Tips for buying new construction homes for sale and keeping as much of your money as you can in your bank account while getting the best warranty and purchase protection for your family. That would have been to long of a name for the article. However that is what I want to help you do. I am a Realtor in the Orlando area. This information will help you no matter where you live. I have been a Realtor in more than one state and this information comes from over 30 years experience buying and selling homes and knowing other Realtors who worked for construction companies selling new construction homes.
Home buying is an awesome time in a person's life. It is this hope and excitement that blinds the buyer to the fact he/she is dealing with professionals who have the builder's best interest in mind. It just so happens that the builder's best interest is this. They want to take as much as your money as possible and still manage to keep a good enough reputation that they can still find new clients. Really what the buyer is doing is equivalent to this, they are making a purchase 10-15 times the size of a new car and trusting a new car salesman. They are the exact same thing and the companies have the exact same goals. It is a business. New car lots have the same goals. They want as much of your money as they can get, they want to limit their liability and keep their reputation good enough to maintain their business. Hopefully the following walkthrough and tips will help you enjoy your new home much more. I promise some useful tips just not all of them, every situation and builder are slightly different. As are car lots.
Keep in mind, a company that builds homes will not encourage you to not use a Realtor unless they do not want someone who is experienced in the process on your side. I have companies reach out to me every week encouraging me to bring them clients in various ways. Those companies know that it will be a better experience for you and you will be more likely to speak well of the new home purchasing process.
Before you do anything else I recommend you get prequalified for your mortgage. Preapproved is better. Here are some suggestions. Stop moving large sums of money between accounts. Also if you fill out your loan application online do not copy past your name into the blocks. Yes they can tell and this is a red flag of fraud. Take the time and fill everything in honestly and methodically. Banks are thorough and will check you again right before you close. No new large purchases or you will endanger the close. Yes I have seen it happen. Yes the bank will notice.
Obviously income, debt and credit score will be considered by the lender. The mortgage broker "may" make more money if you borrow more. There is a fee called the mortgage origination fee. It is typically 1% of your mortgage. That is just one example. You can expect to get approved for a payment that will be 30-40% of your monthly net income. 40% for people with really great qualifications. At this point you could benefit from considering these things. Property taxes, Insurance and Maintenance are three expenses that can go up. What other expenses in your life may go up? Are you sure your income will? Also you are going to want furniture, window treatments etc. Lawn care is going to have to be done by someone. Will you be needing a new car? Maybe staying closer to that 30% number will make you happier in the long run.
REALTOR TIP #1- Do not buy the nicest home in the neighborhood or the least expensive. If you want that level of a home buy in another neighborhood which the home you want is average in. When it comes time to sell your house again you will see why. The average home is average because more people are in the market for it. The home will be much easier to sell and you will be more likely to get more money for your investment.
Buying new construction homes for sale is absolutely right for some people. It is not right for everyone. Some people change their mind after weighing the pro's and cons. Remember I am a Realtor not a family member. I want you to be happy with my advice and services so you will recommend me and use me again. If you buy either it is of no concern to me if you are happy with my services and your home. Here are some things to look at when you are considering new construction homes for sale.
Strongly consider researching the communities and the builders. Also strongly, very strongly consider getting an experienced Realtor. Some people hate doing this and here are two reasons. They already know a Realtor, they just do not Realize that there are some Realtors out there that are awesome or don't know how to find the good ones. Like any profession 10% are really great. By the way really great does not mean a production farm of 10 agents so you can claim 100 sales per year. Really great means local knowledge and actually caring about the process and the person that is trusting you. Realtors are trained 10 times as much on finding clients as they are doing their job. There is a reason for that but it is not for this post.
I have written about 100,000 words on my site about the local communities. I have zero negative reviews online. Zero. Look for someone like that. If your around Orlando contact me here. Most readers will not be so please consider the 2 items above in your search for a Realtor. They will likely cost you $200-$500. That will be in a Administration fee you will be told about later. If they tell you upfront that they will cost you nothing make them hold to that pledge when they advise you of the fee. By the way I pay those fees myself. The client pays me by being pleased with my services and referring me. It is cheap advertisement.
Your new Realtor should accompany you on your first visit to any new construction community and be there when you meet the companies Realtor or Sales Agent. If not then your Realtor has endangered their commission and the builder's agent may get it all. If you have gone under contract with a Realtor this can be a legal and potentially a financial issue for you. So make sure to schedule your visits or follow your Realtors advice. It is going to be worth it later. Remember this also. The builder's salesperson is the new car salesperson. And the more friendly and pretty they are the more you need to be careful. They are asking you questions just to build a relationship with you to establish trust. They have been trained to do this and they may not really have a dog just like yours.
Realtor Tip #2- Of course you are going to drive around in the community and you will be taking a look at the communities amenities. I would stop and talk to people who live in the community. How was their experience. What gems might they know? Would they do anything differently?
Realtor Tip #3- Some communities have multiple builders you can choose from or you can even use your own. There are pros and cons to this. For quality and long term price stability I would prefer a community filled with homes built by one builder with a good reputation. Most of the building in the area I live in you must use the builder everyone else has used or one from an exclusive list. You can not bring in "Joe Blow Construction."
Realtor Tip #4- Phase developments. When your development is going to be built in phases here are some things to consider. Your builder may not still exist if the builder is not a larger builder. This means the plans for that million dollar community may turn into plans for $500,000 homes. Did the municipality get the builder to post a bond for the shared amenities that will be built?
The builder will be showing you upgrades. As soon as the builder thinks you are hooked then expect the focus to shift from amenities to upgrades. The builder offers them to allow you to personalize your home. Also to increase the builder's profit. One common upgrade that benefits both seller and buyer is to change the appearance of the front of the home with bricks or stone. This can make the same model appear different. Sometimes the garage is moved to the other side of the home etc. When you initially get information on the models take the information home and make note of the standard features. That can influence your bottom line in the long run. The earlier in the process you decide on upgrades the cheaper they will be. If you are still bargaining on the price try to settle it with an upgrade. This can be mutually beneficial.
I am going to try to make this apply broadly. Some states, local municipalities and builders will differ. So I am going to err on the side of caution for you. Not all warranties and inspections are equal. There are some ways to safeguard yourself and family.
My last little bit of advice is this. At least speak with 2 lenders. If you have ever purchased a new car and taken in a preapproved loan you may have noticed this. They can always beat the terms. Well truth be told may mortgage brokers are the same way. The broker may not make 1% on the loan he/she may only make .95% on the loan.
This is something to keep in mind. Your Realtor is not allowed (it is illegal) to receive compensation from a mortgage broker for a successful mortgage issuance. We recommend mortgage officers who deal with lenders who do not cause problems at the last minute.
Thank you for reading this article and I hope it helps you in some way. If you want a great Realtor in the Orlando area contact me. I look forward to hearing from you and sharing more tips for buying new construction homes for sale.