Sometimes there is a lot of confusion when it comes to buying a New Build Home. It is not like buying a new car. Walking onto a builders’ site armed only with your great negotiating ability is not enough. There are too many factors (legal, personal, ethical…) that play huge roles in what is possibly your largest investment, ever. Going it “alone” may yield unexpected results and “settling” for things that you are not happy with.
Imagine if you could have a trained professional on your side throughout the whole process. You can. When you arm yourself with a licensed Real Estate Agent, you will benefit from all of their experience, education and professional representation. A Real Estate Agent will be on your side.
To help dissipate some of the confusion regarding buying a New Build Home, and some of the benefits of having a Real Estate Agent on your side, here are some common questions and answers that may be useful.
Will a builder reduce the price if you do not use an agent?
No, generally, builders do not like fluctuations in price that may influence future appraisals, and are not interested in increasing incentives that they already offer. Most new homes have in-house attendants and Real Estate Agent co-op’s already built into the price, and is simply returned to the builder’s expense fund if a Real Estate Agent is not a part of the deal. Basically, a Real Estate Agent’s services are inclusive in the builder’s expense package. What does this mean? Well, if you use a licensed Real Estate Agent, not only do you benefit from having the personal representation that you deserve, but it is also FREE- costing you, the buyer, nothing!
Why is it important to pre-qualify?
Often, prospective buyers will look at model homes in random locations without knowing how much house they can afford. This can lead them into an area where the starting base prices are beyond their reach. Falling in love with a particular model only leads to disappointment and discouragement. When you hire a licensed Real Estate Agent as your personal representative, they can get you connected with a reputable mortgage lender with just a simple phone call. Now, you are armed with the knowledge of how much home you can afford. Now you are a more powerful buyer.
What should you know about new home sales representatives?
Although the attendants you will find at the model homes are very friendly and knowledgeable, you must remember that they are the builder’s employees. They represent the builder and you are a customer to whom they owe no fiduciary responsibility. They are there to sell homes and promote all the standard features, incentives, neighborhood, and amenities. Other considerations that may affect resale or living conditions will not be volunteered unless the right questions are asked. A Real Estate Agent will represent you and your best interests. They will ask the necessary questions to get the answers you will need to make good choices and good decisions.
What should you know about Builder Contracts?
Builders’ contracts weigh heavily favor the builder. This contract will do everything in it’s power to alleviate any responsibility from the Builder and place plenty of liablility on the Buyer. Thus, it is imperative that you understand some of the advantages the seller reserves. Before meeting with the builder’s representative to write a contract, a Real Estate Agent will have a pre-contract meeting to discuss all items of importance. Furthermore, most builders do not use state-approved contracts. Without the security of state approved contracts, there are many opportunities for error, misrepresentation and misunderstanding. A Real Estate Agent can help navigate the contract and support you through each process.
Here are some more questions that should be considered when looking to buy a new home. These are important questions that you and your Real Estate Agent can go over – making sure that you are completely satisfied with your new home.
1. What is the condition of the soil that they are they building on?
2. Will the lot location affect your resale value or time on market?
a. How close is the lot to existing or future commercial zoning?
b. Is there a school or other public attraction close by that may increase traffic through your street?
c. What directions will the house face? This will determine natural light, melting snow, views, warmth, etc.
d. Does the lot slope? Think about the expense of landscaping and possible loss of usable space. Or, consider that you may be able to build a walk out, or have better drainage and views.
e. Is there a park across the street or behind your house? Is it leisure or sports park, or a playground? The difference could mean a nuisance or an enjoyable relaxing place.
f. How will future neighborhood development affect present views? Have an attendant at the model will have a master plan of future filing – ask to see it.
2. What type of drainage is the builder planning? Sump pit, French-drain, or both? Will the pump be provided? Are there erosion concerns?
3. What are the incentives?
a. Are they contingent on using the builder’s lender?
b. What are the options for using these incentives? (upgrades, rate buy-down, debt payoff, purchase price reduction…)
4. What does the Builder’s Warranty cover?
5. What options are available? (Be careful… Some options add value, and some do not.)
6. Who is responsible for the HOA? What are the covenants and restrictions?
Considering the fact that as a buyer of a new home, a Real Estate Agent’s services are free, there is simply not a good reason to enter in to such a significant transaction without professional representation. Why go it alone? Posted By: Springs Realty Scoop – Colorado Springs Real Estate