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2019-05-08 13:52:44
3 Things to Know about Buying New Construction

Buying New Construction Homes

Imagine your first weekend in a new home; a home without nasty smells leftover from the previous occupants, no smudged baseboards and a sparkling clean refrigerator that has never held leftovers. The only thing you need to do this weekend is relax and enjoy your new home.

Sure, there are other reasons to purchase a newly constructed home rather than an existing one but let’s take a walk through the purchase process so you know what to expect from the minute you step into the new home community’s office.

The Real Estate Broker

New home communities are typically laid out so that visitors are herded into the builder’s model/office before they reach the actual model homes. The person that greets you here is usually the builder’s real estate broker. Read that again: the builder’s real estate broker. Although she may be a perfectly fine person, full of wit and charm, she is not your real estate broker, nor should you entertain fantasies of how easy the process would be if she were.

The best way to avoid the temptation and any pressure the broker may try to place on you is to mention that you’re already working with a real estate broker. Ethically, the builder’s broker must back off trying to recruit you as a client. Also, most new home communities have a registration card for guests. Make sure you also register your real estate broker's name on that form as well.

The builder pays the real estate commissions so there is no reason not to have your own representation during the purchase process and many reasons to have it. Real estate broker have what are known as “fiduciary” duties to their clients. The duties for the buyer’s broker are different from those of the seller and believe us, they do conflict.

Think of it as being represented in divorce proceedings by the same attorney that is representing your spouse. Not a good idea.

The Lender

The builder may also have a preferred lender and you will no doubt be urged to use it to finance the purchase. Unlike the real estate broker, there is nothing inherently wrong with using the builder’s lender, as long as you’re being offered a good deal. Sometimes they offer incentives such as an appliance package or Seller paid closing costs.

Never feel that you have to use the builder’s in-house lender; you are within your rights to use any lender you prefer. Always compare rates and closing costs to make sure you are getting a fair deal.

The Builder

As in most professions, there are good builders and there are those that take short cuts along the way.

If you aren’t familiar with the builder, do some checking on his or her background. Start with the Better Business Bureau and Construction Contractors Board in your area and then check public records for lawsuits against the builder.

There is a lot more to buying a newly-constructed home than an existing home. Carefully choosing your real estate broker and then investigating the builder will go a long way to helping the transaction run smoothly.

 
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2019-05-08 13:52:44
3 Things to Know about Buying New Construction

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