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New Construction |
14 Facts about New Construction
Having a realtor represent your interests in a new construction purchase in the State of Florida does not cost you any money as a buyer. The builder has included a percentage into his home's price for the purpose of broker participation. Legally, the builder must have one price for all buyers, whether represented by a broker or not! The builder will just make more profit when you do not have representation. Strangely enough, most successful builders prefer that buyers be represented by RealtorsŪ, it makes things go more smoothly and creates happier clients. How could even a small development of 50 homes, have a smooth sales process if the builder's agent is handling all the details of 15, 20 or even 30 transactions at once?
There are three types of new construction.
Tract homes are built in developments or sub-divisions, usually 50 homes or more. This is the least expensive type of new construction. Buyer's choose from a limited number of "elevations" (exterior appearances) and floor plans. From that starting point buyers are given a choice of flooring, kitchen, bath, appliance and landscape "upgrades". This allows the buyer to individualize their home. It allows the seller to increase their profit margins. Remember, the agent sitting onsite for the builder is not representing your interests. An experienced Realtor'sŪ input can be a lifesaver at this point! Remember, developers usually aren't very flexible on base price of their homes but upgrades can be negotiable. Most respected builders and developers welcome buyers who are represented by a RealtorŪ in a new home purchase.
New homes may also be so-called spec homes. Spec stands for speculation, meaning that the builder has built the home under the assumption that a buyer will be found to purchase the home during construction. This is common when buildable lots become scarce in an area. For example Melbourne Beach and Indialantic. Buyers who can't find what they want on the resale market, and want a home sooner it takes for new construction, often buy spec homes. Many times the buyer can choose flooring, paint and landscape options during construction of these homes. Pricing of spec homes and upgrades are usually negotiable, which is why buyers need a Realtor'sŪ market savvy and experience when buying one of these homes. Once again, most reputable builders welcome buyers who are represented by a RealtorŪ in these transactions as well.
Custom building is the third type of new construction. This is the most expensive, complicated and rewarding type of new construction. An experienced RealtorŪ can be a lifesaver here. Of particular value will be is your Realtor'sŪ input on expected future growth in the area, market pricing factors, construction financing pitfalls and help in choosing the perfect lot for your home's footprint and layout. Buying a custom built new home is a complicated undertaking that involves many more decisions than buying an existing home.
A few words about "registering" with builders!
It is important to understand that buyers who wish to be
represented by a RealtorŪ must be "registered" along with their RealtorŪ on
their initial visit to the "sales center" or developer's offices. In
actuality it is your Realtor'sŪ representation of you that is being recorded. If
you go with out your agent on the initial visit and purchase within the next 3 months we
cannot represent you on any purchase made with that builder at that site. The reason
is that if you do not have representation on your initial visit and decide to purchase
there, the seller's agent is considered to be the "procuring cause" of the real
estate transaction and no commission can be paid to a third party.
The easiest decision you have to make... To be represented or not?
How can I best compare different builders or projects? With experienced help! As an experienced RealtorŪ, working as your buyer's agent, it is our duty to represent your interests. We will share with you our experiences and expertise regarding the past performance, present activities and future prospects for any builder you are considering. We will register you at any project, or projects, you are interested in on your initial visit. We will ask questions, listen to the agent's answers and look for potential problems. We will view the development and individual homesites with you even show you individual homes. We will give you an honest evaluation of how the home, the development, and the builder measure up today and for future value.
What factors should I consider in selecting a lot within a new subdivision? Location is the cornerstone of value in real estate. As a rule of thumb it pays to spend more for location. But location costs more! Waterfront lots, oversized lots and golf course lots are all desirable and will bring a premium today and in the future. We can use our experience and professional knowledge to advise you about these issues. Ultimately, every individual has a unique set of values and needs that will determine what any particular piece of property is worth. We can help by giving you an honest assessment of how different types of sites are valued by the marketplace.
Is it a good idea to use the builder’s mortgage financing package? Sometimes! Possibly, depending on your personal finances and the type and amount of incentive the builder's financing includes. The builder may pay for the title policy or pay a portion of the closing costs. We have a spreadsheet for you that will compare any number of various financing scenarios to see which one is best for you now! And in the future.
What is included in your new home? What you see in the builder's model may not be included in the price of your new home. Items to ask about include window coverings, ceiling fans, landscaping, fences, appliances, crown moldings, tile floors, countertops, whirlpool tubs and other luxuries. Some builders include an oven, range and dishwasher, but not a refrigerator! Others may include the refrigerator. Nobody likes surprises, particularly on the walk through of their new dream home one hour before closing!
Which upgrades should I purchase? Kitchen and bathroom upgrades are generally the best investment. Going with a higher grade of flooring (from carpet to tile) usually is a good investment. However, upgrading to the most expensive tile may not give a return on your expenditure at sale time. Upgrades should be consistent with what is customary in homes within the area and price point. Most "add on" items may be purchased more economically after closing. For example, a builder-installed microwave could cost twice as much as purchasing one yourself later. In general, builders try to charge a high-markup for upgrades.
Remember...
It costs you nothing to have professional representation, assistance and counseling from a professional RealtorŪ when building a new home! All compensation earned by your RealtorŪ is paid by the builder and does not effect on the price of your home. Reputable builders encourage RealtorŪ participation. Top builders know that represented buyers enjoy a smooth, quick and positive buying experience.
Hiring an experienced RealtorŪ as your buyer's agent gives you an advocate for your financial interests. The developer has a selling agent representing his financial interest. Level the playing field, your Realtor's experience and influence represents strength and leverage on your behalf. If you ask the right questions at the right time, you may get some very surprising answers at a later date.
Resale value and future equity. Make the most of your investment. Questions concerning site locations, builders, designs and upgrades are important. Your RealtorŪ knows you are not just building a home today, you're building an investment for your future.
Two heads are better than one. Buying a home requires the teamwork, communication and cooperation between many different entities. No one is better trained or more experienced at coordinating the complex interaction between buyer, builder, lender, and title company than your experienced RealtorŪ.
Our promise to you: As your buyer's agents we will always represent you, and your interests, in the purchase of your new home.
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