Welcome to our series on New Home Construction Around West Cobb. Did you know that there are currently over 200 new communities around our area, and as those are completed they are being replaced by others? The inventory shortage of resale homes has created a demand for new homes. But these homes aren’t always listed in the MLS, Zillow or other websites you use. So unless you are working with a Realtor® that knows the market, you may not know what’s out there. As a Certified New Home Specialist, that’s what we offer. But, first things first, this series will help you understand the new home market and building process.
There’s something about buying something new – a new car, a new outfit, a new pair of shoes. They all have that “new” smell. And they are a treat, a gift you buy yourself. So, it only seems the same that buying a newly built home can be an exciting experience. Everything is brand new, never used by anyone else. If you have ever visited a builder’s model home, you know what I am talking about. You walk through the staged model, professionally decorated, with detail finishes where everything fits and looks perfect, from the furniture to the accessories.
We’ve all been there, that weekend outing to “just look”. And the salesperson tells you about the community and the current specials. Before you know it, you are speaking to their lender. WAIT! First of all, you didn’t buy a car without test driving a few models, and those new shoes – you tried several stores and different pairs of shoes before you made the purchase. But you are seriously thinking of buying a house – the largest purchase you will probably make – without your own agent?
Did you know that you don’t even have to pay the agent that helps you and guides you through the process? While the Buyer’s Agent represents you, they are paid by the builder. Why would you not want your own agent? Yes, the onsite Sales Agent can help you, but keep in mind that they will have divided loyalties trying to represent the builder while answering your questions.
Typically, you’ll be asked if you’re working a real estate agent, and your answer should ALWAYS be “YES”.
We usually meet with Buyers in our office, and once we have reviewed their situation, we hand them a stack of our business cards so that if they happen to go out “shopping” without us at new home communities or Open Houses, they can register us to handle any follow-up questions. However, keep in mind that we prefer to accompany you on your visits so that we can answer your questions and help some construction details, etc. We guide you through the building process, during the inspections and assist you in taking care of details during the transaction.
The Process of Buying a New Construction Home
After making a decision to purchase a new home, you may determine that this is an easier way to go through home ownership. You determine what you want, select a community, choose a model, and sign the contract. It’s that easy, right? Actually, it’s not.
Prior to becoming a Realtor®, I purchased two new homes. One was “standing inventory”, and the other was being built (but selections had already been made). WAIT! You probably know that the particular model you want is priced at a specific amount. But did you ask what the upgrades cost? It’s easy, right? Not really.
Hire a Realtor That Has Experience Selling New Construction Homes
The biggest lesson I learned was that I should have had a Buyer’s Agent – but not just any Buyer’s Agent – a Buyer’s Agent that understands new construction. More than 60% of buyer-side business has been helping buyers through new home construction. I currently have 5 clients under contract for new home construction.
Who Pays the Realtor®? As we said earlier, we are paid by the builder. It is in their marketing fee. Whether you hire a Realtor® or not, the fee is there and will not be removed. In most cases, the Realtor® must be with you during your initial visit. If you do visit a builder’s model home, don’t register or give your name and information. Typically, they are not going to ask you to leave if you don’t register. I have had many clients not give their name upon their initial visit. Or tell the builder, I have a Realtor®, and I will not provide information until she is here with me.
Get Prequalified
Today, most builders have their own mortgage division, like DR Horton, Pulte Homes and others. Or they have preferred lenders and will offer you an incentive to use their preferred lender. You are not required to use the builder’s lender, but you will not receive the incentives if you use another lender. Keep in mind that the interest rate you are quoted and their fees may not be that competitive. Every lender is required to give you a Loan Estimate that you can use to compare with other lenders. The Consumer Financial Protection Bureau offers a sample of this form, with explanations on its website, and you should review it before you confirm a loan with any lender. A Buyer’s Agent will help guide you through this process.
Many large, tract builders have a relationship with a lender or may even own a mortgage company. Some builders will offer you an incentive (contribute to closing costs) to use their preferred lender. However, the interest rate you are quoted and the fees may not be that competitive.
The interest rate being offered by the builder’s preferred lender may cost you more money in the long run versus the compensation that the builder was willing to give you in closing costs. Just like buying a car, shopping around for an interest rate/costs can create a competitive environment and make the builder’s lender or your lender offer you a better rate. While the builder’s lender is offering incentives, your lender may also provide incentives – you don’t know if you don’t ask. Most lenders will ask to see the Loan Estimate to be able to compare rates and costs.
Your credit score will play a critical part in your loan and help you negotiate for the best rate.
Stay tuned for more information. In the meantime, search new home construction around West Cobb. Let us know how we can help you – you can call/text us at 678-920-3099.
