Are you planning to buy a new house? If this is your very first experience then there is a high chance that you are confused about how to proceed. Buying a new house is an emotional and a big decision. The process might overwhelm you. This is why you need clear guidance when buying a new house, especially a newly constructed house. We have compiled some tips to consider while buying a newly constructed house.
Get an agent
To begin, it is critical to understand that the nice sales assistant in the model house works for the builder, not for you. They are compensated by the builder to sell houses and improvements, not to assist you in finding your perfect home or negotiating the best bargain.
That is why you should hire your own real estate agent, someone who will represent you and your interests. The builder, not so much. Builders already include Realtor commissions in the price of their houses, so bringing in your own agent will not cost you anything.
If you don’t have an agent, builders will not lower their prices to “pass the savings on to you” since it would create a precedent for lowering the prices of the other homes they’re trying to sell. Instead, the excess money will be pocketed by the builder or the builder’s agent.
Meanwhile, you’ll be at a disadvantage if you try to negotiate the best offer and navigate a difficult sales process on your own. Get a Buyer’s Agent to save time, money, and headaches.
That is why you should hire your own real estate agent, someone who will represent you and your interests. The builder, not so much. Builders already include Realtor commissions in the price of their houses, so bringing in your own agent will not cost you anything.
If you don’t have an agent, builders will not lower their prices to “pass the savings on to you” since it would create a precedent for lowering the prices of the other homes they’re trying to sell. Instead, the excess money will be pocketed by the builder or the builder’s agent.
Meanwhile, you’ll be at a disadvantage if you try to negotiate the best offer and navigate a difficult sales process on your own. Get a Buyer’s Agent to save time, money, and headaches.
List Price and final price are NOT the same things
Purchasing a new house from a builder is similar to purchasing a new automobile. They entice you with a low base price, but the amount you pay for the automobile you desire with all the add-ons and improvements is thousands of dollars more.
The same is true for newly built residences. It’s critical to understand what’s included, what “upgrades” are, and how much such upgrades cost.
Preferred lender
Builders frequently provide incentives, like closing cost credits, to customers who utilize their “preferred lender.” The advantage to the builder is that by utilizing their recommended lender, they have more assurance that you are a good credit risk and are more likely to close on time –rather than having last-minute financing difficulties.
However, just because they provide incentives does not imply that the builder’s recommended lender is the best option for you. Inquire with the builder if they will apply the credits or incentives if their chosen lender is unable to meet the rate and terms of another loan (make sure to get this in writing as part of your contract). Then go shopping.
Walkthrough and Warranty
Prior to closing, you should conduct a walkthrough to ensure that all work is completed and satisfactory. This is also the time to provide a “punch list” of objects that need to be repaired or touched up. Even though your new house should come with a builder guarantee (warranties vary by state and builder), you may wish to pay for a third-party examination.
The inspector is likely to notice items that you would overlook and can help you add to your punch list. It’s also worth noting that various builders have varied perspectives on the punch list and what’s “acceptable,” so having an agent and an inspection report on your side may really assist. It’s frequently a good idea to solve serious concerns before closing and moving in.
Negotiation
Builders generally build several of the same or similar homes in a community, so they don’t want to lower the price since it will affect the price of other homes they’re selling. That being said, after the house is finished, every day it remains unoccupied costs the builder money in interest and carrying costs – and another day the builder can’t utilize the financial resources locked up in that house to start building another one.
You should also consider the time of year. Builders may be more eager to work with you at the end of the year than they are in the spring or high summer season. Additionally, builders may offer better discounts for the first houses built in a new neighborhood or for the final homes built as a “closeout”.
Remember, as previously said, builders are more likely to provide credits toward closing expenses or upgrades than they are to offer a large reduction on the price.
You should also consider the time of year. Builders may be more eager to work with you at the end of the year than they are in the spring or high summer season. Additionally, builders may offer better discounts for the first houses built in a new neighborhood or for the final homes built as a “closeout”.
Remember, as previously said, builders are more likely to provide credits toward closing expenses or upgrades than they are to offer a large reduction on the price.
Work with DMV Home Rebates
Do you want to receive a better deal? If you choose DMV Home Rebates as your “Buyer’s Agent,” they will pay you a 1% cashback. Builders, as previously said, incorporate Realtor costs into their pricing structure.
So if you do not employ an agent, they will simply retain the additional money or divide it with their sales associate. Whereas DMV Home Rebates will give you 1% cashback on the price of the house. What else would a buyer want?
