Do you Need a Realtor when Building a Custom Home?

Building a custom home is a wholly unique process, but some aspects are strikingly similar to a standard homebuying experience. The most common factor? Hiring a realtor. You may have a vision for your new home, but if you haven’t dialed in the specifics, you’ll need some professional help. Do you know the precise area in which you want to live? What about the square footage of your home? School districts, local zoning codes, and neighborhood guidance will also need a professional’s consult. Realtors can help guide and narrow the search, overseeing and negotiating the process of specific elements of the home throughout the process.

However, we should make an important distinction early on in this process: there is a different between the builder’s agent and the buyer’s agent. The former is the agent representing the builder, who is considered to be the seller in the transaction. The latter is the agent who will ultimately represent you, the seller, and who can help get you want you want.


Do you know and trust the builder?

Building a custom home does not always mean “custom.” As we’ve discussed previously, there is a difference between a custom home and new home development communities. A custom home allows the buyer to have a say in nearly every step of the design process, while a new home development community build has a pre-selected range of building options. You may have already picked the subdivision of where you’d like to live, but you’re not completely “sold” on the home builder itself. This is where having a realtor will provide an advantage. Hiring a realtor to oversee your personal interests will help rein in the builder and maintain your preferences.

Similarly, building a new home is an expensive process, and in a new development construction, the builder will likely oversee much of the construction and contracted work. If you don’t have professional real estate experience, you may not have the ability to know when a builder is overcharging for a service. A realtor, however, will.


What about building a custom home?

Building a true custom home—a home not associated with a new development community—will not likely necessitate the help of a realtor. Working with a hand-picked architect and contractor should provide all the guidance and consult you’ll need to get your project off the ground. However, there is one situation wherein having a realtor will be beneficial: if you haven’t found a lot. The realtor will be able to find and present a range of options suited to your needs.

It also bears repeating that custom homes will cost between 20% and 30% more than other new homes. If you’re opting for this type of build, cost efficiency may not be the most important factor in the process. In most cases, a realtor’s fee is likely to be just a small cost of the overall build, so investing in this professional may be worth your time.


How much of a realtor’s commission are you paying?

For new construction and even custom home builds, using a realtor is not an all-or-nothing proposition. The real estate industry is experiencing a fair amount of innovation and diversification, especially for niche services and flat-fee rates. Most of us have heard about flat-fee listing services for sellers, but there are flat-fee realtors for all kinds of buyer and seller realty services. This can help buyers hone the services they want to prioritize while simultaneously saving money.


What is the advice given to realtors themselves?

When working on custom home builds, realtors are told to prioritize the client’s needs over all else—and to ready for debate with the builder’s agent. In a custom build, realtors understand that their primary role is as negotiator. It is the agent’s job to discuss financial decisions with the buyer; if they choose to not utilize an agent, they are taking a big risk with one of the largest investments of their lives. Realtors understand that buyers who opt out of working with their agent are not saving much, if any, money. The commission that would have been paid will instead go to the builder’s salesperson, or the builder will keep it as profit. Realtors prepare for and are familiar with unexpected costs, how timing will factor into the price, and how to move builders on their bottom line.

So, is it necessary to hire a realtor for your custom home build? In most cases, having a consultation is an excellent idea. If you’re seeking a home in a new development company, can’t find a great plot, or are otherwise unfamiliar with the custom home process, having a realtor on your side is extremely beneficial. If you’re building a custom home with hand-picked contractors and architects, you won’t necessarily need a realtor, but having some kind of representation is always a good idea.