOA to collect money from each homeowner so that it has reserves in case any work needs to be completed. If there aren’t any reserves, you could incur assessments, which can catch you off-guard.


12. Does the company use a certified soil specialist?

The soil type is incredibly important to having a solid foundation and keeping it in good condition so it needs to be properly evaluated.

a. Do they provide the guide to swelling soil and soil report?

This is required to be provided and contains a lot of good information you don’t want to miss.


13. When is the official completion date assigned?

This is important to know for locking in your loan, getting a house on the market (if needed), packing, and more!


Be sure to understand that there are many factors that come into play when building a new home. The property will need to be issued a CO (Certificate of Occupancy) before you can call it home. Trade partners, building inspections, material availability, etc. can cause delays and changes. It is best to have an agent working on your behalf and staying in communication with all parties (builder rep, lender, title, etc.) to make the process as smooth as possible for you, the new homeowner!

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