Building a custom home can be an exciting process. And when it’s all finished, having your dream home built to your specifications is worth the effort.
When building a custom home, one question that is commonly asked is, “Do I need a custom home realtor?”
In this article, we look at the pros and cons of working with a realtor when building a custom home, how to find the right realtor, and when hiring a realtor offers the most benefit. This way, you can make the best decisions for your situation.
Know Your Realtors: Builder’s vs. Buyer’s Agent
Although there are many different types of agents in the real estate world when building a custom home there are two types to be aware of:
- Builder’s agent: This agent represents the company you are hiring to build your custom home. They represent the builder.
- Buyer’s agents: This agent represents you, the individual purchasing the custom home. They represent you and your interests throughout the process.
The builder’s agent is typically someone who regularly works with the builder. They also may be an employee of the builder.
The builder’s agent knows and understands the builder and what they are trying to accomplish.
Think of this like a sales position at a company. The builder’s agent is there to conduct business on behalf of the builder.
If you decide to do so, you can always have the builder’s agent represent you. However, there may be benefits to having your own realtor.
Do you have to hire a realtor to build a custom home? Legally the answer is no. However, a good realtor is a significant asset because they can help you save money, negotiate with your builder, and create an organized and more enjoyable experience.
Not every agent is going to be helpful. That is why finding the right realtor is so important.
How to Find the Right Realtor
To reap the benefits of having a realtor on your side, you need to choose the right realtor.
A “bad” or less effective realtor won’t necessarily do monetary damage to your home purchase, but they can make your buying experience more difficult–or leave you doing all the work.
The selection process can be tricky, but here are a few things to keep in mind:
- Experience: Custom home building is a unique niche in the real estate market. Experience with traditional home buying doesn’t necessarily translate to custom home building. Since this is likely your first experience building a home, you’ll want a guide, not a fellow novice. Make sure to ask realtors you are considering about their experience with home builders to ensure they’ll be helpful to you.
- References and reviews: People often select a realtor based on familiarity. A recommendation from a trusted friend or family member can help you find the right person. But don’t stop there. Realtors will also have Google or Facebook pages where you can read through reviews from people they’ve worked with in the past. You can also ask the realtor directly for references from past clients so you can talk to them directly and learn about their experience.
- Communication: You want to work with someone who can communicate well with you and your builder. Interestingly, 93% of realtors prefer to communicate via text messaging. Make sure you understand and set expectations at the beginning to build a strong foundation of communication.
- Time and availability: Make sure you’ll be a priority for your realtor. Some realtors take on a lot of clients or only work as an agent part-time and have limited availability. Think about the responsiveness of the realtor you’re considering and ask about their workload.
Choosing the right realtor to represent you can make a big difference in the overall custom home building process. Take some time to interview different people and make the right decision.
5 Ways a Realtor Can Help You
The main reason you need a realtor when building a custom home is to represent you and your interests.
But what does that mean, exactly? Here are five ways a realtor can help you out.
#1: Connect You to the Right Builder
With so many builders in your area, it can feel overwhelming. You may have a builder in mind; however, it’s worth consulting with an experienced realtor before committing.
Once you’ve selected a good realtor with knowledge about custom building, they can give you advice based on their experiences and connections.
They may also be able to guide you to an ideal lot or community you hadn’t considered.
Your realtor can show you multiple options and provide advice on what makes a good builder. Their insights are valuable at this stage, especially if you’re unsure where to start.
#2: Help You Plan
Building a custom home is a more complex process than purchasing something already on the market. Even deciding where to begin can be daunting without a plan in place.
Your realtor can assist you throughout the planning process. Their unique skills and expertise will provide valuable insights.
Here is how an effective realtor can help you plan:
- Set realistic timelines and expectations
- Develop a budget that works for you based on your needs, desires, and expectations
- Identify your style and the options you’re likely to choose
- Connect you with resources you might need (designer, architect, broker)
- Help you understand the nuance of the build process
They’ve done this before, and they know what to expect. Sitting down with a real estate agent and having a conversation is a productive way to start the planning process and ensure you’re starting on the right track.
#3: Act as an Intermediary
A good realtor will save time and help the project run smoother by providing a bridge between you and your builder.
The timeline for a custom build is 12-18 months and involves many decisions and deadlines. It can be tough to manage all of this on your own.
This is where a realtor can step in and help manage necessary “to-dos.” A few examples of what they’ll keep track of include:
- Deposit timelines
- Contract cancellation or adjustment deadlines
- Upgrades or design choices
- Walkthrough and inspection dates
- Improvement or repair requests
A real estate agent can negotiate for you with the builder. If things are behind schedule, they can work with the builder to develop solutions and speed things up. They can also negotiate extra benefits that you may not be able to get on your own, such as upgrades or specific design elements.
You may not know when to intervene or how to get what you need from your builder, but your realtor will.
#4: Solve Problems
Things can and do go wrong when building a custom home. No one is perfect, not even your builder.
A good realtor will understand how things are supposed to go.
As problems arise, they can evaluate whether it’s out of the ordinary or easily resolved. They can then work directly with the builder to solve these problems.
An experienced real estate agent can also help you stay calm. They can assure you because they’ve been here before and know what to do.
#5: Save Money
Building a custom home is not cheap. However, the cost of building a custom home can vary, and realtor can help you save money throughout the process whether you’re in the planning or building phase.
Here are three ways they can help:
- Act as a voice of reason: When making difficult budget decisions, they can give you the advice you need to move forward. Whether it’s a big decision or a small one, a realtor can be a voice of reason.
- Help you avoid extra costs: Experience in the field is invaluable when considering unnecessary upgrade options or finding hidden costs. This can help you avoid or minimize expenses in your budget.
- Ensure you know what you’re getting: A realtor will understand the ins and outs of your builder’s contract. If a builder’s model home includes luxurious and top-of-the-line finishes, but your contract only accounts for lower-quality pieces, a realtor can point this out to you.
- Negotiate with the builder: If you disagree with your builder on a budget-related item, your realtor can step in and negotiate to save costs. They know more about the options available and can help steer things in a different direction.
Some may worry that the cost of the realtor will affect their prices from your custom builder and end up costing them more, but the opposite is true. Your builder will usually already account for your agent in their pricing, and a realtor can provide insight to help you avoid excess spending.
Enjoy the Process of Building Your Custom Home
All these benefits of working with a realtor come down to one thing: they’re acting in your best interests. Their main job is to make you happy by working towards the best positive outcome.
By keeping the most stressful elements of the process off your plate, providing experienced advice, and acting as an ally, your agent will be an invaluable asset to your journey.
Creating your one-of-a-kind dream home doesn’t require a realtor, but it will certainly help you enjoy the process.
