New Home Construction
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New construction is plentiful in the metro area and you may be considering buying a newly built home. New construction has a ton of advantages, but many buyers make the false assumption that they can save money by not using their own Real Estate agent when purchasing a new home. This is a huge misconception!
Why buyers don’t think they need their own representation with a Real Estate agent…
Many buyers assume that the builder’s rep will help them with the purchase of their new home. They also assume that working with the internal representation will result in getting a better deal on their purchase.
However, the builder’s rep is working for the builder – not for you! Their success relies on getting the best deal for the builder, who is their employer. There legally can be no discounts passed on to you if you don’t use a Real Estate agent so there is no savings, in fact sometimes the opposite can occur.
When you use a Home Real Estate agent, you have a trusted expert working on your behalf.
You, the buyer, may not realize…
You may not know that the commission for buyer representation is legally part of the purchase price. If you are not using your own Real Estate agent, the builder simply receives an extra 3% from your purchase. Basically, it’s free for you to use a Home Real Estate agent. FREE.
You also may not know that the builder is not required to have a licensed agent working for them, and many do not. When you hire your own Real Estate agent you will be hiring a licensed agent who represents you, not the builder and knows all the local laws related to Real Estate. Your Real Estate agent looks out for YOUR best interests. The Builders agent or rep looks out for the BUILDER’S best interests. Sometimes the best interests are the same for the buyer and builder, but just as many times they are not.
Here’s a helpful list we’ve compiled – follow these “to dos” when working with a builder to have the best experience.
Hire Home Real Estate
This is simply a must. Like we’ve said, we are working for YOU. Home-builders can try to monopolize or condition the sale. They may only give you special “incentive” packages if you agree to use all of their representatives: lender, title company, and even insurance company! Home Real Estate can walk you through this process and make sure you are protected, as well as make sure you are getting the best deal. If you decide to use the builder’s lender, which many buyers do, we can make sure you get a good rate and fair closing costs. By bringing in your own agent, you’re asking your builder to be on their “best behavior.” Your builder doesn’t want to get a bad reputation, and will want the potential to create a good relationship with your agent, who will hopefully bring buyers their way in the future if the transaction is successful.
Don’t sign anything until you’ve worked out every detail.
Your builder may try to capitalize on the emotionality of buying a new home. Once you’ve become attached to this new home, they may try to get you to write up the contract quickly so you don’t lose it. But you absolutely must know what is in the contract, understand it and agree with it. No matter what the builder tells you, IF IT IS NOT IN WRITING IT MAY NOT HAPPEN. Everything will be done as it is written in the contract, so it’s important that you understand it clearly.
Your agent can be a great player on your team when going through and trying to understand the builder’s contract. Home Real Estate has been involved in literally hundreds of new home transactions and we know how to walk the buyer through the process and explain the complicated building processess.
Research the builder
Home Real Estate agents are experts on homes in the metro areas. This includes builders and their reputations. You want a builder that is not selling too many properties to investors – this can lead to creating a rental neighborhood and affects pride of ownership. Ideally, you also want your builder to be constructing homes of equal or greater value in your neighborhood to keep your property values high. However, this is difficult in some neighborhoods because the economy is difficult and people are affording and spending less on homes. We can help you sort this out and advise you on these items.
Research city plans
New neighborhoods are often in newly developing areas. Therefore, you want to know what is likely to happen in the area you are about to commit to. This includes your city’s plans for roads, public spaces, parks, and schools. You want confidence that your neighborhood is going to become a good place to live as it develops.
The perfect source for this? Home Real Estate , who likely already has this kind of information available. This makes the job so much easier.