You walk up to the slab of concrete with metal rods sticking out and think to yourself that that could be your new home. It could also be a doctor’s office. Or a giant bird house. Seeing the finished product when confronted with the beginnings of construction can be hard. Putting down big money on a house under construction can require a huge leap of faith. A real estate agent might be a help in this situation --- or might confuse things even more.
Need Versus Want
There is a big difference between needing a real estate agent and wanting one. Depending on the state laws, a developer may or may not be required to use licensed real estate agents. In Florida, private developers do not need licensed agents. The logic is that they are selling only for one owner and are not outside contractors. The easiest way to find out is to call the developer’s office and ask if they use license salespersons. If they do then you should get one also.
There are reasons why you may want to use an agent even if you do not need to have one. A real estate agent’s primary job is to negotiate for you. If there is wiggle room, the agent will find it. But they have other jobs also. A real estate professional will be able to assess the future value of the property. There are all kinds of examples of developers building properties in the most desolate of places and putting a huge price tag on the home with the logic that this will be the next hot community.
Someone needs to pay for the real estate agent. For resale properties, a buyer’s agent usually gets paid by a prearranged commission amount. Unfortunately, this does not always apply to new constructions. Some developers give commissions and some do not. The good news is that this might not be your problem. Tell your agent to find out if a commission split is required. That is his job, not yours. If the answer is no, work from there -- depending on how much you love the property.
The Fine Print
Lawyers are expensive, and real estate agents are not lawyers. They are mandated by licensing requirements to remind you of that. That being said, they know contracts. They understand what is standard and what is not. If you trust your agent, you may want to have her look over the fine print and explain it to you. If she cannot get a commission, you may need to give her a little money, but it will be worth it for a little piece of mind.
Paul Reyes-Fournier has served as the chief financial officer for social service organizations, churches and schools. In 2009, he created his own marketing firm, RF Media. Reyes-Fournier holds a B.S. in physics and an M.B.A.