Selling New Construction to Investors: An Agent Guide

Investor clients judge a new home as an asset. Here are the representation rules, tax numbers, and builder questions to settle before the contract.

Selling new construction to investors comes down to answering the questions an investor asks before a homebuyer would: what the home will rent for, what it costs to hold, how the tax rules treat it, and how the client gets out. Your job is to put those answers in front of the client before the contract, not after. Red Cedar Homes works with agents through its Realtor referral program, and the steps below apply to any builder in the Carolinas.

What investor clients want from new construction

An investor client judges a new home as an asset first. Four things usually decide the deal:

A known price. The investor needs a stated price and priced options before signing, so the math does not move after contract.
A start date for income. A rental produces nothing until it is finished and leased. The build timeline is part of the return math.
Holding costs. Property tax, insurance, HOA dues, and loan interest set the floor for the rent the home must earn.
An exit. The client should know before signing whether the plan is to sell, lease, or hold, because the plan and finish level should match the exit.

For the rental side of that math, send your client to the companion guide on buying new construction as a rental property. It walks through the rent, cost, and cash flow inputs line by line.

Three ways investors buy new construction

Before you tour, find out which of these your client wants. Each one changes the timeline and the risk.

Finished or move-in ready home. The client buys a completed house at a list price and can lease it soon after closing. Start with the homes available now, and with individual Curated Homes built on their own homesites.
To-be-built home. The client picks a homesite, plan, and selections, then waits for construction. Red Cedar's homebuyer process runs about 24 weeks in seven steps, from homesite selection to closing.
Fee build. The client owns the lot and the finished house, and the builder builds under contract on a vertical price fixed at signing. Read how a fee build works before you bring it to a client, because the client carries the land, the carry, and the market risk.

Representation rules before selling new construction to investors

The rules for working with buyers changed in 2024, and South Carolina and North Carolina apply them differently. Get the paperwork right before the first showing.

The national practice change

Since August 17, 2024, NAR's practice changes require agents working with a buyer to enter into a written buyer agreement before the buyer tours a home. Offers of compensation are prohibited on MLSs. They remain an option off-MLS through negotiation. The changes do not require an agency agreement or dictate the type of relationship.

South Carolina

Disclosure first. S.C. Code § 40-57-370 requires the Commission's Disclosure of Real Estate Brokerage Relationships form at the first practical opportunity when you have substantive contact. The SC Real Estate Commission's guidance takes the position that the form must be provided before showing any property.
Client status is written. Under the Commission's form, a buyer becomes a client by signing a formal buyer agency agreement. A buyer who does not is a customer, with basic services only.
No builder's exemption. The Commission states that South Carolina law has no provision exempting builder's agents. A builder's on-site agent in SC must be licensed.

North Carolina

Agency can start orally. The NC Real Estate Commission says its rules allow an oral buyer agency agreement until an offer is written, but the NAR settlement still requires a written agreement before touring.
No non-agent role. The Commission notes that a North Carolina broker cannot be a non-agent. You represent the buyer or the seller.
No compensation contingency. Rule 58A .0112 prohibits making a buyer's offer contingent on a compensation agreement.

The tax numbers to put in front of the client

Investors often learn the property tax rules after closing. Tell them before.

South Carolina: 6% for rentals

South Carolina assesses an owner-occupied legal residence at 4% of fair market value and all other real property not otherwise classified at 6% (S.C. Code § 12-43-220). A rental is assessed at 6%. A home also loses eligibility for 4% if it is rented for more than 72 days in a calendar year. If your client plans to live in the home first and rent it later, the ratio changes when the use does. The details are in the guide to South Carolina property tax and the 4% rate.

North Carolina: one standard

North Carolina assesses all property at its true value or use value under G.S. 105-284. It does not use South Carolina's 4% and 6% ratios, so the owner-occupant versus rental split your SC clients face does not exist in that form in Charlotte. Run the county and city tax rates on the actual parcel.

Depreciation starts at placed in service

IRS Publication 527 says you place rental property in service when it is ready and available for rent. Under GDS, residential rental property is depreciated over 27.5 years. Land cannot be depreciated, so the purchase price must be split between land and building.

An illustration only, using round numbers: a $400,000 purchase with $80,000 allocated to land leaves $320,000 of building basis. $320,000 divided by 27.5 is about $11,636 a year. The land allocation, the closing costs added to basis, and the result belong to your client and their CPA.

Questions to ask the builder on an investor deal

Is the price stated, and are options priced before contract?
What is included in the base price, and what is an upgrade? Use the checklist in what is included in a new construction price.
Do the recorded covenants allow leasing? Ask for the declaration, not a summary, and look for minimum lease terms and rental caps.
Can the buyer take title in an LLC, and does the contract allow assignment?
What is the build timeline, and what happens to the closing date if it slips?
What warranty applies, who handles claims, and does coverage continue while a tenant lives in the home?
Does the builder offer a way to lease or manage the home after closing?

Where Red Cedar fits

Red Cedar Homes builds in Charlotte, Greenville, and Spartanburg, with Hickory, Statesville, Lancaster, Clinton, and the Lake Keowee and Clemson corridor coming soon. Homes carry a stated price, with options priced before contract. On a fee build, the owner's exits are to sell with their own agent or Red Cedar's, lease the home through Red Cedar Homes, or hold it.

Frequently asked questions

Do I need a signed buyer agreement before showing a new home to an investor?

Yes, if you are an MLS participant subject to the NAR practice changes. Since August 17, 2024, agents working with a buyer must have a written buyer agreement before the buyer tours a home. In South Carolina, also give the brokerage relationships disclosure form before showing any property.

How is a new rental home taxed in South Carolina?

A rental is assessed at 6% of fair market value under S.C. Code § 12-43-220. The 4% ratio is only for a legal residence, and a home rented more than 72 days in a calendar year does not qualify.

When can an investor start depreciating a new rental home?

When it is placed in service, which IRS Publication 527 describes as ready and available for rent. Residential rental property is depreciated over 27.5 years under GDS, and the land portion of the price is never depreciated. Your client's CPA sets the land allocation.

Can an investor client buy a to-be-built home instead of a finished one?

Yes. The tradeoff is time. A to-be-built home lets the client choose the homesite and plan, but no rent comes in until it is finished. Red Cedar's homebuyer process runs about 24 weeks from homesite selection to closing.

Join the Realtor program

If you have investor clients looking at new homes in the Carolinas, register with the Red Cedar Homes Realtor program and select Realtor Partnership on the form. Ask for the program terms in writing before you bring a client. To talk first, call 980-890-9381.

Sources

Figures as of October 2026. This is general information, not legal or tax advice. Talk to your attorney or CPA about your situation.

A Realtor's Guide to Selling New Construction to Investor Clients