New Construction: Why You Need an Agent to Help You (Part 3 of 3).
Buying a house from a builder seems simple — you show up, sign in, view the model, pick out your lot and upgrades, and sign. “Why do I need an agent for that?” I hear you asking… Read on, my friend.
So far, we’ve talked in Parts 1 and 2 about how an agent can help you review, and will draw your attention to, anomalies in the builder’s agreement and how he or she can help you save money by helping you avoid fees and costs that aren’t typically paid by a buyer in our area. In Part 3 we’re going to talk about the biggest reason to hire an agent to help you — their services will save you money and, for you, they are free!
This was not the case in the raging real estate market of the mid-2000’s but, at this point, every builder selling homes in Dublin Ranch will compensate your agent for bringing you to their development. They are doing this for one reason only — they need help getting their homes sold; they no longer have the seller’s market advantage and that’s good news for you.
When we are helping a client look for a new home, we’re focused on two things: value in pricing and terms and resale-ability. To determine value, we study the market in the Dublin Ranch area, and are focused on making sure the client is getting a good deal. The latest deal we negotiated, our buyer’s price was a full 10% below the current list price, and the only reason that happened was because we knew the inventory better than the listing agent and encouraged our client to stand their ground in the negotiation.
“Re-sale-ability” is also something buyers need to think about when purchasing a new home; in other words, how long will you need to hold it before you will be able to sell it for what you paid. When a builder is still building homes, most buyers are more attracted to new models than they are to resale homes. Also, hold times can be longer because the community amenities may or may not be completed. Most buyers are more interested in purchasing in established communities where the pool, tennis courts etc. are completed than to buy in an area where there are no homes across the street yet and they don’t know what the community will look like when it’s done. There’s a fear of the unknown there. To do the best you can on the investment of a new home, you definitely should plan on holding the home until the development is completed, and your agent should ask the builder how long they expect that will be.
Your agent should also assist you with doing research on the viability of the company from whom you are purchasing the home. How are they doing financially? In the current market conditions, are they going to be able to complete the project? In areas like Mountain House, Lennar Homes is walking away from lots because they can’t cost-justify building a home there right now. Antioch is flooded with uncompleted homes that are owned by banks, and which are being sold as REOs. We’re lucky to live in such a high-demand area, but these are good questions to have answered so you feel comfortable before making a purchase decision. You and your agent may not be able to get hard-evidence on some of the privately-held companies (like Braddock and Logan who are building Positano), and your agent certainly should not represent any of the information they drum up for you as anything more than what it is — here-say. Still, our experience has shown that asking pointed questions can get answers from company representatives; you then get to decide if you like the answers you heard, or if you think it’s worthwhile holding off on a purchase until the economy improves and the company proves they are here to stay.
Purchasing a home, whether new or resale, is an emotional decision. It’s easy to be sucked in by the pretty flags, show-stopper model homes, and the guys on the street corners with big arrows pointing your way. Still, it’s important to bring someone with you who you trust to act as your advocate, and to bring them with you on your first visit — otherwise your agent won’t be paid for their services.
We hope that these blog entries have provided a quick overview on the value of having an agent work with you on a new-home purchase. If you have any questions about any of the communities here in Dublin Ranch, or would like to speak with us about looking at new-home communities or resale homes, we’d love to hear from you.