Top 10 Commandments when buying New Construction
Real Estate Agents offer guidance to New Construction Purchase
Yesterday, I read an article published by the Florida Realtor Association stating that real estate agents should help buyers understand the complicated process of buying new construction.
I was surprised, because most Florida Realtors are predominantly focused on the resale market, rather than new construction market.
Because our office specializes in home buying, we do sell a lot of new construction properties. As a result, we are well versed on the in’s and out’s of buying. Our focus is only on the best interest of our buyer clients.
Watch the video of a home buyer loosing money on new construction…he went alone.
Orlando is Flourishing with New Construction Properties
Orlando new construction is booming in all the counties, especially Orange County. A prime location is Metro Orlando, one of the top three areas to buy new construction properties in the State of Florida.
In 2013, 3,695 new construction homes were built, in 2014 4,690 homes were built which was a 27% increase.
The first quarter of 2015 has added 5,215 properties, which is already an increase of 11% for this year.
Top 10 Commandments of buying a New Construction Home
1) Thou shall take their buyer agent with them to new construction.
New construction communities prefer buyers to be accompanied with their buyers agent when they first visit. If this is not feasible, discuss first with your buyers agent how to explore new construction communities on your own.
2) Thou shall get pre-approved before searching for properties.
Like on the resale market, its important that you search for properties in your target budget. Many buyers do not know their budget until they get pre-approved. This is especially important when buying a new property, because often your final purchase price will not be determined until AFTER you go to contract. The upgrades you choose, could be an additional 10% of your purchase price.
3) Thou shall not fall in love with the model homes.
The models home are upgraded with every possible feature, and professionally decorated and very appealing, it easy to fall in love. But the reality is your home will not have $50,000-$200,000 in upgrades and your home will be much more basic. What you see is usually not what you get.
4) Thou shall not assume any design features that are not in writing.
Builders change standard features and options, as the market and vendors change. If you saw gutters on the model do not assume that is an available option or included. In addition, read the small print on the floor plans, like “opt” means optional. Optional does not mean its included. When in doubt about features or selections, make sure you ask your buyers agent. Just because something was included on the floor plan at a model in a different community, does not mean the new community will offer the same.
5) Thou shall read and understand the builders contract.
Builders contracts are one-sided for the builder. Having a buyer contingency in the contract is rare. It is important that you understand the terms of the contract and what your responsibilities will be. Unfortunately, builders sales representatives work for the builder, and are not required to make sure that you understand the language in the contract. The time to understand the contract is before you sign it. We can help.
6) Thou shall not assume pricing and incentives are stable.
Builders are corporations and they care about the bottom line numbers to keep their shareholders happy. Builders will offer incentives to remain competitive, but these incentives change depending on demand, time of week, month or year. They maybe offering a fantastic deal one weekend, then take away the next week. By the time you are ready to buy the generous incentive may be gone.
7) Thou shall not think the sales person will tell you everything.
Builders sales person will not volunteer any negative aspects to the community, floor plan, house or lot choice. They will not volunteer if you are purchasing in a sub par school district, or adjacent property is really up for redevelopment. Their job is to protect the builder.
8) Thou shall bring your buyers agent or a friend to the design center.
Most buyers learn about color options, and upgrades for the first time when they get to the design center, which is several weeks after contract. This can be a very overwhelming experience to sort out the many choices. Lots of decisions need to be made in just a 4 hour window. We are experienced on what features will build equity and what upgrades are a waste of money.
9) Thou shall not think the home is flawless.
Production builders have rigid schedule and keep the building process going. Some building managers a responsible for building 20-40 homes at one time. In addition, the building code allows for certain variances such as walls to be off 1/4 of to 1/2 inch. These normally are not noticeable. As a result, its important to have a home inspection to catch things that got missed. Even brand new homes have flaws. Most reputable builders will correct cosmetic and functional items that come up.
10) Thou shall know their buyers agent is on their side.
Some builders staff are better than others about keeping the buyers agent informed during the process. Keep your buyers agent informed, if the builder does not, so they can assist with items the come up, negotiate alternatives, and keep your best interests represented at all times.
Buyers Agent Services when buying New Construction
When I visit the new construction sales centers with my buyers, I see many buyers without real estate agents. I wonder if the buyer will really understand what they are buying, their options, and what the contract really says.
Every new construction home buyer needs an advocate to guide them through the process.
There is no additional cost for you to hire a buyers agent as the builder will always pay the agent. There is also no discount if you buy alone.
How Buyers Broker of Florida helps with New Construction
- Prepare you to be ready to seize a good deal.
- Shares the best property type and time to buy.
- Learns your design options ahead of contract.
- Understands the home and community you are buying.
- Helps negotiate your contract.
- Explains the buying process from start to finish.
- Helps with lot selections, upgrades and inspections.
- Helps with problem solving to assure a smooth closing.
Smart home buyer always choose to be represented. For a complimentary phone consultation with no pressure, call us. 407-539-1053