Got the itch to go buy a brand new, freshly built home? Don’t let the bug to get into a new home let you fall into the trap of buying a new construction home from a builder’s agent.
The allure of wandering through bright, shiny new construction homes can be intoxicating. Before you know it, you can find yourself roped into using the builder’s agent and loan program. Both of these things can cost you thousands of dollars. Something as innocuous as signing into builder’s “guest book” can be enough to commit you to making all offers through their agent.
Never Buy From A Builder’s Agent
Often times I run across people that are asking “why should I never buy a new construction home from a builder’s agent?” The answer is stunningly simple.
The builder’s agent only represents the builder’s best interests and not yours. Their only goal is to get the highest and best price for those homes that they can squeeze out of you.
You can liken buying home from a builder’s agent to going to court and representing yourself. There you sit, doing your best to negotiate, while the other side has an attorney with years of experience. Can you win in that situation? Maybe, but why risk it?
Key Point: Builders agents will work to get the best deal possible for the builder, not you.
Hire Your Own Agent To Buy New Construction Homes
Before you start your search for a new construction home it is imperative that you find a qualified real estate agent that you want to work with. Buyer’s agents are obligated by law to look out for your best interests in real estate transactions. A good buyer’s agent should be able to direct you to the most reputable builders, desirable neighborhoods and steer you clear of other hidden traps.
When shopping for new construction homes, you want to let your agent lead the way. Some builders will attempt to save money by refusing to pay your buyer’s agent’s fee if they didn’t introduce you to the property. Meaning that if you go out driving and see a new community and even just start talking to the site agent, they may not be willing to pay your agent and insist that you cover that fee.
Ultimately your buyer’s agent will be your best negotiating tool when dealing with the builder. They should save you money on the purchase price and assist with negotiating as many upgrades and options as possible.
Key Point: Hiring your own agent will protect you and save you money.
Have Your Agent Suggest A Home Inspector
Far too often people assume that because they are buying a new home, that they don’t need an inspection. If you are buying a new construction home from a builder’s agent, they aren’t likely to suggest one either. The fact is that mistakes can be made and problems can exist in brand new homes. Pipes not connected, wires put in wrong and more are not uncommon, especially when builders are in a frenzy to get new homes up. An inspection by a qualified building inspector can save you a great deal of heartache down the road.
Ask your agent for their suggested list of home inspectors. Any agent that has been working for any length of time should have at least two or three that do excellent work at fair prices.
Key Point: Always get a home inspection to help discover flaws in your potential new home.
Don’t Get Suckered Into Using The Builder’s Lender
Getting trapped into using the builder’s agent often times getting roped into using the builder’s lender as well. As part of getting ready to go new construction home shopping, your agent should connect you with a lender and get you prequalified. This will give you the opportunity to shop for the best loan product possible for you.
There are some situations where builders are acting as the lender and as an incentive are offering incentives in their loans. This is the exception and definitely not the rule. Shop your loan, work with a good loan officer and save yourself money and headaches.
Key Point: The builder’s lender doesn’t always have the best loans available to you.
Buying A New Construction Home From a Builder’s Agent Is A Trap
These tips will help you steer clear of new home builders traps. Avoid buying a new construction home from a builder’s agent by planning ahead and finding an agent that represents your best interests. Then that agent can refer you to other professionals like mortgage brokers and home inspectors that will also work to keep you financially safe.