Buying New Construction?
HELPFUL TIPS ON BUYING NEW CONSTRUCTION!
A lot of people ask what’s different about buying new construction.
First of all, you’re buying from the person who built it, not the person who called it home. The property is often one of many the builder is trying to sell. This can lead to a different dynamic both in negotiating and throughout the transaction.
What can you expect? Here are some of the most important things to consider when buying new construction.
1. Find a great agent!
Be sure it’s someone who has experience in new construction and isn’t affiliated with the builder. Model homes are typically staffed by a real estate agent who has a relationship with the builder. It’s important for you to have an agent to represent your best interests, from advising you on how to structure your offer to be most appealing to the builder to making choices that can affect your home’s resale value. Some developments have site registration policies that require your agent to accompany you on one of your first few visits.
Pro Tip: Ask your agent to check the site’s registration policy before you go. Your agent may be able to register you online or via phone so you can visit the model at your convenience. Or you may arrange a time to look at the community with your agent.
2. Be creative during negotiations.
Builders don’t like to drop their prices. Instead, consider asking for the builder to pay closing costs or perform upgrades at no additional charge. Builders are often reluctant to set a precedent for negotiating prices since future buyers in the development may expect similar discounts. Consequently, builders are often more likely to negotiate “on the back end” since closing costs and upgrades are a less obvious way for them to sweeten a deal.
Pro Tip: If you’re considering an offer, ask your agent to research the builder’s negotiating style on prior sales in the community and other developments they have built to determine if there is a particularly effective way to approach the offer.
3. Get everything in writing.
Don’t sign anything until everything has been negotiated, agreed upon and written into the contract. If you’re considering purchasing a home that is not yet complete, it’s very important to spell out how the home will be finished, what will happen if construction is not completed on time and the deadlines for decisions that will occur through the process. Verbal conversations are not binding, so everything important must be put in writing and signed by all parties.
Pro Tip: Builders often use customized purchase agreement documents in place of standard forms commonly used in your area. Ask your agent to get a copy of the builder’s documents to review in advance.
4. What you see isn’t always what you get.
The fit and finish of the model home doesn’t necessarily represent what comes standard.Often the model home reflects a mix of standard materials and fixtures, as well as a handful of upgrades. When touring the model home, make sure to find out which is which. The important thing is to know exactly what you’ll be getting, what’s available and, of course, what it will cost. Keep in mind that costs can change. The price quoted at the start may not be the same when you decide to move forward.
Pro Tip: Ask your agent to help you get a list of standard features and, if available, a list of common upgrades and their associated costs.
5. Do your research on the builder.
Search online for reviews, testimonials and news. Keep in mind that many builders will have both happy and unhappy customers in their past. Look for trends in reviews and make sure any concerns are covered in the purchase agreement documents.
Pro Tip: Ask your agent if they’ve worked with the builder in the past or are aware of their reputation.
Double Pro Tip: Ask me, a Certified New Home Ambassador, how I can help you through this process.
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