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With such high demand for homes and limited inventory, there is also a strong demand for new construction. New communities are popping up all over the Central Texas area. To-be-built homes or inventory homes ready for immediate move-in.
Cedar Park, Manor, Liberty Hill, Leander, Lakeway, Liberty Hill, Pflugerville, Manor and Georgetown are only a few places with new homes to consider.
If you are considering buying a spec home or new construction, it is always best to have a Realtor® working for you.
Why? Builder representatives are there to sell THEIR homes. As your Realtor®, I'm looking to help you find the BEST home for YOU.
My goal is to ensure you are able to consider all of the pros and cons of different areas, communities and builders.
Can you accurately plan for upgrade and option costs? Are you prepared for the tax rates, HOA fees and regulations, schools, and area development plans? Will your new build be well-positioned for resale down the road? Are you taking advantage of the best incentives and shopping rates? Our commission is paid by the builders so there is no downside to you for using a Realtor to help you make the best decision.
But, keep in mind that most builders will require that that I accompany you or register you prior to your first visit to the builder’s model home or community. Therefore, it's important to let me know in advance of community or builder visits to protect your opportunity for your own representation. Or I can pre-register you with the builder.
Let me assist in finding you the perfect community and builder.
I have helped many buyers during this process. I also recently experienced my own new build and can help walk you through the in's and out's from beginning to end.
Here are some tips and items to keep in mind if you may be interested in purchasing new construction.
Some factors that influence builder pricing
Most builder prices are influenced by the following:
Why you need me.
As your real estate agent who specializes in areas of new construction, buyers ask me all the time if they can use a real estate agent when they are purchasing new construction. The answer is yes.
In general, builders’ model homes are staffed by agents who work directly for and represent the builder. You need to have your own agent who represents you only and looks after your best interests.
You may ask, Why hire a real estate agent when buying a new build?
When shopping for a new build, it’s extremely helpful to hire your own real estate agent.
Understandably, this might not be obvious. New construction seems straightforward: The house is being built, and you can buy it. What is there for an agent or Realtor to do? Or maybe I’ll use the real estate agent of the home builder — can’t they help me out?
As it turns out, there is a lot that I can do for you when you build a new home.
As your real estate agent is there to advocate in your best interest. While a builder's agent would be more than happy to help you do the paperwork on a home purchase, they ultimately work for the builder. Their fiduciary responsibilities to the builder and the builder is the one signing their paychecks. With that in mind, they're going to have the builder's best interest in mind.
When you hire me to help you through the transaction, you know that you will also have someone advocating for you during the transaction. You'll have someone there to make sure that you get what you need out of the deal.
A buyer's agent — the real estate agent representing your interests as the buyer — can also help you with contract negotiations. When you use the builder's standard contract, the vast majority of the clauses included are going to be worded to the builder's benefit.
A great real estate agent can help you negotiate on your behalf and make sure that your money is also protected by the contract. Plus, if there are any issues during the transaction, I can negotiate on your behalf when problems crop up.
Not all builders are the same. Every builder has their style, both in terms of construction aesthetics and communication during the new construction process. To make sure you’re satisfied, you’ll need to find a builder whose style and work preferences match your own.
It can be hard to know where to start when trying to find a builder. Since I have the experience in the industry, I can help you through the selection process. Having helped many buyers over the years, I can suggest available builders, and help you come up with good questions to ask when you interview potential candidates.
I will remind you about resale value.
When you're building a new home, it can be all too easy to get caught up in creating your perfect dream home. When viewed separately, each upgrade may not seem to cost very much. Yet when added together, it’s easy to over-improve your property.
With that in mind, I can help keep you on track by reminding you of your new home's potential resale value as well as appraisal values if you are using a lender. Since I know the areas and the appreciation that has taken place over the last few years, I can give you a good idea of whether or not you are on track to get your money out of your investment. And remember, this is an investment, not just a place to live.
As the buyer, you should not have to pay anything to use a real estate agent. In a real estate transaction, the seller is responsible for paying the agent commission, which usually amounts to 6% of the purchase price. In a new construction scenario, the builder is the one who will foot the bill. Most builders view paying a buyer's agent fee as a cost of doing business.
*** Keep in mind that most builders will require that that I accompany you or register you prior to your first visit to the builder’s model home or community. Make sure you don’t just “stop by” the new-home community without me or remind me to reach out and pre-register you. This way you can be sure not to lose the opportunity to have your own representation.
The best time to buy.
A lot of the national builders are publicly traded companies. They need to meet sales goals and answer to the shareholders of that company. For that reason, toward the end of a quarter, builders tend to be more aggressive with their incentives in order to meet these sales goals.
The December holiday season is another great time to buy. Most of the country is out shopping and traveling to see family. Very few people shop for homes this time of the year. For that reason, this might be the season to find some great incentives to purchase a new home.
Builder list prices.
Surprise — builders don’t like to reduce their prices. If they do, it sets a precedence for future home sales. Builders are more likely to pay for closing costs or offer design center incentives than to drop their prices.
Builders are not like regular sellers. They are not emotionally attached to the property. They make decisions based on what is best for their bottom line. There is something known as the time value of money, which means that money available at the now is worth more than the same amount of money later.
Side note: Some new-home buyers think that if they do not use an agent for their purchase, the builder will reduce the price of the home by the amount of the commission. For the most part, this cannot be further from the reality. Builders do not want to reduce their prices because it sets the comparison price for future home sales in that neighborhood. Builders instead add the commissions paid to a buyer’s agent into the marketing budgets of the homes. If a buyer goes to a new-home builder without a real estate agent, either the builder’s agent or the builder will pocket that money.
Get everything in writing.
Getting everything in writing seems obvious, but the builder’s agent says during a showing of a new-construction home. If something said is important to the buyer, get it in writing.
The majority of larger builders will have lengthy, attorney-written, intimidating-looking purchase agreements that cover all the pertinent details of the new-home purchase. Ensure you read through and are familiar with the purchase agreement along with your agent.
Is that a typo? No, it is an acronym for “what you see is what you get.” Or, in this case, what you see is not what you might get. A builder model home might not be a good representation of what comes standard with the home.
Often the model home is a high-end version of the standard home. It is the builder’s showcase home and a way for the builder to show off many of the stellar upgrades it can offer. The builder hopes a buyer will like these upgrades and ultimately add them to the purchase of the home. In general, these upgrades have good profit margins for the builder.
When touring the model home, find out exactly what options are standard, what options are available, and, of course, what any additional options will cost.
Each builder will have their own set of standard items that come with a house. A standard item for one builder might be an upgrade for another.
Purchase the builder’s model home.
Purchasing the builder’s model home can be an excellent deal. Remember, these homes are the showcase homes for the builder. The builders have packed great upgrades and features into the model. Typically when the community is almost complete, the builder will put the model home up for sale. Be on the lookout for them.
Technically, these model homes are new homes because no one has ever lived in them. These homes have served as an office and have had hundreds of prospective buyers walk through and view them.
The one downside of buying the model home is that the buyer generally does not get to pick the floor coverings, the color of the paint on the walls, the kitchen cabinets, appliances or any fixtures. In many ways, it is like buying a professionally designed resale home.
These gently used model homes are typically a pretty good deal. These homes tend to sell for market value and have the showcased upgrades.
Research the builder.
Not all builders are created equal. Do your homework, and get to know the builders, their reputation and what they offer. To get an understanding of the builder and what they offer, visit other communities the builder has built in, try to speak with past buyers and look for online reviews. I can also help with reviews on my past buyers who have completed new build homes and share the experience they have had during the process.
Know the builder’s lender.
Builder’s love it when a buyer uses their preferred lender. In most cases, they will even offer some enticing incentives to ensure a buyer chooses the preferred lender. Even so, a buyer should not just automatically use this lender. They should shop around and find the best loan for them, not for the builder.
Using the preferred lender reassures the builder that the buyer is a good credit risk, but depending on the incentives the builder is offering, using the builder’s lender might not always be an excellent option for a buyer, but it is important to compare the rates and incentives between the builders lender and your outside lender before deciding.
some Article excerpts shared from Inman News - courtesy of Jeff Gould