New Construction Buyers Say They Need Agents Too

With low mortgage rates and median prices moving somewhat closer to what middle-income buyers can afford, newly constructed homes are enjoying their best sales year in more than a decade.

Most home shoppers — 64% — are potential new construction buyers who say they are either exclusively looking for a newly constructed home or are open to buying one, according to the Zillow New Construction Consumer Housing Trends Report 2019. For a variety of reasons, including regional availability and cost, only 9% do.

But it doesn’t have to be that way, especially if agents can help smooth over some of the bumps in the customer journey and fill in knowledge gaps around what buying new construction entails.

Agents can build their businesses — and provide more options for buyers in places where existing home inventories are tight — by forging relationships with local builders, or at least by becoming familiar with the types of inventory they’re offering. 

Buyers need help with new construction

The process of buying new construction has some rough spots for shoppers, especially first-timers. In addition to searching for and financing a home, they’re trying to visualize what that home and the surrounding community will look like, evaluate a builder and select a floor plan and finishes.

Given the number of moving parts, it’s no surprise that most new construction buyers (76%) work with agents to find their home, and that 84% of new construction buyers who work with an agent and visit a building/sales center want their agent to help communicate with the builder. 

Half of those buyers (50%) want their agent to handle some communication with the building/sales center, and 34% want their agent or broker to handle all communications with the builder. Only 16% don’t want their agents involved.

Gen Z and millennial buyers especially value help from agents

Young buyers of new construction, who tend to be purchasing a home for the first time, appear to find their agent’s expertise especially valuable; 49% of buyers between the ages of 18 and 39  who use an agent and visit a building/sales center want their agent to take over all communications with their builder.

Some of the things they might need help with include:

• Negotiating price
• Booking a tour
• Exploring upgrade options
• Comparing new construction values with existing home values

Nearly a third (30%) of buyers who purchased a newly constructed home in the last two years say it was difficult for them to determine whether the home price was fair. Younger buyers report even more difficulty: 39% say they struggled with determining what was a fair price, 32% say they didn’t understand everything they signed and 22% say they did not have a good grasp of the transaction.

Among all new construction buyers, 31% struggled with timing the completion of a new home with the sale of a previous home.

New construction expertise can broaden your referral base

Agents who can work with builders as partners are likely to provide the smoothest experience for their customers while broadening their source of referrals. 

To reach a bigger pool of buyers and showcase your knowledge of all home types, Zillow’s new construction team recommends the following:

• Understand the builder’s inventory, which typically includes homes that are move-in ready as well as spec homes, available lots and homes that will be finished soon.
  
• Ask the builder about build timelines and move-in timelines to help customers better plan and coordinate their moves.
• Learn about new construction premiums and how lot positions, home features and floor plan options play into costs.
• Develop a sense of how the community will look once built out. This will help to compare amenities to those around existing homes and to determine if there are things such as a homeowners association that could add to monthly costs.
• Become familiar with builder warranties, preferred builder financing and whether other financing options are allowed.

Overall, knowing a builder and their inventory and process will allow you to speak knowledgeably about new construction to buyers.