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Navigating New Construction: Payment Timelines, Realtor Responsibilities, and the Value of Having an Agent

Embarking on the journey of building a new home is an exciting venture filled with anticipation and dreams. However, it also comes with a myriad of questions, particularly about finances and the role of real estate agents.


New Construction House


When Do You Pay During the Construction Process?

Understanding the payment timeline is crucial when building a new home. Here’s a breakdown of the common milestones where payments are due during the new construction process:

  1. Initial Deposit: This payment is made when you sign the contract with the builder. It secures your slot for the construction to begin.

  2. Foundation Stage: After the land has been prepared and the foundation is poured, a significant payment is often required to ensure the groundwork for your home is solid.

  3. Framing Stage: Once the structure of the home is framed, another payment is due, covering the cost of building the skeleton of the house, including walls, roof, and floors.

  4. Mechanicals and Rough-Ins: When the plumbing, electrical systems, and HVAC are installed, you’ll make another payment. This phase ensures all essential systems are in place.

  5. Interior Finishes: As the home starts to take its final shape with drywall, painting, flooring, and cabinetry, another installment is usually required.

  6. Final Payment: The last payment is made upon completion of the home, often referred to as the “closing” payment, covering the remaining balance and any additional costs incurred.

These stages can vary slightly depending on the builder and specific contract terms, but they generally follow this sequence. Reviewing and understanding your payment schedule thoroughly before signing the contract is crucial for a smooth construction process.


Who Pays the Realtor in New Construction?

In new construction, the builder typically pays the realtor’s commission. This payment structure is designed to encourage realtors to bring potential buyers to the builder’s projects without adding extra costs to the buyer. The commission is usually a percentage of the home’s sale price and is negotiated between the builder and the realtor.

For buyers, this arrangement means you get the benefit of professional representation and advice without directly paying for the realtor’s services. It’s essential to have this clear in your contract and understand that the builder’s sales price usually already includes the cost of the realtor’s commission.


Why Is It Worth Having an Agent for New Construction?

Having a real estate agent represent you in a new construction deal offers several significant advantages:

  1. Expertise and Knowledge: A seasoned agent understands the local market, the reputation of builders, and the nuances of new construction contracts. They provide invaluable insights and help you avoid potential pitfalls.

  2. Negotiation Skills: Realtors are skilled negotiators who can often secure better terms, upgrades, or even discounts that you might not be able to get on your own. They understand the leverage points in the construction process and can advocate on your behalf.

  3. Guidance Through the Process: The construction process can be complex and overwhelming. An agent guides you through each step, ensuring you understand the timelines, payment schedules, and what to expect next.

  4. Inspections and Quality Assurance: An agent can recommend reliable inspectors to review the construction at various stages, ensuring the builder meets all quality standards and any issues are promptly addressed.

  5. Problem Resolution: If problems or disputes arise during the construction, your agent helps mediate and find solutions, saving you time and stress.


The Value of an Agent in New Construction

While the excitement of building a new home is unparalleled, the process involves critical financial decisions and strategic planning. Knowing when to pay, understanding who covers the realtor’s fees, and recognizing the value of having an agent can make your journey smoother and more rewarding. If you're considering new construction, partnering with a knowledgeable real estate agent provides peace of mind and ensures your dream home becomes a reality with fewer headaches along the way.

By optimizing your understanding of the payment timelines, realtor responsibilities, and the value of having an agent, you’re better equipped to handle the complexities of new home construction. For personalized advice and assistance, consider working with an experienced real estate agent who can guide you through the process and help you make informed decisions.


Building your dream home can be a seamless and enjoyable experience with the right knowledge and professional support. Call Jake today with any questions and to get started building your better future!


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