Do You Need a REALTOR® When Buying New Construction in Rochester, MN?

Do you need a REALTOR® when buying a new-construction home in Rochester, Minnesota?

You are not generally required to hire your own buyer’s agent simply because a home is new. However, having an agent represent you can be valuable when comparing builders, developments, contracts, specifications, allowances, upgrades, inspections and timelines.

The builder’s sales representative is there to provide information about the builder and sell the builder’s homes. Your own agent can help you evaluate the purchase from the buyer’s perspective.

Representation Should Begin Early

Contact your REALTOR® before you:

• Tour a model home
• Register on a builder’s website
• Attend a private builder appointment
• Discuss a lot
• Request pricing
• Sign a reservation
• Make a deposit
• Begin planning a custom home

Builder registration and agent-cooperation policies vary. Waiting until you are ready to sign may make it harder—or impossible—for your chosen agent to become involved under the builder’s policy.

Current industry rules also generally require buyers working with an MLS participant to enter a written buyer agreement before touring a home in person or through a live virtual tour. The agreement should explain the services and compensation arrangement. Open-house attendance on your own is treated differently.

The Builder’s Representative and Buyer’s Agent Have Different Roles

The builder’s representative should accurately explain the property, plans, selections and builder process.

Your own buyer’s agent can help you:

• Compare multiple builders
• Compare new construction with existing homes
• Evaluate available lots
• Ask what is included in the price
• Review allowances and specifications
• Understand upgrade costs
• Track important dates
• Discuss inspection options
• Coordinate with your lender and title company
• Prepare and negotiate the offer where applicable
• Think about long-term functionality and resale

In Minnesota, agency disclosures distinguish between customers and clients and explain whether the agent is representing a party’s interests in negotiations. Buyers should review these documents carefully and ask questions before signing.

New Does Not Mean Simple

A completed new-construction home may look straightforward, but the transaction can involve:

• Builder-specific contracts
• Addenda
• Warranties
• HOA documents
• Lot premiums
• Allowances
• Upgrade deposits
• Appraisal considerations
• Estimated completion dates
• Seasonal work
• Final walk-through procedures

A custom or semi-custom build may involve even more decisions.

Your agent does not replace an attorney, lender, inspector, engineer or builder. The agent’s role is to help coordinate the real estate process, identify questions and recommend the right professional when specialized advice is needed.

A Buyer’s Agent Can Help Compare Specifications

One builder’s base price may include features another builder treats as upgrades.

Differences may include:

• Foundation type
• Window brand
• Cabinet construction
• Countertop material
• Flooring
• Appliances
• Plumbing fixtures
• Insulation
• Exterior materials
• Garage size
• Deck or patio
• Landscaping
• Lower-level finishing

A lower advertised price is not necessarily the lower completed price.

Ask for a written specification sheet and compare each home using the same list of desired features.

A Buyer’s Agent Can Help Evaluate the Lot

The lot affects the home’s layout, light, views, grading, driveway and outdoor space.

Questions may include:

• Does the desired plan fit?
• Is a walkout possible?
• Are there additional excavation costs?
• Which direction will the home face?
• Where will neighboring homes sit?
• Are there easements?
• What landscaping may be needed?
• Is there a lot premium?

Your agent can help you identify questions, while the builder, surveyor, engineer or appropriate government office should confirm technical and legal details.

A Buyer’s Agent Can Help With the Offer and Contract

Builder contracts can differ from standard resale purchase agreements.

Important provisions may involve:

• Deposit requirements
• Financing
• Price changes
• Allowances
• Change orders
• Construction delays
• Completion dates
• Appraisal
• Inspections
• Warranties
• Default
• Cancellation rights
• Unfinished seasonal items

Your REALTOR® can explain the real estate portions within their professional scope. An attorney should review provisions when you need legal interpretation or advice.

Should You Inspect New Construction?

Buyers should discuss independent inspection options even when the city and builder conduct their own inspections.

A private inspector works for the buyer and provides an additional review of accessible components. Minnesota’s Attorney General advises buyers to obtain a thorough inspection and notes that problems can exist even in relatively new homes.

Depending on the project, inspections may be considered at different stages or near completion.

Who Pays the Buyer’s Agent?

Buyer-agent compensation and how it is paid should be addressed in the written buyer agreement. Compensation is negotiable and may potentially come from the buyer, seller, builder, listing brokerage or a combination permitted by the transaction and agreement.

Do not assume the builder will automatically pay your agent. Ask your agent to explain the compensation arrangement before touring or registering.

Choose an Agent Who Understands Construction

Ask potential agents:

• How frequently do you work with new construction?
• Can you explain specifications and allowances?
• Have you worked with different builders and contract structures?
• Can you help compare a custom build with a completed spec home?
• How will you communicate during construction?
• What inspections should I discuss with an inspector?
• When should I involve my lender?

New-construction experience does not mean choosing the home for you. It means helping you ask better questions and evaluate the complete purchase.

About the author: Niki Fleming is a REALTOR® with Engel & Völkers Rochester. With experience in real estate since 2014 and lifelong exposure to residential construction, she helps Rochester-area buyers compare builders, new developments, completed homes, lots and custom-building opportunities.

Niki Fleming, REALTOR®
Engel & Völkers Rochester
507-250-1831
[email protected]
nikifleming.evrealestate.com