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Many new home buyers believe if they buy directly from the builder they will save money. This generally is not the case. Most new home builders are members of the Builder Realtor Council. The BRC's builder members agree to pay Brokers a selling commission if they are involved in the transaction on behalf of a buyer. If a Broker is not involved in the purchase transaction, the builder retains that commission money. That money is not offered to the buyer in the form of a credit or a reduction in purchase price. Therefore, there is no financial savings for the buyer by not using a Broker in the transaction.

More important is the fact that the buyer is negotiating with the builder without representation. In Colorado, the Colorado Real Estate Commission prepares and approves purchase contracts that are intended to protect the rights of both the buyer and seller. New home builders do not fall under the rules and regulations of the Colorado Real Estate Commission, and as a result, do not have to comply with standard regulations including the preparation and use of commission-approved forms. The builder purchase contract forms are traditionally worded to favor the builder - they are not drafted with the intent to protect the interests of the buyer.

Surprisingly, most buyers who attempt to save money by negotiating directly with the builder without the expertise and guidance of a Broker also choose not to retain an attorney to review the builder purchase contract. Usually, the attorney and the Broker are contacted after problems are discovered - often when it is too late to eliminate the problem. This "after-the-fact" approach can be very costly to the buyer.

Understanding that there is no financial savings to negotiate with the builder without a Broker, it is important to know that Brokers are familiar with new home construction and are accustomed to working with builders and their purchase contracts. Brokers can recommend the inclusion of language in builder purchase contracts that protect the buyer. For example, most Brokers recommend to buyers that they retain the services of an expert (i.e., architect, building inspector, engineer) and have them visit the property while it is under construction and following the completion of construction to insure that any problems are addressed properly. The Broker will often recommend the inclusion of language that provides for these inspections as well as "walk through" of the property as a contingency to closing.

Brokers can also address other concerns that protect the buyer's interest (i.e., receipt, review and approval of title work and homeowner association bylaws and covenants) so that the buyer can terminate the builder purchase contract in the event conditions in any of the documents do not meet with their approval.

Brokers may also be able to negotiate upgrades at no additional costs, closing extensions without penalty, recommendations of experts, other improvements (i.e., landscaping, security systems, sprinkler systems), radon mitigation before and following the purchase of the property, and address a number of other significant issues that directly impact the buyer's purchase and eventual resale of the property.