If you want to get the most out of your investment, not pay outrageous prices for upgrades, and make sure you are protected during the process – YES! The best part of it all, it’s FREE to you! When a home closes the seller agent (the Builder in this case) and the buyer agent split a set commission percentage. If you elect to use the Builder’s Representative to also represent you, they take the entire commission percentage and only the Builder’s best interest was taken into consideration. Take our advice and make sure you have a Buyer’s Agent on your side that is well versed in new construction contracts and transactions!
We have come up with five important things you’ll want to keep in mind when purchasing new construction:
1. It is Important to Have a Knowledgeable Buyer’s Agent to Help Guide You Through the New Construction Process to Get the Most Out of Your Investment!
Builder contracts and the new construction building process is much different than buying a resale home. Even if you have purchased a home before and feel comfortable with the process, you will want the expert that knows the in and outs of builder contracts to help you along the way.
Buyer’s Agents can also tell you the best time to consider making an investment in a new construction home.
Some other items you may not think of during this exciting time is making sure you understand the warranties that come with the home and your part in the home inspection process. Your Buyer’s Agent can assist you in making sure you understand what is and is not covered for your home after closing. Builders have different time frames for coverage and different ideas on what should be covered. If coverage is important to you, you may want to shop around for a builder that has the same ideals. As for the home inspection, the Builder’s Representative is likely not going to recommend you get one. It is helpful to have a Buyer’s Agent by your side to make sure your home is safe to live in and prevent problems down the road.
2. Weigh your options when adding on home amenities and upgrades. Your Buyer's Agent can guide you through where you will get the largest return on your investment and the items you can add on later.
The model home, while beautiful, can offer an unrealistic expectation of what your final home will look like. This home is almost always built with the builder’s upgrades. Upgrades are generally priced above retail value. Ultimately, they are selling you on the convenience of the upgrade being installed by the time you move in.
If upgrades are important to you, it may benefit you to purchase a model home or shop around for a builder that includes high-end items standard. Some builders may include the items that you are longing to have in your home as standard features while others consider these items an upgrade. Model homes are also a great option – they are still technically new, often sell for a fair price, and include all of the desired upgrades.
You can lose the opportunity to have your own representation should you choose to visit new construction home sites alone. Many builders require you to register your Buyer’s Agent upon entering the office, otherwise, you could unwillingly be represented by the Builder’s Representative that only has the Builder’s best interest in mind.
You may not be aware of a Builder’s reputation when pulling up to the model home. It can be helpful to have a Buyer’s Agent on your side that’s been there before. Word travels fast in the real estate industry and if a Builder isn’t treating his clients well – we know about it. Builder’s Representatives are quick to show beautiful marketing plans for their new homes. Buyer’s Agents know better and are able to ask to see the site-specific specifications to make sure you don’t end up with some surprise unpleasant features on your lot.
A Buyer’s Agent can guide you on what upgrades are worth the up-front investment and the upgrades that you can do yourself after closing. This can often save you a great deal of money and allow you to add on other features that you may otherwise miss out on such as additional square footage, more attractive elevation, or a covered porch!
Did you know you may be able to get the best deal by looking at homes that have been pre-built by the Builder for a quick sale? Homes that have been pre-built and have been on the market for 45 days are more have the most negotiating power. The Builder can’t have these homes sitting unsold so they often come with some desirable upgrades, and they are move-in ready!
5. Buyers should not be an open book to the Builder's Representative. Remember, the Builder's Representative works directly for the builder and has their best interests in mind, not yours.
If the Builder or Builder’s Representative promises any incentives or upgrades be sure to get all of this information in writing so you are protected at closing. The Builder may also refer you to their lender. This can be a good option depending on the incentives the builder offers for using their lender. You still want to shop around before selecting a lender to make sure you are getting the best loan for you.
The Builder’s Representative can be a good source of community and area of information, but don’t think they are your best point of contact throughout the process. They ultimately work for the builder.
We hope this information has given you a new perspective on protecting yourself during the new construction process. We have a team of Buyer’s Specialists ready to help you with the new construction process. If we can assist you in any way, please give our office a call or use our contact form. Remember, the Buyer’s Agent service is FREE to you and a great resource for new construction questions!
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