First Issue First
The very first thing you should do when thinking about building a new home is hire a professional real estate agent. If you skip this step, you’re going to find that the most complex process you have ever encountered is one you will have to navigate on your own.
When you go into a new construction neighborhood, the first thing the developer’s representative (sales person) is going to have you do is ‘sign in.’ If you sign in without having your own agent, the developer will not pay for you to have an agent at any point in the process. If, on the other hand, you sign in with your own agent, the developer will pay your agent to represent you and your interests throughout the entire process.
That’s right: you must have your agent when you see the developer the first time, or you place yourself at a permanent disadvantage. And just as you wouldn’t drive without a seat belt, or skydive without a parachute, you should never put yourself into the situation of building a new home without your own agent – someone who has your interests front and center. And your agent should be one with expertise in new construction, so they can actually help you and guide you through a very long and complex process.
Now, every developer has sales people at their offices. These people are generally very nice and friendlyand have very pleasant dispositions. We have legitimately become good friends with several developer’s sales agents. But, regardless of how friendly and nice they are, they are paid by the developer to look out for the developer’s interests. They will happily interact with you (regardless of whether you have your own agent), but they do not and will not represent you. If you provide them confidential information, that goes right to the developer. If an issue arises, they will place the developer ahead of you. We’re not saying this to be mean; actually, they are required by law to do this. They are the developer’s agents and are required by law to work on behalf of the developer, to maximize the developer’s interests.
You need to have someone on your side, someone looking out for your interests first and foremost, someone who owes you that legal duty of loyalty. And the best part for you, the developer pays your agent a fee to do this work on your behalf. They budget for this business expense, and it doesn’t cost you anything. Now, if you choose to forego your own representative, can you get that commission back from the developer? No. Remember, their sales agents work for the developer and owe a duty to maximize the developer’s interests (including profits). So if you forego an agent of your own, that budgeted commission goes right back to the developer. You will not get it.
Besides that, oftentimes, developers actually prefer to work with a buyer’s professional agent because emotion can be removed from challenging issues and negotiations, and the real estate agent is more likely to be able to understand (and explain) complex issues as they arise. As well, a real estate agent is likely to bring multiple clients to a developer’s neighborhood over time, so there are repeated transactions – not the case with someone buying just one home.
So – given the complexity of the process, given the developer has professional representation, and given that the developer will pay your professional agent’s fees, there are no reasons to not use an agent, and every reason to do so. But to do so, you must show up with your agent the first time you go to a new construction neighborhood. Do yourself a huge favor: get an agent and work with that agent.
One final note on this topic. Given the complexity of the process, and that professional representation is available at no cost to you, get the best agent you can – one who really understands and enjoys working on new construction. At the Chong Miller Group, we have built our own home (multiple times), we have learned the process, the ins-and-outs, we know the builders, and the many complexities – from contracting to closing. We are truly experts in new home construction and we enjoy the many complex challenges (and advantages) that arise. We’d love to be your trusted real estate experts to assist in your adventure and help you get the best outcome possible, with the least pain possible.
Building a new home requires making many important financial decisions, understanding complex issues and completing a lot of paperwork, as well as making many design decisions. It is much more complex than simply buying an existing home. So here are some factors to consider when choosing your real estate professional:
- Education. Oftentimes, in real estate the most important educational consideration is with respect to the sales process. But with new construction, a broader education becomes really important. Can your agent help you with selecting finishes? Can you agent help you determine the best long-term investment value of various structural upgrades? Can your agent help you identify construction errors as they arise, and then negotiate with the builder to solve those problems? Can an agent help you with a protracted 6-month financing process? A broad-based knowledge of the many aspects of construction, contracting, design, negotiating, financing, and real estate are all vital to your successfully building your new dream home or investment property.
At the ChongMillerGroup, we’re unique in this respect. In addition to our experience in real estate, Justin has been teaching at some of the top business schools for the past 10 years, and Jason has been a practicing consultant for even longer. We both have extensive education in negotiation, finance, problem solving, project management, and have learned a great deal about construction – as well as real-world experience building multiple new homes for ourselves.
- Experience and Expertise. You want a real estate agent who is familiar with the new home construction process. Even better, you want a real estate professional who can put themselves in your shoes, having personally been there before. That level of experience and expertise is hard to find, and it’s invaluable to you. At the ChongMillerGroup, we have exactly this experience and expertise.
- Availability and Commitment. Your agent should be capable of prompt and decisive action during the course ofyour building/buying process. Does your agent make it a point to keep in touch with you continually? Can your agent easily be contacted in case of emergencies, or even for the simplest questions? Does your agent find the new construction process so exciting that they will be monitoring the construction of your new home? We do.
- Rapport. Does your agent take the time to listen to your goals and clarify your needs? Can your agent understand your unique situation and genuinely be concerned about the outcome of the process? With respect to new construction, this is arguably the most important issue to look for in a real estate professional, as the process will take more than half-a-year and involves many complex steps. Your goals are our goals, your interests are ours, and our loyalty is yours. We will be your representatives through the process, always in your corner, and always keeping your needs and interests front-and-center.
