Do You Need a Realtor to Build a New Construction Home?
One of the most common questions we get at Buildable is, “do you need a realtor when building a custom home?” The answer is yes, but not just any realtor – you will need a realtor who is an expert in land. Buying land is very different from buying an existing home and there are many factors to consider that determine how challenging and expensive it will be to develop. Additionally, only about 2% of real estate transactions in San Diego are land, so there’s a general lack of expertise in the market. Using a realtor who is not an expert in land adds risk and can lead to you paying more, or potentially buying a lot that is not ideal for building.
At Buildable, we have a team of land experts who’ve been trained to evaluate and price land. Some people ask if they can use their current realtor when working with Buildable, but we don’t recommend this because it’s not worth the risk. It’s critical to have the right people with you throughout this process, which is why Buildable has the right experts who will work with you at every step of the way.
Benefits Of Hiring A Realtor When Building A Custom Home
If you choose to build a custom home with Buildable, we will walk you through the entire process of finding land, designing your dream home, and building it. During this process, you will be introduced to expert land realtors and they will be with you during the process. The biggest benefit of using a realtor to purchase land is that there’s no cost to you as the buyer because the cost is covered by the seller. A realtor will act as your personal advocate in the transaction, using their skills and experience in negotiation to make sure you get the right price. Buildable’s team is designed to include a real estate agent, a real estate investment specialist, and a general contractor who will all be weighing in on the viability, price, and cost of improvements on a prospective lot. This model of partnering realtors and an experienced General Contractor can offer the most insights, visibility, and protection when purchasing land. Here are a few benefits we’ve outlined.
Realtors Will Act As Your Personal Representative
Realtors are there to advocate for you and level the playing field between you and the seller’s team. It’s important to have someone on your side to make sure you make the right offer. At Buildable, we will actively guide our clients away from lots that are not buildable, challenging to develop, or don’t make sense in terms of overall costs. When buying land, there may also be lot-specific needs for due diligence, which can affect the timing of contingency periods. A land expert will be acting on your behalf during this process to ensure the best outcome.
You can read more about Buildable’s Land Report, in which our expert team at Buildable will conduct a 28-point review of your lot to ensure it’s buildable, improvements are aligned to your budget, and the site will support your vision.
Realtors Are Trained Negotiators
Realtors are there to help negotiate the best price for the land you desire to purchase through - analyzing data and comparable properties. Land pricing is not as straightforward as the per-square-foot pricing that you will come across when looking at existing homes. The improvements, utilities available, need for roads and/or driveways, grading, and dozens of other factors should impact the final purchase price.
Beyond just the price negotiation, a realtor who’s a land expert can also help you negotiate to make sure you have enough time for due diligence and that you have the right contingencies in place. Buildable’s unique process makes sure insights from the builder are part of the negotiation which can help strengthen your position. We provide information about anticipated costs and timing to help you weigh the pros and cons of purchasing the lot. This information gives you the power to negotiate effectively and get a fair price for what you’re purchasing.
The Right Realtor With A Builder Can Reduce Risk
The role of a realtor is to help you find the best property to suit your custom build. To that end, it’s important that your realtor works closely with a builder to determine if the land you’re looking at is buildable. Realtors working with an experienced General Contractor can provide critical insights about the lot, which will directly impact your custom home build. However, the challenge is that the overwhelming majority of realtors are not land experts and don’t want to deal with land transactions due to the increased complication and lower commission. This is why Buildable provides you with a team that includes a realtor who is an expert in land and a General Contractor who can help evaluate the cost and limitations of building on a particular lot. With the support of Buildable on your team, you can be confident you’re not making any mistakes.
Realtors Can Connect You With Reliable Financing Options
To finance custom home construction, you may need to get a construction loan. The construction loan process is almost identical to the traditional mortgage process. The main difference between the two processes is that a construction loan requires cost detail provided by a General Contractor. A realtor can connect you with companies that provide construction loans, which can be a big benefit. Buildable keeps an eye on rates from various commercial banks, so you can be confident you’re working with the best partner.
There Is No Cost To You
People often ask, “do you have to pay for a realtor?” The answer is no, their commission is paid by the seller unless it is an off-market or complex deal. Because the realtor is usually paid by the seller, there is no reason to not leverage one who’s a land expert.
Some people wonder if they will get a better deal negotiating on their own; this is almost certainly a no. Representing yourself in a real estate transaction opens you to personal litigation from all parties involved in the transaction, that’s a huge risk. Most importantly, you will have access to correct data to get the best price with a realtor who is an expert in land. Often, commission splits are agreed to by the lot owner and the owner’s agent, with a percent determined to go to the buying agent. If you represent yourself, most likely the seller’s agent will “double-end the deal”, get the full commission that the buyer’s agent would have received. There’s no “savings” to the owner. We have designed Buildable’s process to include a Realtor land expert at no cost to reduce risk and ensure you’re doing it right.
How to Find the Right Realtor to Purchase Land for Your Custom Home Build in California
Now that we’ve answered the question, “do you need a realtor to build a house?”, it’s time to discuss how to choose the right realtor for you. When buying land for a custom build, you need a real estate agent who’s an expert on land. An agent who is not an expert, or even one who knows only a little, can present an extra risk to you and the deal. If you work with Buildable, we’ve trained our agents extensively in what to look for, so you can rest assured that you’re working with the best. Below are some ways to vet a real estate agent before hiring.
Understand Their Experience
Knowledge of the area is another critical asset for your real estate agent to have. You want an agent who has knowledge about the specific areas that you are looking to buy in. For example, an agent who knows land in Encinitas might not be the best if you’re looking in Escondido. We recommend that you ask your agent about how many land transactions they’ve completed in the desired area. Additionally, you should ask about the local community and culture, to determine how familiar they are with it. You’ll want your agent to be a partner that can guide you to the right neighborhoods within a given area, so you don’t make a mistake when purchasing land.
Understand What They Will Do to Bring Off-Market Lots to You
One more thing to consider when choosing an agent is their marketing skills. Finding off-market lots means that you are negotiating outside the market with less competition. This can help you get a better deal while avoiding the stress that comes with finding something on the open market. The MLS (Multiple Listing Service) is just a snapshot of what land is being sold at any given time and doesn’t represent everything for sale. There are new lots being created every day, increasing the stock of available land daily. There are over 30,000 vacant lots in San Diego County. Working with Buildable and a resourceful connected real estate agent can bring you opportunities that you never knew existed.
Work With One of Buildable’s Experienced Land Realtors
Finding the right realtor is one of the most crucial decisions you will make regarding your custom home build. A realtor is there to guide you through the process of purchasing land, and you want to make sure your realtor is someone you can trust, with the proper experience with land. At Buildable, our team is made up of experts with decades of experience in their fields. Our realtors work closely with builders to make sure the land you’re looking at will work for the kind of build you have in mind. If you choose to work with us, we will provide you with the support and guidance you need to choose the perfect property for building your dream home.
Build Your Home in San Diego With Buildable
Building a home in San Diego takes an immense amount of time and effort, and can appear overwhelming to those who start the journey alone. However, building a home can be straightforward when you approach the process with experts by your side who can guide you through every step.
At Buildable, all of the people you need to have a stress-free home build will work with you to create the home of your dreams. Read about our team, talk to us, and get the answers to questions you may have about starting the custom home building process in San Diego.
