Buying new construction? Buying a new home for sale? Actually, there is a slight difference. Hello my name is Damon Duvall with Wendy Morris Realty. This will be a short series on how to potentially save yourself thousands of dollars, unwanted hassle and end up with a better home and overall experience.
First, I am a professional buyer’s agent. I do not seek out homes to sell I only help people purchase. Someone like me that is experienced and actually on your side is who you want to assist you. In many cases people visit new communities alone, or with assistance that is either lacks knowledge, experience etc. If so, you are cheating yourself. If your uncle had purchased 50 new construction homes and was willing to go with you wouldn’t you take him? Take me with you the very first time you visit the community or at least definitely before you even consider buying.
When you visit a new community and end up in the sales office alone you will be dealing with a sales agent who represents the builder and not you. They are very friendly and yes, they are paid to be. On their wall you may see sales awards for those who sell the most. Do you believe the ones who sell the most make the most? You bet they do.
Another important fact is the sales agent (90% of the time) can not sell your home. They can not rent your home out for you. If you are buying in a resort or something similar the odds may be a little higher that they can. But in a typical community they cannot. That matters because I on the other hand want your business in the future so I want you to be pleased with my service. I also want you to see competing communities and they do not. They want you to believe them and to buy with what they tell you is a good price.
Ideally you would look for the following. A community just starting that was built by a builder that is likely to finish the community. Avoid Joe Blow Construction if there are over 50 or a hundred homes. Larger companies are a lot less likely to not be complete the project. Yes, there are instances where this has happened.
If the community is located in a suitable place get in it early. Normally after a certain percentage of planned home sites sell the prices go up. About to open a new phase is a warning signal. A good question for Company Sales Rep. who says they are about to open a new phase is how many more homes need to be sold? Maybe you can turn that around to your advantage.
As early on in the process as possible read/review the HOA policies and rules. Just a few important items can be no short-term rental, subletting (renting out rooms), parking rules, allowable vehicle rules etc. Some HOA’s even put a limit on the percentage of homes in a community which can be rented. I know of one that the waiting list is around 2 years.
There are different ways to purchase new homes. You can buy them before they are built, during the build or purchase one which failed to close. The latter is the rarest opportunity but sometimes a good deal. Most people seem to prefer building from scratch although this typically takes around 6-8 months. Be prepared to be flexible with the closing date especially if it is near the companies fiscal end of year.
There are any number of ways to finance a home today. But most likely it will be most beneficial to use the financing that is available at the builders. Why? Because you can normally get the builder to pay toward your closing costs if you use that lender. You will not find a lender who will match the closing numbers you end up with using the builder’s lender. For example, on a $350,000 loan you may well get $10,000 of your closing costs paid. There are legal limits to seller concessions on most loans. A good Realtor should know them or find them out easily. For heaven’s sake ask the question. The outside lender just can not afford to match the concession. If it were me and I was planning on buying new I would make sure of my credit and then just go the above route. Don’t let a lender do a “Hard Pull” on your credit unnecessarily. It effects your score.
This is something we/I have done many times. I love doing it. Just a couple of quick pointers on doing this. You will not get a better price without using a Realtor like me. They may say you will but you are being lied to. Ask yourself why they do not want someone experienced assisting you?
Be ready to pull the trigger and make the purchase. This includes your job stability (at least in the same career) and not needing any new purchases that will affect your ability to pass the final review of your credit before your close. If anything changes while you are under contract contact your Realtor first before the seller.
An experienced Realtor knows the sales history and probably the seller’s agent. I have a preferred list I work with because I know how to work them and they know I bring them buyers. Normally they will tell me the best incentives available. Trust me some will not and this will cost you money. They are trained to be friendly and establish trust with you not to get you the best deal. They are gone from your life soon after close and your debt remains.
In closing I like to do it this way. The “If you will then we will” approach. I already know what price it should be. I also know that I want someone above the seller’s agent to say yes or no. Make the supervisor tell you know don’t take the word of the overpaid car salesman.
The initial walkthrough before the actual closing is usually 1 week prior. This is when aesthetics and details matter. You and I will be building a list of items that the builder should repair or complete before the final walkthrough. The final walkthrough is normally the day before or the morning of closing.
Normally any aesthetic flaws will not be repaired unless you notice and document them before your closing. Mechanical flaws can be discovered anytime in the first year and reported for repair. Many if not most homeowners forget until after the first year passes.
I have had the initial walkthrough take two hours and I have had them take 30 minutes. You may find anything from the ceiling in the closets not being finished to tile not being grouted etc. Keep in mind the person in charge of the build is being worked pretty much non stop and only provides intermittent supervision. No one cares more about your home than you and hopefully your Realtor so take your time and do this walkthrough right. Hopefully you will have one of us at your side because we have done countless walkthroughs in the past. There are not many tips or secrets of buying new construction homes for sale we do not know.