The Myths of Buying New Construction
I can get a better price by dealing with the builder direct.
Sounds reasonable. After all, with one less finger in the pie, there's more money to go around and why shouldn't you get some of it? Well, like many things that seem reasonable, once you dig a little deeper the situation changes.
Builders, we're talking multi-unit builders not one-off spec builders, are very concerned about the price for which they sell their homes. Selling for less makes the original buyers very unhappy and that often comes back
to haunt the builder, even in future projects. Builders will do almost anything to keep the prices up. That's where your opportunity is.
Builders must maintain the feeling of fairness and value. Fairness keeps everyone happy. Feeling that someone else got a better deal makes people very unhappy. Neighbors talk! Keeping value is important. If appraisers
sense a softness in price, they will appraise at the lowest common denominator. This hurts the loan market and the word gets out and potential buyers will insist on buying for less.
So where's your share? It's not in the price. There are ways to get a good deal from a builder. It requires negotiating and knowing what's important to the builder. That's where having an experienced agent will benefit
you.
It's a new home! I don't need a home inspection.
Another reasonable supposition. After all, the builder has to provide a ten-year warranty, right? Sure. Of course, if the builder goes out of business, that warranty isn't worth much.
But that's not the point. A new home is a very complex conglomeration of myriad pieces. There are hundreds of thousands of parts that go into a house. It is beyond expectation that all those parts will be put together
properly. An axiom in real estate is that a new home takes 12-18 months to shake down.
O.K., fine, you say. So what is a home inspection going to do for me? After all, that's another $250-$300 out of my pocket.
Fair enough. Here's the ticket. A story. A builder had framed a house, put in the plumbing and had the floors laid, tile, in the master bathroom. One of the workers for the tiling sub-contractor had cleaned out his grout
bucket in the toilet. Get the picture? The grout had gone deep into the pipes and solidified. The first time the new owner used the toilet, it overflowed. Plumber couldn't fix it. The builder took several weeks to come around. Then, they had to pull
up the tiling, remove the toilet, grind through the concrete slab, this is Californiano basements, houses are built on concrete slabs, replace the pipes, pour new concrete, fit the toilet back then re-tile the bathroom floor.
Do you think the new owner was somewhat put out about this? A simple home inspection would have revealed this problem and the builder would have fixed it tout suite. Why? Because the buyer wouldn't have paid the builder
the rest of the money until it was fixed.
That's the point of a home inspection. It provides you, the buyer, with leverage over the builder. This leverage is crucial to not only having problems fixed in a timely matter, but it is also a new negotiating point.
Before you move into your new home, the builder will ask you to do a walk-through. This is the time to have a professional inspector with you. The builder will ask you to sign-off on the walk-through. Wouldn't it be nice
to have everything fixed before you move in? Having construction workers tramping through your new home while you are getting settled in is not conducive to pleasant living.
Beginning to see the value of a good agent when buying new construction?
Give me a call if you are ready to buy. Better yet, fill out my buyer's form so I can determine how best to assist you.
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