It is important to have a REALTOR® represent you in the purchase of a new construction home—especially if you want to avoid making potentially critical mistakes!
Sure, you can go to any new home subdivision, pick out your favorite floor plan and finance the home through the builder’s preferred lender. Then, you sign the builder’s contract, pick out your options, and you are on your way to living in your brand new home. You can do all this by representing yourself.
But should you use a REALTOR®? Absolutely!
First of all, it does not cost you anything to have a representative on your side. Most builders allow for the cost of a buyer’s agent in their overall marketing costs, and, as such, don’t discount the home’s price when the buyer doesn’t use an agent. Some builders simply pay their own sales representative (rep) more of a bonus if the buyer doesn’t use an agent. So, it’s to the rep’s benefit to have you be unrepresented.
The sales rep sitting in the builder’s model is an employee of the builder. He doesn’t have to be a REALTOR®, only a licensed real estate agent. He will act in the best interest of the builder (his employer), not the buyer.
Using a REALTOR® will put a professional on your side
Your buyer’s agent will know whether you might be overpaying for the home based on the selling price of similar homes. The agent often knows what the growth plans are for an area, and may be able to alert you to plans for nearby commercial/retail development being planned.
The agent can advise you on which options are most important for resale value. Should you spend your money on a full basement or that pretty granite countertop?
Your agent can advise you on whether the builder financing is really a good deal or whether you should seek an alternate financing source. Builder financing margins are built into the purchase price. So, the price you pay for the home is more than the home is worth.
Your agent can monitor contract due dates so you don’t have to. Builders tend to be lax on meeting these dates, and it is helpful to have an agent who will be staying on top of this for you.
Your agent should encourage you to have a home inspection prior to closing. Just because the home is new doesn’t mean it won’t have problems. Often new-builds have more issues than a resale home. Your agent will help you through these negotiations.
Since your agent may ultimately be helping you sell your home when that time comes, he will be viewing your choices from that perspective, which is to your long-term benefit.
Don’t forget the fact your REALTOR® needs to accompany you on your first visit to the new home community, so don’t go house hunting alone!
Brand new homes are pretty, and you can select the carpet, flooring and paint, etc. to suit you. But if you are like most buyers, you’ll be viewing the choices and the process through rose-colored glasses, and you are likely to overlook important issues. Your REALTOR® will be an objective third party to keep you grounded, yet be there to share in the excitement of owning a brand new home!
John Karadsheh is a licensed REALTOR® with Coldwell Banker Trails And Paths Premier Properties. He also is an Associate Broker, Accredited Buyers Representative and a Certified Residential Specialist. You can contact John with any of your real estate questions. Call him at (602) 615-0843, or go to his Web site at www.BuyAndSellAZ.com.