Some buyers prefer resale homes and others are drawn to new construction. Today, we’re helping investors and homebuyers understand the unique challenges and opportunities that come with new construction. As you may have noticed, it’s a little different when you’re buying a lot in a development where a house will eventually go. These are the things you need to know as a potential buyer.
Is A Realtor Needed for New Construction Purchases?
Many buyers often ask us if a Realtor is really necessary when you’re buying a new construction home.
The answer to this is yes.
When you step into a builder’s model home, there is usually a staff of real estate agents who represent the builder. You have to remember that their priority is selling homes at the best terms for the builder, not for the buyer. So, you need a real estate agent to represent you and your best interests. If you stop by a new home community without your agent, you may lose the opportunity to have your own representation at the time you close on the purchase. So, always disclose that you’re working with a real estate agent when you visit these communities. Better yet – take your agent with you.
Will the Builder Negotiate on Price and Terms?
The builders are not like regular sellers. They are not attached to the home. They’re looking at the growth of their company and they don’t really want to hold onto those properties. Reducing the sales price of a home sets a precedent for future homes in that neighborhood, however, so negotiating is more difficult when it comes to sales price. But, you can negotiate for other things. Builders will often offer design incentives or consider paying some or all of the closing costs. Each day that a home is on the market, that builder is losing money. Try looking at new homes that have been on the market for a while and you may find a good deal.
Am I Seeing Standard Finishes?
Probably not. The model home is always going to be the high-end version of the standard home. It has all the bells and whistles. When you are touring the home, make sure you find out which options come standard, what is optional, and how much those upgrades will cost.
Do I Have to Use the Builder’s Lender?
A lot of times there are great incentives for using the builder’s lender. There is a financial risk involved with the builder, so they look for assurances that the buyer is a good credit risk. You can absolutely shop around to find the best lender for you, and you do not automatically have to select the builders’ lender.
New Home Inspections
Most new homes come with a one-year warranty, but you absolutely should get a new home inspection. There are a lot of different companies that provide trade services for the builders such as masons, plumbers, electricians, etc. The items that the inspections uncover can be included in your punch list of things to be completed before closing.
These items are just the tip of the iceberg when purchasing a new home. Please feel free to contact us at PMP Carolinas to get more answers about how to effectively buy a new construction home.