While new housing starts were down in March and remained at the same level in April, newly issued building permits rose to the highest level since 2008, according to the U.S. Census Bureau. Indeed, new housing developments are springing up, in pockets around the country.
This is a great sign for the housing market and the economy, but it presents a bit of a problem for real estate buyer’s agents. It doesn’t necessarily have to though.
It’s easy for an eager buyer to become starry-eyed over the model homes in new home developments and to give in to the pressure from the builder’s agent to sign the purchase agreement and begin picking options and upgrades.
If you’ve taken the time to build trust and rapport with your home-buying clients, it’s time to take them aside and have “the talk.”
Explain the process – let your buyers know what to expect if they visit a new home development without you. Caution them that there will be pressure from the sales agent to sign contracts and to use the builder’s preferred lender. Explain their rights to them – that, despite what the agent says, they have a right to their own buyer representation and to use the lender of their choice.
Dual agency – explain to your clients exactly what an agent’s fiduciary duties are, if you didn’t do so when they signed the buyer’s agent agreement. Then, explain to them that these duties are impossible to fulfill in a dual agency situation.
Be prepared to accompany your clients on their new home development tours. If you can’t do that, caution them to tell the builder’s agent that they are working with an agent. Not only will this keep you from losing your buyers, but also it should keep the agent from pressuring your clients.