Top Tips for New Construction Buyers
If you’re thinking about buying new construction, there are a few things you need to know.
First of all, make sure you have an agent to represent you. Usually what happens is buyers go for a Sunday drive and stop to look at new construction homes. They decide they are really interested in buying one of the homes, and call their agent that evening. Unfortunately, since they already talked to the agent at the property, these buyers have been procured by the builder’s agent.
When this happens, you lose the opportunity to work with an agent who represents your needs and not the builder’s. If you are out looking for homes, make sure to tell the builder’s agent that you are already working with someone. That way, your needs will still be protected by your agent.
When you are buying a new construction home, is it possible to negotiate on the sales price? Maybe. There are a few factors to consider. For example, how quickly are homes selling in that neighborhood? If properties are selling faster than the builder can build them, you probably won’t have a lot of room for negotiation. However, if there is a lot of standing inventory, the builder may be more amiable to negotiating.
Remember though, builders don’t like to reduce the sales price because they don’t want to devalue the rest of the neighborhood. If the builders sell you a home at a lower price, and that sale is recorded, then the next buyer will see that sales price. Ultimately, giving you a discount will affect the builder’s profit going forward.
Look at it this way: if you own a house in a new construction area and you find out that your neighbor got the same house for less money, how would you feel? That is another reason why builders really want to protect the neighborhood value.
With all that in mind, how can you get a deal? As your agent, we will help you negotiate more incentives or more upgrades. You might still have to pay asking price, but you can get hardwood floors all through the main floor, or a stacked fireplace.
Don’t be discouraged if a new construction agent says they won’t negotiate. In most cases, I’m able to get you those upgrades. Usually, the builders will give you some money towards upgrades no matter what.
There are also lender concessions. A lot of builders will help pay some closing costs if you use one of their preferred lenders. We try to use our lender that we’ve been working with for years. He will do his best to make up that difference.