It’s a common
belief misconception that when buying a new construction home you don’t need a Realtor because new home builders seldom negotiate on purchase price. While that is mostly true here are 10 other reasons you need to enlist the services of a licensed Realtor who knows the ins and outs of the new home construction market.
1. Not all inventory is listed online
In today’s hot market many new homes are being pre-sold, even before foundations are poured. Because of this many builders are not listing their homes for sale on the Multiple Listing Service. If you are relying on automated internet searches to find your new construction dream home you’re likely to miss out. Partnering with a Realtor that is keyed in to the offerings of builders in the area is crucial to finding the home that best suits your needs.
2. Your best interests
Before you walk into a model home and speak with the onsite agent understand that they are representing the builder and not your best interests. That’s not to say they are out to get you, certainly not. But if they are looking out for the builder’s interests, shouldn’t you have someone looking out for your best interests? Some builders require you to register with them on your first visit and to list your Realtor’s name on the registration. If you don’t list a Realtor’s name on your registration, some builders will make enlisting the services of an agent down the road somewhat complicated (more on that later).
3. Clear expectations
When you walk into a model home you’re going to see the best of what a builder has to offer, and this is great to get a feel for what the builder can do. However, make no mistake about it, the premium finishes come at a premium price over and above the base price that is listed in the literature that the onsite sales agent hands you. A Realtor will be able to discern what is included in the standard features and what has been upgraded.
4. Get a warranty and know what is covered
Most builders will provide a warranty on their homes but each will have different terms, conditions, and timelines. Have your Realtor obtain warranty information from your builder early in the process so you can address any concerns you may have before entering into a contract.
5. Negotiations and incentives
As stated earlier, builders seldom negotiate price on their new homes. Not to say that it can’t be done (we’ve done it), but it is not the norm. That doesn’t mean you can’t walk away with some hefty concessions. Maybe it’s the end of the quarter and the builder needs to push to reach sales goals and shareholder expectations. Or maybe we’re approaching the holiday season and builders know home sales are going to slow. A Realtor with experience in new construction can get creative in negotiations and look for discounts on premium lots and upgrades, or possibly have the builder cover some closing costs. Your Realtor will know the best times to buy and how to take advantage of these builder-offered incentives.
6. Research your lenders
Speaking of incentives, many builders have their own preferred lenders and you can get some pretty tempting incentives for using their lender. In some instances using the builder’s preferred lender may be the best option, in other cases it may not. Your Realtor should be able to find out if you’re required to use the builder’s lender, what the incentives and terms will be, and if there are any contractual differences if you want to use your own lender.
7. Get it in writing
Once you’ve found the right builder, the perfect floor plan, a beautiful lot, and have negotiated terms and conditions, make sure everything that has been negotiated and all of your expectations are in writing. This can include finishes, fixtures, timelines, etc. If it’s not written down and signed by both parties it’s not a binding agreement. An experienced Realtor will know how to communicate your concerns and ensure they’re addressed in writing.
8. Builders don’t use standardized purchase contracts
If you’ve bought a few resale homes in your lifetime you have probably become somewhat familiar with the standard Offer to Purchase and Contract that most real estate agencies use (Form 2-T here in North Carolina). Even though these forms are updated regularly, the overall substance remains somewhat consistent. However, most home builders use their own purchase contracts that are far different from the 2-T, and vary widely from builder to builder. You’ll want a Realtor that is familiar in working with different home builders and that has knowledge of the different contracts they require.
9. Get a home inspection
It goes against common logic because we’re talking about new construction, but you really should get an inspection, even for a new home. The simple fact is that we’re all human and make mistakes; the building industry is no exception. Your Realtor should be able to provide a referral to an licensed home inspector that has experience in making sure everything is safe and up to code in new construction. Fortunately new construction inspections are generally less expensive than, say, an inspection on a home built in 1900. Still have doubts you need in inspection on a new home? This blog post will change your mind.
10. It may cost you nothing and save you thousands
Earlier we said that registration on your first visit to a new development is often required by the onsite sales agent, and that enlisting the services of a Realtor after you’ve registered can become complicated. Many new home buyers think they can get a better deal from the builder if they don’t have representation because the builder will not have to pay a commission to a Realtor. The fact of the matter is that builders have already worked the cost of commission into their marketing budgets for their homes and will not reduce the price if you’re not working with a Realtor. It just means extra money to their bottom line. If the builder is paying the commission why not have an experienced Realtor look out for your best interests and help negotiate the best terms for you?
Jimmy Swann, your personal guide when buying new construction
When it comes to navigating the new construction home buying process, there are few Realtors that have the experience of Jimmy Swann. With 18 years of new home sales experience with most major and local builders, including Del Webb, Pulte Homes, Centex, DR Horton, Beazer, CalAtlantic, Lennar, and Meritage, Jimmy has first-hand knowledge of how these builders work from the inside and is uniquely qualified to act as your EXCLUSIVE buyer representative. Jimmy and the rest of the team at Swann Group Realty will ensure that you are properly represented at the following meetings: Pre-Construction, Frame Walks, Mechanical Inspections, Final Walk-Through, Final Closing, and Post-Closing Warranty Follow-up. These are just some of the meetings that Swann Group Realty will guide you through in representing YOUR best interests.