Buyer Beware of a Home Builder??
Hey there, friends, it’s Good News Bob with some helpful tips when you’re looking to purchase a new construction home from a home builder. Buying a brand-new home is like purchasing a new car—everything is sparkling fresh and clean and bright! And like a new car, there is a “new house smell”. Fresh paint, crisp colors, spotless appliances, ahhh, I can see and feel it now! What a fantastic experience!
I’m surprised most people don’t realize they should or even can have a professional real estate agent representing them when purchasing a new construction home. In a future article, I’ll explain the process of agency in Texas. But for now, assume you’ve hired an agent.
So, why do I warn you to beware of a home builder? They have the nicest salespeople, right? So friendly and nice and really want to help you purchase one of their lovely new homes. Offer you something to drink, invite you to the neighborhood barbecue, and just want to be your new best friend!
Why you need a Realtor
All that is really great, until the term “Realtor” pops up, and then you might hear, “Hey, I’ll take care of you. And I can save you some money if you don’t use a Realtor”. It’s like Realtors are going to cost you, the buyer. Actually, quite the opposite is true. Why, you ask? Here’s why.
The salesperson at the builder’s office represents the builder, not you.
That sweet, helpful salesperson is obligated to perform in the best interest of their employer, namely, the builder you’re negotiating with. Make no mistake, all these great “incentives” and “special concessions” for you to have them build you a home just may not be the best deal you can get.
A buyer’s agent can guide you on appropriate upgrades and plan modifications.
Your agent understands the elements of a home that improve livability and resale value. That special room you want to have built out for your goldfish tanks may even reduce your home’s value when you’re ready to sell it.
Your agent will negotiate on your behalf.
How many homes have you negotiated on in your lifetime? One? Five? Or zero? An experienced agent has negotiated on dozens of transactions and knows how to get the very best deal for his clients based on current market conditions. This can either save you thousands of dollars on the new build or get you some premium upgrades at no additional cost. *Realtor tip: The best time to negotiate with a home builder tends to be at the end of the month, the quarter, or the year, since they often need to hit their quota target regardless of how much profit they make (or even lose) on your home. This is especially true with speculative (“spec”) homes—homes that are completed or almost completed without a committed buyer.
Your agent will make sure all the paperwork, including the contract, is in order.
How many real estate purchase contracts do you review each year? Hmmm? That’s what I thought! Home builders frequently use their own contracts and addenda which can run 80 pages or more. Last year I had a client couple purchase a new construction home and the contract showed a sales price of over $3,000 more than the price we had agreed upon. My clients never saw it, but in my review I caught it and had it corrected. To me, $3,000 is a lot of money to lose simply because a mistake wasn’t noticed buried in the midst of an 81-page document.
Your agent is a professional that will represent you through the entire buying process.
You’re about to commit to probably the largest single purchase in your life. Doesn’t it make sense to have a qualified real estate agent who works for you to protect and assist you at no cost to you? Makes perfect sense to me!
So let’s get you pre-qualified or pre-approved for a home loan and then let’s go shopping for your next home. Call me, Good News Bob, today!