When it comes time to buy new construction, most savvy homebuyers choose to hire an agent to look out for their best interests. Homebuilders have their own agents, lawyers, and contractors all working for them. In order to get the most for their money, buyers should hire representation before they even visit the model homes! If your buyers are reluctant to have you in their corner, highlight the following:
Real Value: Builders will typically pay commission to the buyer's agent and a portion can be given right back to the buyer to cover closing costs. The buyer doesn't pay this commission, the seller does. This is real cash value!
$300,000 home price x 2.8% commission x 10% contribution = $840 towards closing!
Negotiation: Builders will offer concessions and upgrades if you know what to ask for. Negotiation begins with the first visit and continues until the buyer takes possession.
Understand the Market: Buyers should always shop around but especially when buying a home, new construction or otherwise. Agents can share knowledge on what other builders are offering, and current market conditions.
Shop for Lenders: Buyers should also shop around for other mortgage solutions. Don't let them sign up for the builder's financing until they have done some comparison shopping!
Review All Terms and Contracts: The good agent will apply all due diligence in reviewing the agreement. Beyond just the purchase price, there may be other items to consider such as key milestone dates, guarantees, warranties, HOA, etc.
Upgrades: Model homes often include some upgrades that come at a cost. Provide your buyers with a list of upgrades and pricing. Let them know that the builder may increase the costs.
Research the Builder: Most builders will have both positive and negative reviews but if you notice a trend, you may want to ask for guarantees or protections for your client.
Inspection: The inspection is a key milestone in any home purchase and especially in new construction. Don't assume the home is perfect just because it is brand new.
Get it in Writing: Make sure you get everything in writing including the details of any warranties, guarantees, upgrades purchased, key milestone dates, and the ramifications of any errors or delays.
Consider the Future: Do some research about the neighborhood, the amenities, the public transit, traffic control, public schools, and nearby employers. All of these things can affect the future value of the home.
Instead of relying on the agents, employees and contractors of the builder, encourage your clients to hire their own agents. This is the best way to protect their interests, and get what they pay for, even when buying a new build home.
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