The features of the model home are top of the line and it looks and feels fresh and trendy. It is designed to entice you and get you to buy. Before you know it, you have sat down with the nice salesperson and started talking about price…BUT HOLD ON! This is one of the most important purchases of your life. Even if it’s not your first home, there are still a few things that you should consider BEFORE walking into that model home the FIRST time.

Buying a new home, can seem like an easy task, right?

1. You walk into the builder’s office.

2. Choose a model.

3. Sign the contract.

4. Choose your options.

5. Sign another contract.

6. Work with the lender

7. Walk through your home before closing.

8. Close.

As you can see, it takes some serious maneuvering through this process and you need an advocate on your team. A professional realtor to represent you. Not the builder’s salesperson.

My husband & I have built a new home and have helped other buyers through their new construction process. I am convinced now more than ever that buyers need an advocate in their corner, that does not work for the builder.

Who Pays the Realtor? A Realtor gets paid by the builder. It is in their marketing fee. Whether you hire an agent or not, the fee is there and will not be removed. The agent must be with you during your initial visit. Or, if you do go visit a builder’s model home, don’t register or give your name and information. They are not going to ask you to leave if you don’t tell them your name. I have had many clients not give their name upon their initial visit. Or they tell the builder, I have a Realtor, and I will not provide information until she is here with me.

Realtors sell over 70% of all new construction homes, according to the National Association of Realtors. But, what does that mean to you, the buyer? It means that an agent has clout with the builder, especially if the agent is associated with a large, national firm. Statistics show we will be back if that builder does a good job for you.

TALK TO A MORTGAGE LENDER EARLY

Many large, tract builders have a relationship with a lender or may even own a mortgage company. Some builders will offer you an incentive (contribute to closing costs) to use their preferred lender. However, the interest rate you are quoted and the fees may not be that competitive.

The interest rate being offered by the builder’s preferred lender may cost you more money in the long run versus the compensation that the builder was willing to give you in closing costs. Shopping around for a lender can create a competitive environment and make the builder’s lender offer you a better rate. I recently helped a buyer with their mortgage options and was able to get my buyer a better rate, as well as more closing costs assistance because we negotiated.

If you are a strong buyer with a good credit score, you have options and more bargaining power than you think. A real estate agent has relationships with mortgage lenders that perform. Most mortgage lenders business is through referrals. A bad lender, that over promises and under delivers doesn’t bode well with a real estate agent. So, ask your agent for other mortgage lenders and shop around. However, be aware of internet-based companies that may be working out of state. Although they are held accountable by federal guidelines, there is no relationship accountability.

KNOW THE CONTRACT THE BUILDER IS GOING TO USE Too many buyers get blindsided by the 30-100 page contract the builder is going to present to you. The builder’s purchase agreements are written by the builder, for the builder. It is a one-sided contract, meaning it leans towards their best interest. Knowing what you are up against before it is too late may save you from losing your deposit if things do not work out.

Remember, that salesperson works for the new construction builder, not you.

Please, even if you do not hire an agent to help you through the building process, don’t just believe everything you are told. Hire an attorney to review the builder’s contract if you are not seeking advice from your Realtor.

FREQUENTLY ASKED QUESTIONS

CAN YOU USE YOUR OWN REALTOR TO PURCHASE A NEW BUILD?

Yes, you can! Choose a real estate agent that is experienced in selling new construction in the area that you are interested in. They will be able to research home prices in that area so you do not overspend.

WHO PAYS THE REALTOR’S COMMISSION IF YOU BUY A NEW BUILD?

Almost all production builders have a marketing budget that includes paying Realtors a commission.
More than likely, the builder will not reduce the price of the home should you not hire a Realtor.

WHAT DOES THE REALOR DO DURING THE BUILDING PROCESS?

This is important and you need to interview the real estate agent. A good Realtor should be there with you during the entire process. I am there during your lot selection (super important), I can advise you on the mortgage process and if you know what all your options are. I also attend the home inspections which is really important.

WHAT IS THE ROLE OF A REALTOR IN NEW CONSTRUCTION?

The Realtor that you hire works for you. They should be looking out for your best interest.

That means when the builder pushes back, cuts corners, etc., your agent should be using their clout to have them perform.

The salesperson that you meet in the builder’s sales center or showroom works for the builder. If you decide to not have a real estate agent help you, then you have zero representation on your side.

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WHAT’S AVAILABLE?

There are many new communities being built in the PHOENIX VALLEY surrounding areas. I would love to help you get started! Please reach out to me if you are interested in touring a new construction development.

Happy House Hunting!

Melanie