Purchasing a new construction home is an exciting milestone, but navigating the process requires a strong understanding of buyer representation, pricing, negotiations, and inspections. Real estate professionals Emma Wolf and Jake Newhouse share essential insights to help buyers make informed decisions when purchasing a newly built home.
Is it Recommended to have a Realtor for New Construction?
While having your own representative is not strictly mandatory, it is highly advisable when navigating a new build transaction. It helps to keep in mind who the agent on-site represents.
As Emma Wolf explains: "Just like if you are purchasing a home that has already been built, there is going to be a listing agent representing the seller, and in this case, the agent is representing the builder. Making sure that your best interest is kept top of mind, it is definitely good to have an agent."
Jake Newhouse emphasizes that having independent, licensed representation provides essential peace of mind throughout the transaction.
Understanding Advertised Pricing and Allowances
While the advertised price of a new construction home can be accurate in certain cases, the final cost ultimately depends on the type of builder and whether additional options are added. Buyers selecting updates, upgrades, structural additions like a screened porch, or custom landscaping will see that price adjust.
Regarding custom home builds, Jake Newhouse notes: "You are going to build out your plans around allowances, and it will depend on if you can and are willing to stay within those allowances to stay within that budget."
For spec homes, standard inclusions vary significantly across different builders. Emma Wolf points out: "Every builder, if you are buying a spec build, is going to have different things included in the purchase price. Looking into what is included will help you better understand what you can afford."
Can You Negotiate With a Builder?
Buyers often wonder if there is room to negotiate the purchase price with a builder. While builders rarely discount base prices to protect their market value and appraisal comparables, buyers can negotiate value through concessions and upgrades.
Jake Newhouse explains the builder perspective on price negotiations: "Most of the builders are going to want to stay close to, if not right at, their list price just so they do not come across looking like they are a discount builder. Negotiating seller concessions, upgraded appliances, or an upgrade in flooring can go a long way."
Walking into a Model Home
Walking into a model home can present an impressive visual showcase, but buyers should remain aware of what model homes are designed to do. Model homes feature top-tier finishes and maximum upgrades that may not be standard in base models. Furthermore, model home staff represent the builder's specific portfolio rather than the entire market.
Jake Newhouse highlights the primary difference when working with an independent agent: "The representative that is working there is working for that company, and their job is to sell you on their product. On our side of the world, we have an endless amount of options."
Emma Wolf adds that securing a private showing with your own representative allows for broader options: "Getting a private showing with an agent, you can have that more open conversation. We have access to the full MLS to figure out what home is best for you rather than which floor plan of that builder is the best fit."
The Importance of Home Inspections
A common misconception is that brand-new homes do not require independent inspections. Whether purchasing a completed spec home or undergoing a multi-stage custom build, third-party inspections remain critical.
For custom builds, Emma Wolf highlights the phased inspection structure: "Before the drywall goes up, they will look at framing, mechanical, plumbing, and electrical. Once drywall is up, you will have a final punch list, and then again once you have been there for about 11 months to make sure that, as things have settled and shifted after construction, there are no major concerns with the structure."
Addressing spec homes, Jake Newhouse adds: "A good builder is going to encourage you to have a home inspection because these houses are built by human beings; there are going to be things that get missed. It never hurts just for the peace of mind."
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