So, you’ve decided to purchase new instead of pre-owned? Great idea, and you’re not alone! According to MetroStudy, Houston remains the second strongest market in the country for new home starts, only behind Dallas/Ft Worth for 2016. And thank goodness for that! We’ve been operating under a housing shortage for some time inside the 610 Loop and needed the 2016 bump in new construction to help keep up with demand.
In this blog I’m not going to count down to the #1 reason to use a real estate agent to purchase a new home. I’ll tell you upfront: you need someone in your corner, representing your interests. And for those who think they’ll get a better price from a builder if they don’t use an agent, you could be right…but what if you’re not? Before you sign without an agent, here are some things you may not know:
Most builders won’t discount the price of a home just because you come alone.
The builders who will do that probably would have given you that much off the price of the house anyway. So you might get the price you want either way, but what about the rest of the transaction through closing? Who has your back? Who’s making sure the builder is sticking to the contract and is on schedule? Most people may not have the time or experience to manage the process themselves. Your agent essentially acts as your project manager while your home is being built.
Most builders won’t discount the price of a home, full stop.
The reason is simple: if they discount your home, it has the potential to affect the sale price of other homes in the development. They’re just not eager to do that unless there’s a very good reason.
What you see is not necessarily what you get.
If you’re visiting a builder’s model home, you’re likely seeing upgrades galore! The marble subway tile kitchen backsplash you fell in love with may cost extra, and even pavers around your back porch might be an upgrade. An agent will know what items are typically shown as upgrades in model homes and the right questions to ask when it’s so not obvious. Speaking of upgrades…
Some builders would rather give you upgrades than take anything off the price of the home.
And, some will even pay closing costs. Some will throw in a washer and dryer. Some might even throw in a fridge! Your agent knows how to negotiate these items, and what the fair market value for them is in the world of real estate. She or he will fight to squeeze everything they can out of the builder for you.
A builder, no matter who they are, is working on getting the most money out of you for their bottom line.
Buying a home is a very personal, emotional journey…for you (and that’s ok!). For the builder, it’s all about the numbers. If you’re not represented by a professional negotiator, then you’re buying your new home from one who has little incentive to give you a “deal.”
Builders don’t have to use TREC contracts (which are drafted to protect the consumer) – they can use their own.
We live in a world where contracts are binding. Without an agent, you’re signing a contract for one of the largest investments you’ll ever make using a document that someone without your best interests at heart has written. I don’t know about you, but just the thought of not having another pair of eyes on that contract makes me cringe! Not only will your agent have handled multiple new-home contracts, she or he will know your rights and reasonable expectations you should have of a builder according to local laws.
Every builder is different.
Your agent will know which local builders are likely to budge on price and who isn’t; who is likely to offer other incentives like the ones we talked about earlier in this blog, and who will sit on inventory and wait for their price. Most importantly, an agent who is working for you will know local builders by product and by reputation in the market. (Side note: There were a lot of builders who came and went during the early 2000’s in the inner loop market, building 3-4 story townhomes as fast as they could, and cutting corners to do so. A good inner loop agent will know who those builders were, and can help you identify homes that may not have a builder standing behind their home warranties anymore.)
Hopefully I’ve convinced you to hire an agent for your purchase of a new construction home. There’s no good reason not to, and every reason to seek one out. It won’t cost you anything, but could literally save you thousands in the long run. If you’ve ever purchased a new construction home, drop me a line or post in the comments – good or bad! I’d love to hear from you!
See you around town!