WAIT! Don’t Buy Brand New Construction without an Agent
by Stephen Turner REALTOR
Today’s Retailers are working hard to make it easier than ever to buy from them. Guess it’s only fitting that most homebuilders are trying to do the same. Fancy model or showcase homes extended retail hours, trained & designated sales professions, all working together to hopefully create a “better buyer experience “for you. Yet most importantly they produce higher profits for home builders! Why else would they invest so heavily in these areas of their business? As such, it’s more important than ever to have an agent on your side when you’re ready to buy or build a brand-new home of your own.
When looking to buy new construction, a REALTOR with New Construction experience is the best resource you can have on your side to help protect you through this process. These 5 reasons are just the tip of the Iceberg, of why you need an agent on your side when building,
#1 New Construction is a more complicated transaction then a Resale purchase.
Don’t get me wrong, with Resales there are still many moving parts that need help from a professional to ensure the transaction make it through settlement. However, when Building a Brand New Home those same challenges exist, plus there are even more chances for hang-ups and confusion. The first of course is the fact the home is probably not even built yet! There may be twice as many financing options when building, and figuring out which one is best for your situation is best handled by a professional.
After the financing, you still have the process of construction to make it through. Over the years I’ve seen the average home take over 25 Trade partners and vendors working with the builder, to be built. Framers, Concrete crews, lumber suppliers, painters and the list goes on and on. Each working with their own schedule and when 1 misses a date it pushes all others behind. A good agent will work with your builder and stay on top of the schedule to remain as close to the original building timeline as possible, as each delay can put your financing & interest rate in jeopardy as well as increase the possibilities of being homeless if your current place is under contract or rented already. Your agent should serve as the hub of communications between the builder, the lender, title company, inspectors and yourself.
#2 Working through the Builder’s pricing.
A builder’s list price is near and dear to his heart. It’s in his best interest to ensure prices remain consistent or increasing, as they have other homes to build in the community. Once the price of one home comes down, it affects the value of all homes going forward. This is also why trying to work with a builder “directly to save money without a REALTOR” involved, usually doesn’t work.
Also, builders are a different kind of seller. There’s no emotional attachment to the home, no need to “sell today so they can relocate and be closer to family”. Instead, they are in it for a Profit. It’s their business. All the more reason builders are very reluctant to flex much if at all, on their pricing.
Where an experienced agent helps, is being able to quickly pull up the public record info for all similar sales in and around the community and help guide you (and the builder if need be) on what the market, as the market sets the price. An agent may also have been involved in previous sales in the community or have partners who have been, and can share info which may not have been shown in public record. In addition, a professional REALTOR is a skilled negotiator and would have the ability to help negotiate other favorable terms for buyers and builders, such as timing, financing help, incentives and free options.
#3 Selecting the RIGHT Builder for the Job!
Not all homebuilders are created equal. Today’s world of homebuilding includes Custom Builders, SPEC Builders, Production Builders, remodelers and the small independent (I’ve jokingly referred to them in the past as “Bob & A Truck Builders”) ones. Each type of builder has their own strengths, gaps, and weaknesses, making them ideal for some jobs but not for others. While you can read more about each type of builder over the course of my other articles, an experienced real estate professional would be able to help you select the right one for the home you wish to build.
Builder’s reputations, quality, and service vary greatly too. A local experienced REALTOR would be able to help fill you in on some of the experiences their buyers have had with builders in your area. Or even introduce you to past clients of that builder who can offer advice on what to expect: the good, the bad and the ugly. Think of how much time, frustration and money this could save you in the long run.
#4 CYA, Cover your Butt!
Remember, no matter how nice the builder’s sales staff or agents are, they are responsible to be looking out for the builder’s best interest. Builder’s want less risk & less accountability and have tried to ensure their buying process passes as much as possible on to the buyer, instead of themselves. So then who is looking out for you? Simply put, that’s your responsibility. Or better yet, hire an experienced professional to protect you!
When you select an agent to protect your best interest, you’ll have someone there to help guide you through the process and make sure you understand the requirements each step of the way. Also, they can help review all the “builder’s paperwork” and point out areas that may customarily be obligations of the seller, that the builder is trying to pass on to you. If you wouldn’t go to court without an attorney, don’t buy from a builder without your own professional REALTOR representation!
#5 Investment Protection
A new home is usually the largest investment or purchase a buyer makes in their life. You’re investing time, money and your family’s future into this home. As such you should really consider every step of the buying process as well as the features of the home itself.
You may not do a lot of cooking so you want a small kitchen, large family room, and 2 spacious bedrooms. Yet if you were to buy a home like that, what would be the future value of such a home? Would others want 3 or 4 Bedrooms instead of your 2 bedrooms? How big is the market for a home like that and if resold, how long would it sit on the market (still costing you) to finally sell?
An experienced Real Estate Professional can help you with decisions during the process which can increase your future value. Sure, a finished basement would add more sq. ft. to the home and increase the value, but by how much? Does it cover the cost the builder is looking to charge? What options should you consider now, vs doing in the future? Today’s builders have “profit centers” and design showrooms set up to extract additional money from you at every step in the process, yet a good agent can help you keep an eye on your budget, value and staying on goal. All of which adds up to a stronger value for your largest financial instrument.
Again, there are many more reasons why you need an agent to help you build your next home. So, if you're just thinking of looking at new homes or considering building in the future, just wait and contact a professional REALTOR fist! Your family, your finances and your future will be glad you did.
Stephen Turner is a Certified New Home Sales Professional (CSP) with the National Association of Home Builders and REALTOR with Coldwell Banker Residential Brokerage. Since 1997 Steve has been actively involved in the homebuilding world of the Mid-Atlantic States (MD, DE, PA & Washington DC) having served both Builders and Buyers. He continues to remain involved in both the national and local builder’s associations and specializes in helping buyers own brand new homes of their own. When looking to buy or build your next home, contact Steve Turner first. He’ll be able to help you or find another certified professional in your area to best serve you. Find him at www.TheSteveTurner.com 717-461-2321 or on Facebook