5 Tips for Working Directly With Builders

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When you represent a buyer, new-home construction can be an important part of the inventory you show your client. Some buyers prefer new homes, and selling new construction can be very different than selling previously owned homes.

Entering into a listing agreement with a builder gets you, as an agent, an exclusive right to list their properties—and an excellent way to expand your professional reach. But to truly build business, you must understand how to work well with builders.

If you’re interested in this approach, consider these five tips from pros who know.

1. Learn the ropes before diving in

Don’t walk blindly into the world of new construction, says Mary Ann Daniell, a Realtor® based in Killeen, TX.

“You’ll need to understand the vocabulary, construction schedules, inspections and all the other details that are different from older homes,” she says.

Start out by walking into a model home and asking questions. A helpful sales rep or experienced Realtor can show you the ropes, too. Supplement your education with books on the subject, courses through a local college or real estate commission and even trips to look at homes under construction.

2. Identify good builders to work with

Every builder is different, so be on the lookout for the right partners.

“Look especially hard for one who shares your ethics,” Daniell says. “You want to work with builders who put the clients first and are committed to honest practices.”

Getting this scoop shouldn’t be difficult, she says. “Talk with other Realtors, and they’ll tell you.”

3. Stay connected during construction

If you represent a buyer who’s building a custom home, keep tabs on construction and stay engaged with the builders. Regular visits to the site can help you spot potential problems and give you the chance to address them before they get out of control.

Even if you’ve been involved throughout the construction process, get an inspection to make sure everything checks out.

“Just because the home is new doesn’t mean it’s in perfect shape,” advises San Antonio-based Realtor® Dan Balcar. “I’ve seen 45-year-old homes in better condition than a new one.”

4. Be prepared for surprises

Healthy communication with the builder will help buyers predict changes to the construction schedule so there are no surprises. Still, Daniell recommends her clients never have moving trucks show up on the day of closing.

“I always remind them there are some delays a builder just can’t control,” she says.

The weather, inspections and the availability of materials and labor can result in delays. It’s best if clients understand at the start that a move-in date is a target, rather than a promise.

Sometimes, a custom builder might even simply walk off the job, which not only throws the entire project off track but also can expose buyers to financial risk. Staying close with the builder can help you anticipate disappointments like that, too.

“Protect your clients by making sure the builder’s construction bond is paid up, just in case something goes wrong,” Balcar adds.

5. Share what you know, but don’t be a know-it-all

One of your most important functions, as an agent, is educating. Advice from a great Realtor smooths the process and can benefit both purchaser and builder.

Some buyers may wrongly assume that buying new is like shopping at the hardware store: simple to understand, with well-defined options. That’s far from the truth, though, and buyers without an agent can get lost in the complexities.

“Advise them to get a Realtor to help them though the specifics,” Balcar says. “It doesn’t cost them any money and can really help them through financing, inspections, closing and other details.”

He adds, “Don’t give construction advice, since you’re not in that business.” But you can give important insights about real estate. For example, Balcar recommends buying a new home only if you plan to stay in it for five years, to give the neighborhood a chance to get established.

Ultimately, there are both pros and cons to working directly with builders. You may gain exclusive access to a large inventory of homes for sale, but the expectations of buyers can be different and sometimes trickier to manage compared to those of buyers purchasing a previously owned home. If you plan to give it a shot, keep these tips in mind so you can start on the right path.

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