Recently I attended a meeting where part of the discussion was about a study done by The National Association of REALTORS®. This particular study is titled "2007 Profile of Home Buyers and Sellers" and contains one set of statistics that quite frankly is scary. I hate to think how much money buyers have lost nationally just by not implementing one simple strategy when purchasing new construction.
For years now consumers have heard that it is in their best interest to use the services of a REALTOR® when purchasing a home. This still remains the best practice for a buyer to follow. According to the study 88% of all buyers purchasing pre-owned homes utilized the services of a REALTOR®. Here is where the scary part comes in. 50% of all buyers purchasing new homes were not represented by an agent. That’s right 50% of new home buyers bought their home utilizing the services of the agent that represented the builder. WOW!
Perhaps the REALTOR® community has done better job promoting the attributes of our services for buyers purchasing resale properties as opposed to new construction. Personally I don’t believe that this is the case. I think buyers perceive that the services of a REALTOR® are needed more for the purchase of a resale home. After all, there are the inspections to deal with, coordinating the moves and of course warranty concerns. Well guess what folks; you have just as many concerns on new construction. You still need to have an inspection, you still need to coordinate the move, you still have warranty items that arise within the first year of ownership and the list goes on.
Let’s examine some of the reasons why a buyer would want representation in purchasing new construction:
- Making certain that you, as the buyer, obtain the right home, at the right terms and conditions is the goal of your REALTOR®
- Not having representation to provide relevant sales data before making an offer, including how much the builders have been contributing to closing costs and handling the negotiations for the entire transaction can be expensive for a buyer
- The buyer’s agent does not cost the buyer anything, the seller pays the commission. So the thought that you can save money by not utilizing the service of a buyer’s agent may in turn cost you money.
- Understanding the contract and it’s time frames so the buyers interests are protected
- Handling the inspections and preparing any amendments to remove the inspection contingencies
- An educated buyers agent in Atlanta can compare relative data from various subdivisions and neighborhoods to provide buyers with the best comparisons to use in their decision making process, including detailed school information.
By law in the State of Georgia a buyer is entitled to representation. The law is called the Brokerage Relations in Real Estate Transactions Act. Georgia was one of the first states to enact legislation to protect consumers in real estate transactions. As the buyer of a new home in the Atlanta Real Estate Market, make certain that you are properly represented and that you have all the comparable data that you are entitled to so that you can make a truly informed decision. After all knowledge is power and you want to deal from a position of strength.
Mack Perry is an Accredited Buyers Representative, ABR, and represents buyers of both new construction and resale properties in the Atlanta Real Estate Market. For a confidential meeting to discuss your real estate needs and the exact criteria for your next homecontact Mack today.
{ 4 comments… read them below or add one }
Mack – I could not agree with you more. Although I mostly work with sellers, it makes pefect sense that a buyer should have representation. I have been around new contruction my whole life and there is lot more thought, energy, and knowledge needed in purchasing a new home. Having an advocate in your corner when purchasing a home makes good business sense!
Bill – Thanks for your thoughts. I work with both buyer’s and seller’s and can not think of a good reason for either one to be unrepresented. These statistics about buyer’s purchasing new construction 50% of the time without representation just blew my mind!
Mack it is amazing how many buyers purchase new construction without any representation. The numbers are actually skewed as there are a number of places like inest that would be counted as the buyer being represented by an agent when in reality they still don’t get representation.
Buyers for some reason feel they can learn it all by doing some “research” online, or worse they feel the builders salesperson in some way is working for them. On more then a few listing appointments I have heard from sellers that they “never should have bought this home”. When I ask why they did it was due to the sales tactics used by the builders salesperson.
It costs the buyer nothing to have representation so why wouldn’t they have someone working for them?
Ken – It is good to hear from you my friend. Some new home agents are just so likable the buyers just can’t imagine that these agent’s do not have the buyer’s best interest at heart.
A group of subdivision agents came to our office meeting the other day and one of them had the nerve to state that if we would just send the buyer to him we wouldn’t have to do anything he would handle it all and send us our copy of the contract. Now if I were to take him up on that offer, it would almost be like stealing a commission check because I performed none of the duties that I should in order to earn my pay. For this agent to be so blatant, i can see how he would be the one to put sellers in the situation you mentioned.