The idea of purchasing a 'brand new' property can sometimes be irresistibly tantalizing. After all, we all love the idea picking everything out ourselves, moving into a home that's a fresh and clean, of being that very first owner!
And while there is a tendency of builders to minimize the implications of the new construction purchase contract, the fact is those implications are anything BUT minimal! Like anything else outside our own areas of expertise, we generally have no idea how little we actually know about something until we're knee deep in problems - until it's too late!
This fabulous post was created by my colleague Sharon Alters with outstanding information for anyone even contemplating a new construction home purchase. And to preface that information there is one critical item you should understand:
Nearly every single builder requires that, if you want your own representation in your new construction purchase, your agent must accompany you on your very first visit to that new construction! If you walk in alone, you are basically giving that builder free reign. Why should you care?
- Even the very best builder uses paperwork that protects the builder's interests, even at the expense of the buyer's
- The builder is there to sell you as much as possible - not to protect your investment decisions. Some of the choices you might make can be to your detriment to the tune of tens of thousands of dollars ... and the builder will not tell you so (but the agent who represents you will!)
- Those nice, very helpful people working at the builder's model are there to SELL you a house. They work FOR the builder. They work to protect the builder's interests. They are not there to protect yours!
YOUR agent's job is to protect you (sometimes even against yourself). There is far too much evidence to the fact that people tend to 'forgive" just about anything for the sake of "new construction". But once that home has been purchased, it no longer qualifies as "new"....and the next buyers won't be so forgiving. Having a good agent in your corner can protect you and help insure that whatever decisions you make are in your best interests.
SO GIVE YOUR AGENT A CALL before heading over to those great looking model homes - You'll be grateful you did!
Do you think you can do it alone when buying a new home? Don't think a Realtor really contributes to the transaction? Think again. Here are some of the questions a knowledgeable agent can help you answer as you navigate your way through the new home buying process.
1. Are there any incentives being offered?
2. When is the best time to negotiate with a builder?
3. Do you know which closing costs a Builder typically pays? Do you know which ones the builder you are interested in pays?
4. What happens to my deposit if I can't buy the house?
5. What features are included in the house?
6. The model - know which are upgrades and which are included in the price.
7. Do you know which lots are the best ones to buy for resale? What is a lot premium?
8. Do you know which house is the best to buy for resale?
9. Which communities are the best investment for the type of house I want?
10. What happens if the builder doesn't finish the house on time?
11. What about having independent inspections? Do you know about slab and frame inspections?
12. What happens if items come up on the inspection list and the builder doesn't want to fix them?
13. What happens if I want to use my own mortgage company?
14. Do you know the reputations of all the local builders in your area? Do you know which ones to avoid? Which ones to use?
15. What are the advantages of an end loan? Construction perm loan?
16. Do you know third-party negotiations are more profitable for the Buyer? How detached do you think you are when you want something? How much of a poker face do you have?
17. When should you pay the asking price for new construction? What other things should you ask for?
18. Just who does the builder represent? When they say they will work to represent both parties, is that really possible?
19. Absolutely DO NOT do this or you may jeopardize your ability to be represented by your Realtor.
20. The Design Center - Which upgrades are essential for resale? Which ones can you skip?
21. Two essential tips for not making a bad investment - do you know them?
If you can answer all these questions, then you qualify as a new home specialist. If not, then you can greatly benefit with the help of an agent who is experienced in new home sales. Having sold probably more new homes than resale homes, I have learned a lot of nuances about the process. It can be a lot of fun or a frustrating headache. With an experienced Realtor who can help you avoid mistakes, the purchase of a new home is a great investment.