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I have often been asked how I can add value in a new construction Purchase. I decided to make it a blog post here goes. Trying to sort thru my thoughts into bullet points.
Representation
The sales rep you see when you visit a new construction community is the Builder’s sales representative. Someone who has the ethical and fiduciary responsibility to represent, and protect the best interests of the builder. Which means, essentially you, the buyer, are unrepresented unless you have a Buyers agent.
Price
It has been argued that if there is no Realtor, the builder is likely to negotiate the purchase price better. That is simply not true. The Realtor fees are a separate budget item and considered regular cost of doing business. The Builder is never passing on the savings to the unrepresented buyer. In some instances their own Sales rep makes a higher commission on the sale.
Market assessment
Buyers who are thinking of buying in a particular location, would like to evaluate the resale options in that area as well. In fact, those showings which you do with a Realtor, educate you on the market, local neighborhoods, pricing etc. and help you decide on the “right” house for your family. If that happens to be new construction, its only fair that the Realtor should get paid for putting in all that effort, sometimes over a long period of time, helping you arrive at that conclusion. In some instances, there are 2-5 yr old resales in the same neighborhood, which may be better values…
Negotiations
Realtors can pull information on the other recent sales in the neighborhood. They know when builders typically announce incentives. They know how builders negotiate, on which lots, upgrades, lot premiums, quick deliveries etc. etc. Often those savings far exceed what a buyer can negotiate for themselves directly. I have an email from a client who said this Thanks Bela for all the help in getting this home and for all the conversations you did with the builder. I probably wouldn’t have bargained to the price we finally got it for. Thanks, Anil Sirimisetti.
Timeframe
For a To-Be-Built home, your timeframe can be as high as 6-8 months. A lot of things can happen to the house and neighborhood over that time. There could be construction issues, mortgage issues, (check out a related success story here) builders go out of business, upgrades you have chosen may be discontinued, environmental, health issues and so on. The Builder is not going out of their way to keep you informed, your Realtor will.
Building Process decisions
I have many instances of helping my new construction buyers pick the right lot, making the right upgrade selections, reviewing paperwork with them, pointing to terms of the contract when needed. A good Realtor know which upgrades will add resale value and which won’t, Here is a success story example. In fact, have seen many instances, when just knowing that the buyer is represented by a good local Realtor puts the construction team on notice.
Advice
Apart from the decisions, there are many other aspects for the new construction process when advice is needed. Are new construction appraisals a 2 step process? what does a retention basin mean? What is Grading? What is a walk up basement and how will the yard slope look like as a result?What does basement waterproofing include? Can basement bath rough-ins be done later? Is the Settlement date flexible? Are inspections necessary? Does proximity to electric poles, cell phone towers affect home values? Should I use the builder’s title co? What is Mechanics Lien? Does my title policy cover it? Your Realtor can be a resource for all these answers and more.
A huge disclaimer
All the arguments made above are based on what I do for my buyers. I accompany buyers to walk thrus, I make time to run to the design center for selections if needed, I point out issues at inspections (in some cases things that the home inspector missed) I review all paperwork, I follow up with the builders lender if needed, I discuss numbers on settlement sheet, I follow up with the builder team as needed…..
I acknowledge that there are Realtors who simply drop off their buyers at the new construction site, and are seen next only at settlement to collect their check. Well, not all Realtors are the same, you have to distinguish between the two. You will always be better off interviewing a couple of Realtors before selecting one, even if they come highly recommended by friends and family. Ask them how often they do new construction sales – or discuss any of the points mentioned above. And then decide who will help you with your purchase.
Here’s my Promise – I cannot tell you exactly how I will make a difference to your real estate transaction, because each transaction is unique, with different set of players and circumstances. But I will confidently tell you, I am customer service oriented and fiercely loyal to my client’s interests, so there will be a noticeable difference. Watch my other Success stories here.
For more tips or a personal consultation, call Bela cell: 484 947 3127.
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Bela Vora, R3ALTOR
Coldwell Banker Realty
484.947.3127
bela@belavora.com
