1. The builder is perfect and never makes a mistake. Wrong. Homes are built by humans and humans make mistakes. You always want to have an inspection by a third party inspector. Be there for the inspection and ask questions, it will be your home. Catch the mistakes and problems before closing. It is much easier to take care of a problem when the builder is still motivated to get the transaction closed and that is the time to resolve any problems. As a professional REALTOR®, we work with qualified inspectors that are licensed by the Texas Real Estate Commission (TREC).
2. The builder’s warranty is important. What type of structural / foundation warranty does the new home come with? Is it warranted by the builder alone or is a third party involved, such as the oneTexas now requires of all legitimate builders? Companies that warrant the structure of a home, require standards from the builder and ongoing inspections. The requirements generally include a minimum amount of experience building homes and specific structural standards to be followed. A good structural warranty of some type will keep away possible headaches in the future. The one most important factor is, always get the warranty in writing.
3. Don’t be fooled by the beautiful model (of the home, not the sales person). What you see is not what you always get. Ask the on-site sales person to point out what is an extra or upgrade in that model. If you assume you make a mistake that could be very costly. Be prepared to ask in every room of the house, “What is an upgrade in this room?” Be positive, but take notes of the sales person’s responses. The on-site person may think you are being picky, but it is better to know you are getting what you expect. The old saying goes, “you can only expect what you inspect”.
4. You can negotiate. Don’t be afraid to ask. Most builders will expect for you to pay for an owner’s title policy. Ask the builder to pay it! Although it is true that builder’s preferred not to negotiate on price, they will negotiate on extras. Ask for special financing concessions. Think through the items which are most important to you and add a few more. Then be willing to be reasonable by throwing out the things you don’t really want. As a professional negotiator we pride ourselves on our ability to negotiate on your behalf. Your REALTOR® is your best asset.
5. You do have a right to choose your own lender and Title Company. Many builders prefer to have you obtain financing through their Mortgage Company and title company. They have what is called a “Controlled Business Arrangement” Don’t blindly accept this. They would prefer to have their mortgage company and Title Company so that they can control the transaction.
6. The builder’s contract is for the builder’s benefit. When you are purchasing a new home the contract being used has probably been prepared by the builder’s attorneys. If you are not a specialist on contracts, be cautious of what you sign.
7. The on-site sales person, represents the seller. That sales person is an employee of the builder. Most on-site sales people are not licensed real estate agents. Many buyers feel they will get a lower price by not using a real estate agent. That’s simply not true. The commission of an agent is figured into the overall sales of the builder, not on a per transaction basis. Builders develop their pricing models based upon including the marketing fees to be successful. When a builder figures his cost, it includes the fact that many buyers will employ a REALTOR, and he figures that percentage over all the homes he builds. Professional REALTORS are paid from the sale of the property; they provide their service at no charge to the buyer. Since the builder has someone representing him, shouldn’t you? Your REALTOR® is working and protecting your best interest.
8. Check out the builder’s reputation. How long have they been in business? Do they take care of the client after the sale? Talk to the neighbors and scrutinize the construction quality of surrounding homes. Is this a normal home for the builder or is he over his head in the price range of home.
9. In your quest to save a few dollars, are you being penny wise and pound foolish? Many times you may want to take the builders standard and then do upgrades yourself after closing, such as ceiling fans or landscape upgrades. The builder is going to mark those items up. Certain upgrades do make sense, but not all. If you are building a home from the ground up, yes have the extra electrical outlets installed for the Christmas lights, but not the Gazebo in the back yard.
10. On the pricing of the home, your agent will be able to provide pricing of comparable homes both in the neighborhood and surrounding areas. Don’t take the work of the on site sales person that this is the best deal available. Your agent works for you, let them do their job and protect your interest. All agents are not equal. Make sure you have someone with new construction experience, not one that just got their license last week. Check out our recent Blog about how to choose a professional REALTOR®.
As you look at homes and communities, also think about the company behind them. Before choosing which one to buy from, take a close look at each builder you are considering and ask these questions:
- Who are they?
- Do they build a quality home?
- What are they like to buy from?
- What is their after-sales service like?
- What’s their reputation, what do others say about them?
We will be more than happy to assist you with this questions. Go ahead, do a quick search and give us a call. We will guide you every step of the way.
Happy New Home Searching,
Bruce Rayburn, The Rayburn Group
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