Do You Need a Realtor to Buy a New Home?

The question has been asked many times – do you need a realtor to represent you for a new home purchase? The answer is a resounding no. Let’s take a look at a typical example: purchasing a new condominium in a new project that is now under construction with an occupancy date approximately one year away. In most of these cases, the developer or builder of the project has hired a marketing company or have their own sales staff to sell the property. The point here is that the sales staff are working only for this project and dedicated to only this project. As such, they are trained to know and understand everything about the project so they can convey this information on to the consumer. Typically this is done through a presentation centre, sales office or show home environment. Yes, these sales people are working for the interest of the developer or builder but you are assured to get the highest level of service and correct information from them.

Now let’s take a look at the role of a typical sales agent (resale homes); one that is not associated with the project in question. Firstly, there is no way of this sales agent fully understanding the complexity of the project in question because they are not dedicated to this project, as such, in most cases, it is a learning experience for them as well as yours. So what can they bring to the table then? That’s the point; not much. The agent might offer their insight in contract law by insisting on including multiple non-essential clauses, which tend to have no relevance when buying a new product. In fact, every new project have their own agreements, addendums and paper-work, which in many cases the agent might not even understand as they are only used to their prescribed forms in which they were trained in (these are forms used for resale properties). I’ve even been involved in a sales agent insisting that a home inspection clause be included. Really? It’s brand new!

In many cases, a third party realtor can actually effect the customer or their client from buying the home they really want. Why? Because of commission. Some developers or builders of new home projects may not pay full commission. This may result in the realtor swaying you away from the project you like to another project or a resale home (which may pay full commission). Or if the occupancy date is too far away, they may take you to another project with immediate occupancies. Why? Because they don’t like to wait one year before they receive their commission.

With all due respect to sales agents out there who understand the new home process, the scenario above tends to be evident more often than not. There are a few sales agents that tend to be good ambassadors for new home projects and actually do provide an alternative option of buying new to their clients. These agents also know to introduce their clients to these knowledgeable sales people of the project and get out of the way.


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