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Ten Tips for New Home Buyers ~ Phoenix Valley ~ If You Want Buyer Representation - Don't Go Alone!

By
Real Estate Broker/Owner with Homes Arizona Real Estate LLC

As a buyer, have you ever wandered into a new home community to "look" at their models? Did you happen to notice the sign on the door that read something like this: "If you come into this community without a Realtor, you will not be able to have Realtor representation," "Or if you don't bring your Realtor the first time....", or "Your Realtor must accompany you....." Bottom line, the builder is trying to warn you that if you come into the models without a Realtor, you will be on your own - without personal representation!

New Homes in Phoenix ValleyIn the Phoenix Valley, there are so many new home builders with builder agents ready to assist you with your purchase, that it doesn't occur to many home buyers - that THEY need a professional Realtor to help them with the transaction and purchase of a brand new home. I've listed just "some" of the reasons I believe that a buyer needs a professional Realtor to help them purchase a resale or new home, or sell their home.

For instance - here are some questions to consider when going out alone to find or look at a new home!

1. Buyers, are you aware that the agent sitting at the new home siteBuyers looking at a new home works for and represents the builder? They do not represent you as the buyer. So that means, if there are any misunderstandings or concerns on your part, that you - alone - must work it out - somehow - with the builder. I have sat in on many new home sales transactions where the builder's agent will say: "I do not represent you - I represent the builder." It's a disclosure to you, the buyer.

2. Are you aware that the builder pays the agent? It has no reflection on what you pay for the home - that commission is paid by the seller (builder) to the buyer (your agent) agent.

3. Are you aware that if you walk into a new subdivision to just check out the models, that you will no longer be able to have buyer representation? Many times, without thought, the looker/buyer signs a little card with their name and address. The builder then keeps track of who has been in their homes. That prevents you from bringing in a Realtor to represent you.

Woman confused when looking at new home contract4. Are you familiar with all of the builders, their customary practice, their customer service, the reputation of the builder? Do you think this might be important to you as a buyer?

5. Are you aware, as a buyer, that the builder has their "own" contract? It is not the one that is used by the Arizona Association of Realtors which is used always or almost always, on a resale contract. Many builder contracts (most) are slanted to favor the builder - not the buyer.

6. Do you know what a Public Report is - and why it might be important to you to "read" before committing to build a home with that builder in that area?

7. Have you ever read/looked at the CC&R's before you sign aConfused at Public Report contract.....do you think it might be important to know what the rules are for that community? How about what is projected to be coming in around you? Airport? Freeway?

8. How about your earnest deposit? Colorizing fee? Are they refundable to you if you don't qualify, or if things change drastically before you're ready to move in.

9. Does the builder accept a contingency - meaning that they are willing to let you start building a home while you are in the process of selling your home? What if your home that you are selling does not sell, or if it doesn't close as planned? What are your options?

10. Are you financing through the builder - or your own lender - and do you shop for your loan instead of just accepting the builder's incentives?

Bottom line: if you are not a professional Realtor, and familiar with the basics of building a new home, your rights, your remedies - never mind the recommendations made by a Realtor as to the areas that could be affected by potential freeways, potential growth, etc., then my suggestion: find yourself a professional with whom you feel comfortable, trust, and one that knows the builders, the areas, and will be of assistance to you in deciding which floor plan and why, how many bedrooms, garage size, lot size and location, etc. You could be saving a TON of money by working with a professional Realtor.Save a ton of cash

The market is turning. Don't wait too long! Many of the builders are offering great incentives to buy their homes, including granite counter tops, appliances, landscaping, and huge discounts for their inventory homes. Call me.......I'll be happy to help you find your next home - and list the one you live in, marketing it all over the internet as well as the MLS.

Today, May 21, we have 54,200 active listings (many of these are not in Maricopa or Pinal County), as well as 7,497 currently pending - or under contract. Every day, the active listings are going down, and the pending are going up. What does this mean for you? Probably never a better time than now to buy a home or a rental! Many experts believe that it will be a long time - if ever - that our market will be any better for a buyer. Interest rates are low, there are many available listings, and the sellers typically will negotiate! New homes are available with many builders offering incentives of granite, appliance, yard landscaping and great loans........don't be one of those who waits to see "how low it will go" before you make your move. That's when everyone else will be making it as well, and the bargains will have disappeared.

Thinking about relocating to Mesa, Arizona or the Phoenix Valley? Call me at: 480.216-3334 for information on purchasing or selling a home in Mesa, Arizona or surrounding towns. OR email me: Teri@TeriEllis.com. OR visit one of my websites: HomesAzRE.com, MoveToSunnyAz, or AzLadyInRed.com, for photos of models, floorplans, new construction, resale and more.

Comments (13)

Cynthia Tilghman, RealtorĀ® Onslow County NC Home Specialist
Kingsbridge Realty, Inc - Hubert, NC

Teri,
Excellent, a little long for my short attention span but very good information for Buyers.  Good job.

May 21, 2008 12:10 PM
Marchel Peterson
Results Realty - Spring, TX
Spring TX Real Estate E-Pro

TERI, Wow if the buyer even comes in without their agent they are not represented. For the most part that is not the case in our area.  Point in Case we just had a buyer right our name down.  Now if they don't say something at the start that is another story.

Very good post because you are so right the new home sales person works for the builder.

May 21, 2008 01:44 PM
Katerina Gasset
The Gasset Group & Get It Done For Me Virtual Services - Provo, UT
Amplify Your Real Estate & Life Dreams!

Teri- This is a wonderful post about why buyers need an agent to represent them in new home developments. Most buyers don't know this information. They don't understand that they need someone on their side.

May 21, 2008 01:45 PM
Mesa, Arizona Real Estate Mesa Arizona Realtor
Homes Arizona Real Estate LLC - Mesa, AZ
AzLadyInRed

Cynthia, yeah, I know it's long...too long for even me. ;-) More for buyers though. Thanks for commenting though.

Marchel, typically the builders "require" us to be with them. There are exceptions with "certain" builders, but the buyers need to know what they're getting themselves into without a Realtor to assist them in the decision making process. ;-)

Katerina, thanks....they really don't know. No matter how we try and educate buyers, they think they can go out on their own...without anyone in their corner. ;-)

Pepper

May 21, 2008 02:31 PM
Alan 'AJ' Nisen California Contra Costa Mortgage Officer
A Large Bank in America - Lafayette, CA

Teri, I sure learned a lot.  I am going to use this information with my buyers looking at new construction.  AJ

May 21, 2008 03:52 PM
Mesa, Arizona Real Estate Mesa Arizona Realtor
Homes Arizona Real Estate LLC - Mesa, AZ
AzLadyInRed

AJ, thanks for coming by. Keep in mind, that in California, builders may not even cooperate with a buyer's agent. Rules are definitely unique in each state. ;-)

Pepper

May 21, 2008 04:34 PM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Terri it makes so much sense for a buyer to have representation, especially in new construction! There is so much that goes into building a home and so many considerations involved with it.

May 22, 2008 12:07 AM
Justin Williams
Independent - Virginia Beach, VA
Loan Officer

Good point of view insight you have here.  I didn't realize that there was such a strong influence with new construction communitys.

May 22, 2008 11:43 AM
Mesa, Arizona Real Estate Mesa Arizona Realtor
Homes Arizona Real Estate LLC - Mesa, AZ
AzLadyInRed

Hi Bill, unfortunately many buyers don't realize what they can be up against without any representation! ;-)

Justin, builders are businesses as well....they don't want to have to pay Realtors if they don't have to. ;-)

Pepper

May 22, 2008 01:23 PM
Susan Neal
RE/MAX Gold, Fair Oaks - Fair Oaks, CA
Fair Oaks CA & Sacramento Area Real Estate Broker

Great post!  Would you mind if I copied it, edited it to fit my needs and used it myself?  It is especially good for Realtors to keep informed about new home developments in their area, as we can really be of service to buyers, AND most of the developers in our area are offering huge incentives to agents who bring clients in. 

Some of them say you will get 10% commission for just introducing them to a buyer, and they will do the rest while you walk away.  I don't know if I would feel comfortable doing that - I'd feel I was abandoning my client to whatever the developer wanted to do to them.  I'm sure most of them are legit, but so many of them are in terrible financial straits (and some have had to abandon their projects half sold), that I want to make sure I get as many assurances in writing that I can that my clients won't be hurt in some way.

No contract is foolproof, however, and any agent should make sure that their clients understand they are not acting as guarantors that everything will be exactly as they hope or expect or were promised. If a builder goes broke, they simply may not be able to put up the promised privacy wall or greenbelt or ?  You can sue, but if they have filed for bankruptcy protection, you won't get much, if anything.  So, buyers who walk into a new home with no representation are really gambling with their investment.  For most, it may be okay, but for many, there may be big losses.

Jun 21, 2008 07:05 AM
Mesa, Arizona Real Estate Mesa Arizona Realtor
Homes Arizona Real Estate LLC - Mesa, AZ
AzLadyInRed

Susan, not at all. Please make it your very own. ;-) I'm always flattered when someone chooses to quote me or use my posts. ;-)

Pepper

Jun 21, 2008 11:54 AM
Andrew Monaghan
The Monaghan Group - Glendale, AZ
CRS, GRI, EPro Associate Broker

Great points, i have always told my clients the nice friendly person behind the desk is not looking out for you.

the other thing is they can have representation and advice just not paid for by the seller

Jun 22, 2008 07:06 AM
Mesa, Arizona Real Estate Mesa Arizona Realtor
Homes Arizona Real Estate LLC - Mesa, AZ
AzLadyInRed

Andrew, yep, it's hard to be completely objective when it's your pocketbook....of course I'm not saying they're dishonest, but I've known some new home agents to twist their representations. How's that one? ;-)

Pepper

Jun 22, 2008 11:58 AM