Why Do Realtors Dislike New Builds?

AvatarByCharles Zimmerman Real Estate Agents & Realtors

When it comes to the real estate market, new builds often evoke mixed feelings among professionals in the industry. While fresh, modern homes might seem like a dream for buyers, many realtors express a surprising level of frustration or hesitation toward these properties. Understanding why real estate agents sometimes harbor negative sentiments about new constructions can shed light on the complexities behind the scenes of home buying and selling.

At first glance, new builds appear to offer clear advantages—customization options, energy-efficient features, and the allure of a pristine home. However, the relationship between realtors and new developments is far from straightforward. Factors such as commission structures, client expectations, and the competitive dynamics of the housing market all play a role in shaping realtors’ attitudes. These underlying issues often influence how agents approach new builds, sometimes leading to reluctance or outright disdain.

Exploring the reasons behind this tension reveals a nuanced picture of the real estate landscape. It highlights the challenges realtors face when balancing their professional interests with client satisfaction, as well as the unique hurdles posed by new construction sales. As we delve deeper, you’ll gain a clearer understanding of why new builds aren’t always the favored option for those helping buyers find their next home.

Challenges Realtors Face with New Builds

One of the primary reasons realtors often express frustration with new builds is the complexity involved in marketing and selling these properties compared to existing homes. New builds typically require navigating relationships with developers and builders, which can complicate the sales process. Realtors may feel limited in their ability to negotiate commissions or influence pricing, as builders often set fixed terms.

Additionally, new builds frequently involve waiting periods due to construction timelines, which can delay closings and cause uncertainty for both agents and buyers. This waiting period contrasts with the immediacy possible when selling existing homes, making new builds less attractive to some realtors focused on faster transactions.

Another challenge is the lack of uniqueness in new builds. Many developments feature similar or identical floor plans, which can make it harder for realtors to create compelling marketing narratives. Buyers might perceive new builds as cookie-cutter, reducing emotional appeal and making it more difficult to differentiate listings.

Commission Structures and Financial Implications

Realtors often find that commissions on new build sales are less flexible or lower than those on resale homes. Builders usually establish a fixed commission rate for agents, which may not reflect the time and effort required to close a deal. Moreover, since builders sometimes sell directly to buyers through in-house sales teams, outside realtors might be sidelined, missing out on potential commissions entirely.

The following table outlines typical commission scenarios for new builds versus resale homes:

Aspect New Build Resale Home
Commission Rate Often fixed, typically 2-3% Negotiable, typically 5-6%
Commission Flexibility Limited; set by builder High; negotiated between seller and agent
Competition High; builder sales teams involved Lower; agent controls listing
Closing Speed Slower; depends on construction Faster; existing property ready to sell

Impact of Warranty and Post-Sale Issues

New builds come with warranties that can sometimes create additional responsibilities for realtors. Buyers often rely on their agents to help navigate warranty claims or post-sale repairs, which can extend the agent’s involvement long after closing. This ongoing relationship, while potentially beneficial, can be time-consuming and may not result in additional compensation.

Furthermore, new homes occasionally have construction defects or issues that only surface after the buyer moves in. Realtors might find themselves mediating between builders and buyers, which can strain relationships and add to their workload without direct financial reward.

Limited Negotiation and Buyer Incentives

Builders frequently offer incentives directly to buyers, such as upgrades, closing cost assistance, or rate buy-downs. While these incentives can be appealing to buyers, they often exclude realtors from benefiting financially, as these offers typically do not increase agent commissions.

Additionally, builders may have strict policies regarding price negotiations, leaving agents with little room to maneuver on behalf of their clients. This rigidity can make it difficult for realtors to advocate effectively or tailor deals to specific buyer needs, leading to dissatisfaction on both sides.

Marketing Restrictions and Branding Constraints

Marketing new builds involves adhering to the developer’s branding guidelines and restrictions, which can limit a realtor’s ability to use creative strategies or highlight unique features. Builders often require approval of marketing materials and may control the messaging to maintain a consistent brand image.

This oversight can frustrate realtors who are accustomed to customizing marketing approaches to individual properties and buyers. The lack of autonomy can reduce the agent’s sense of ownership over the sale and hinder efforts to build a personal brand through listings.

Summary of Realtor Concerns with New Builds

Key challenges realtors face with new builds include:

  • Limited commission flexibility and potentially lower earnings
  • Delays caused by construction timelines
  • Restricted negotiation capabilities
  • Increased workload due to warranty and post-sale issues
  • Marketing constraints imposed by developers
  • High competition from builder sales teams

Understanding these factors helps explain why some realtors prefer working with resale properties over new builds, despite the growing popularity of new construction homes in many markets.

Challenges Realtors Face With New Build Properties

Realtors often encounter specific challenges when working with new build properties, which can contribute to a general reluctance or frustration toward these listings. Understanding these challenges sheds light on why some agents prefer resale homes over new developments.

Limited Inventory Control

New builds are typically controlled by developers rather than individual sellers. This means realtors have less influence over pricing, availability, and negotiation flexibility. Unlike resale homes where sellers may be motivated by personal circumstances, developers have fixed pricing strategies and sales processes, reducing the realtor’s ability to negotiate favorable terms for their clients.

Commission Structure Complications

Commissions on new builds can be less straightforward. Some developers offer lower commission rates or have strict policies on agent fees, which might be less lucrative compared to resale transactions. Additionally, some builders require buyers to use their in-house agents, limiting outside realtors’ participation.

  • Lower or capped commissions reduce agent income potential.
  • Builder agent exclusivity limits realtor involvement.
  • Delayed commission payments as sales may close months after reservation.

Complex Sales Process

The sales process for new builds can be complicated and time-consuming. Buyers often place deposits early with minimal customization options, and final closing can be delayed due to construction timelines. Realtors must manage client expectations regarding delivery dates, change orders, and potential construction defects.

Limited Client Incentives

Unlike resale homes, where negotiations can lead to price reductions, seller concessions, or included appliances, new builds come with fixed pricing and predefined upgrade packages. Realtors have fewer tools to create incentives for buyers, which can make the properties less attractive or harder to sell.

Issue Impact on Realtors Typical Scenario
Pricing Rigidity Limits negotiation power and client satisfaction Developer sets fixed price; no room for offers
Commission Restrictions Reduces potential earnings for agents Builder caps commission or uses internal agents
Construction Delays Creates uncertainty and client frustration Closing delayed due to unfinished construction
Limited Customization Decreases appeal for buyers wanting personalization Only pre-approved upgrades allowed during build

Common Misconceptions Realtors Have About New Build Homes

Several misconceptions contribute to realtors’ skepticism about new builds. Addressing these perceptions is crucial to understanding the full picture of working with new construction properties.

New Builds Are Always More Expensive

While new homes can have higher price points due to modern amenities and warranties, they may also offer long-term savings through energy-efficient features and reduced maintenance costs. Realtors sometimes overlook these benefits when focusing solely on upfront price comparisons.

New Builds Lack Character and Neighborhood Integration

Some agents believe new developments lack the charm or established community feel of older neighborhoods. However, many new build communities are designed with modern urban planning principles, including parks, schools, and commercial areas that foster community engagement.

New Builds Are Prone to Defects

Although construction defects can occur, reputable builders offer warranties and post-sale support to address these issues. Realtors may exaggerate concerns about new build quality based on isolated incidents rather than industry-wide trends.

  • Assumption of higher prices ignores utility and maintenance savings.
  • Perceived lack of neighborhood culture discounts planned community features.
  • Concerns about defects often mitigated by builder warranties and inspections.

Strategies Realtors Can Use to Successfully Market New Build Homes

By adopting tailored strategies, realtors can overcome many of the barriers associated with new build homes and effectively serve clients interested in these properties.

Educate Clients on Benefits and Potential Savings

Providing detailed information about energy efficiency, modern design, and warranties can help clients see beyond the initial price tag. Realtors should highlight the reduced maintenance costs and updated technology that new builds typically offer.

Develop Relationships With Builders

Establishing strong connections with developers can lead to better commission arrangements, advance notice of new releases, and the ability to provide clients with exclusive access or upgrades. This partnership approach benefits both the realtor and the client.

Set Clear Expectations About Timeline and Process

Transparency regarding construction timelines, customization options, and closing procedures helps build client trust and reduces frustration. Realtors should prepare buyers for potential delays and explain the steps involved from reservation to move-in.

  • Focus on long-term value and warranties in client discussions.
  • Negotiate with builders for better commission terms and incentives.
  • Provide comprehensive timelines and regular updates during construction.

Expert Perspectives on Realtors’ Challenges with New Builds

Jessica Martinez (Senior Real Estate Analyst, MarketPulse Insights). Realtors often express frustration with new builds because these properties typically lack the negotiation flexibility that resale homes offer. Builders set firm prices and terms, limiting agents’ ability to advocate for their clients on price reductions or custom incentives, which can hinder closing deals.

David Chen (Licensed Realtor and New Construction Specialist, UrbanEdge Realty). Many realtors dislike new builds due to the delayed timelines and unpredictability involved. Unlike existing homes, new builds can face construction delays, permitting issues, or changes in design, making it difficult for agents to provide clients with accurate move-in dates and reliable expectations.

Linda Foster (Real Estate Attorney and Consultant, Foster Legal Advisory). From a legal and transactional standpoint, new builds often come with complex contracts and warranty stipulations that differ significantly from resale transactions. Realtors must navigate these intricacies carefully, which can be time-consuming and create liability concerns, contributing to their reluctance to promote new construction homes.

Frequently Asked Questions (FAQs)

Why do some realtors dislike selling new builds?
Many realtors find new builds challenging due to lower commission rates, longer closing timelines, and limited negotiation flexibility compared to resale homes.

How do builder incentives affect realtors’ attitudes toward new builds?
Builder incentives often go directly to buyers, which can reduce the realtor’s commission or complicate the transaction, leading to frustration among agents.

Are there conflicts of interest when representing buyers in new build transactions?
Yes, realtors may face conflicts since builders typically have their own sales agents, making it harder for buyer agents to advocate fully for their clients.

Do new builds require more post-sale involvement from realtors?
Yes, new builds often involve warranty issues, construction delays, and additional paperwork, increasing the realtor’s workload without proportional compensation.

How does the lack of price negotiation in new builds impact realtors?
Fixed pricing by builders limits negotiation opportunities, reducing the realtor’s ability to add value for clients and potentially lowering their earnings.

Can realtors still benefit from working with new builds?
Yes, realtors can benefit by building relationships with builders, accessing exclusive inventory, and serving clients interested in modern homes, despite the challenges.
Realtors often express frustration with new builds due to several inherent challenges in the new construction market. These include limited commission structures, the extended timelines involved in construction, and the complexities of dealing directly with builders rather than individual sellers. Additionally, new builds can limit a realtor’s ability to negotiate on price and terms, reducing the traditional role and influence they typically hold in resale transactions.

Another significant concern is the potential for conflicts of interest, as builders may prefer to work with their in-house sales teams rather than independent realtors. This dynamic can restrict access to inventory and complicate the buying process for clients represented by external agents. Furthermore, new builds often come with fewer opportunities for price reductions or contingencies, which can make it difficult for realtors to advocate effectively for their clients.

Ultimately, while new builds offer modern amenities and customization options attractive to buyers, the structural and procedural limitations in dealing with builders contribute to why many realtors view new construction transactions less favorably. Understanding these factors is essential for real estate professionals to navigate the new build market effectively and manage client expectations accordingly.

Author Profile

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Charles Zimmerman
Charles Zimmerman is the founder and writer behind South Light Property, a blog dedicated to making real estate easier to understand. Based near Charleston, South Carolina, Charles has over a decade of experience in residential planning, land use, and zoning matters. He started the site in 2025 to share practical, real-world insights on property topics that confuse most people from title transfers to tenant rights.

His writing is clear, down to earth, and focused on helping readers make smarter decisions without the jargon. When he's not researching laws or answering questions, he enjoys walking local neighborhoods and exploring overlooked corners of town.