Prospective homebuyers walking into a new construction sales office may feel welcomed, but experts caution that the sales representative represents the builder, not the buyer. According to Yitzchak Pierson, a licensed real estate broker with eXp Realty in New Braunfels, Texas, this distinction shapes nearly every decision from the moment a buyer steps onto the lot and can have significant financial implications.
Pierson, who has closed over 120 new construction transactions, emphasizes that builder’s representatives are paid by the builder and often earn higher commissions when buyers come without their own agent. This creates a financial incentive to discourage outside representation. “The builder’s rep wants to close the deal, hit their sales targets, and move inventory. Your job, as a buyer, is to get the best possible home at the best possible price, with protections built into the contract,” Pierson explains. He notes that in most new construction transactions, the builder pays the buyer’s agent commission, so going without representation does not save money but removes someone focused solely on the buyer’s interests.
One critical area where buyers often err is in inspections. Many assume a new home is defect-free, but Pierson warns that defects such as drainage issues, framing gaps, HVAC problems, and insulation oversights are common. He advocates for a pre-drywall inspection to examine framing, wiring, and plumbing before walls go up, and a final walkthrough inspection before closing. “Experienced buyer’s agents know to push for in-person walkthroughs rather than the virtual alternatives many builders have started defaulting to,” Pierson says, stressing that placing blue tape on imperfections ensures corrections are made.
Builder incentives, such as rate buy-downs and closing cost credits, can be attractive. In the current market, some builders offer rates as low as 4.25 percent through affiliated lenders. However, these incentives typically require using the builder’s preferred mortgage company, and high-volume lenders may rush buyers through the process. “A good buyer’s agent who knows the process can push back, telling the sales representative and loan officer that the client needs time,” Pierson says. This advocacy ensures buyers understand their loan documents before signing.
Pierson also highlights the value of agents who have established relationships with builders. Agents who close dozens of transactions with specific builders develop connections with construction managers and sales leadership. This can lead to direct access to ask about lot drainage or survey data, and the credibility to push back on process changes like eliminating in-person re-walks. “These things are not guaranteed, but they are far more likely when a buyer is represented by someone with a track record in that builder’s ecosystem,” he notes.
New construction homes offer advantages like warranties and lower rates, but the process is builder-centric. “The builder has done this thousands of times. The buyer may be doing it once,” Pierson says. Having a representative who understands timelines, knows the process, and is unambiguously on the buyer’s side is essential. Since the builder typically pays the commission, hiring a buyer’s agent is a logical step.
For more information, visit www.yitzchakpierson.com.
