Working with a real estate agents provides a lot of benefits of buying new construction homes. As newer properties, they often have no defects. They’re also constructed with up-to-date materials, regulations, and amenities. Even so, foregoing the assistance of local buyers’ agents like Lauryn Dempsey can have negative consequences.
An agent represents your best interests, unlike a builder’s agent. As such, they’ll ask questions and search for information to protect you during the process. Read on for a thorough explanation of why to partner with an agent in your new construction purchase.
A Builders Agent Doesn’t Represent You
New construction homes are managed by a builder’s sales agent. Although they can provide a buyer with important information about the build, ultimately, they represent the builder. This means they’re looking out for the builder’s best interests. When it comes to paying extra fees or finding financing, the options a builder’s agent provides will be the best deal for the builder, not the buyer.
Buyers should tell their builders that they’re working with an agent before entering into an agreement. If a builder isn’t aware of this, they might not agree to compensate your agent. This means the buyer is responsible for paying an agent’s commission. However, it’s well worth the extra protection a buyer receives from their agent throughout the process.
Real Estate Agent Will Give Expert Opinions On Buying New Construction Homes
Local agents are experts on Arvada real estate. They’re up to date with market trends in the area. This gives buyers an advantage in negotiating home prices. An agent also knows what buyers in the area are interested in. This helps a buyer decide which upgrades or amenities to include in a new build. A good agent will always advocate for you. An agent experienced in helping new construction buyers can also recommend reputable builders.
A buyer’s agent also knows what questions to ask. Before signing a contract on your new construction home, an agent checks aspects like the home’s warranty, metro districts, taxes, a neighborhood’s HOA fees, due diligence period, and more. They’ll also investigate if your earnest money is refundable and for how long. This means that a buyer can back out of the agreement if conditions aren’t met and be refunded. An agent explains steps that you’re unfamiliar with and communicates with the builder to negotiate the best deal.
Buyers should always tour their new construction home with an agent. Agents provide buyers with protection during the buying process. They’ll know what to look for in terms of the home’s construction and condition. Agents are also a reliable source of information for buyers. If a buyer has any concerns about a project, they can turn to their agent for an accurate answer.
You’ll Save Money When You Work With An Agent
Even though a builder may charge more for buyers working with agents, buyers save money in the long term with professional guidance. An agent knows the typical financing costs for a new construction home. These include a builder deposit, a construction loan, a loan origination fee, and a mortgage down payment. Agents also search for surprise charges, which can be related to materials, labor, upgrades, or contract particulars like a cost escalation clause.
An agent will factor in the property’s resale value during construction. New construction gives buyers a lot of flexibility in the home creation process. As such, upgrades and additions can escalate quickly. Using data about the area and appreciation rates, an agent can reign in buyers wants and needs to ensure there is a return-on-investment. For example, the median home value for homes for sale in Arvada is $609,357. Appreciation rates for the past year are at 14.98%, making it one of the highest-appreciating areas in the country. An agent uses this information to weigh the long-term value of home additions.
Real Estate Agent Can Find the Best Financing
Developers can recommend an in-house lender for buyers. They may also offer to convert a construction loan and a mortgage into a construction-to-permanent loan. Although this makes the process more convenient, these lenders don’t always have the best rates. A buyer’s agent can help their clients research the best mortgages.
An agent has a professional network of connections that they’ll use to help you navigate home financing. Buyers interested in new construction should also get quotes from multiple different lenders. Doing so can save buyers thousands over the years.
Real Estate Agent will Review the Contracts
Having a buyer’s agent on your side is extremely valuable when reviewing a contract. Contracts typically use dense legal language, which can be difficult for a buyer to understand. An agent can break down official paperwork in layman’s terms. This ensures you know exactly what you agree to. Buyers working on their own who don’t agree with a contract may have trouble negotiating terms. A buyer’s agent will already have negotiation strategies in place that they can use when communicating with builder’s agents.
An agent is also proactive in searching out aspects of a contract that don’t protect their client. Before agreeing to a Westminster real estate new construction project, an agent will advocate for contingencies. Home inspection contingencies for new construction homes can still be valuable, as there may be defects with the construction. Agents can also hedge down the advantages a builder has in standard contracts by rewording the contract’s clauses.
Frequently Asked Questions About Buying New Construction Homes with an Agent
What is the down payment for buying a new construction home?
The down payment for a new construction home varies but typically ranges from 3% to 20% of the home’s purchase price. The exact amount depends on factors like the type of loan, your credit score, and the builder’s requirements. Builders may also ask for a deposit during the construction phase, which is separate from the mortgage down payment.
What is the step-by-step process of buying a new construction home?
- Hire a Buyer’s Agent: Start by partnering with an experienced real estate agent who can guide you through the process.
- Choose a Builder: Research reputable builders in your desired area and explore their communities.
- Secure Financing: Get pre-approved for a loan and compare lender options, including the builder’s in-house lender.
- Select Your Lot and Floor Plan: Work with the builder to choose the location and design of your home.
- Sign the Contract: Review the builder’s contract with your agent to ensure favorable terms.
- Customize Your Home: Choose upgrades and finishes that align with your budget and preferences.
- Construction and Inspections: Monitor the construction process and schedule inspections to ensure quality.
- Closing: Complete the transaction and receive the keys to your new home.
What are the benefits of buying new construction homes for first-time homebuyers?
For first-time buyers, new construction homes offer peace of mind with warranties and minimal maintenance costs. You’ll also enjoy modern features and the ability to customize your space. Additionally, many builders offer incentives like closing cost assistance, which can make the process more affordable for first-time buyers.
How does buying a new construction home compare to buying an existing home?
Buying new construction provides benefits like customization, energy efficiency, and fewer repairs, whereas existing homes often come with established neighborhoods and mature landscaping. However, new construction may involve waiting for the home to be built, while existing homes are move-in ready.
What are the pros and cons of buying new construction?
- Pros:
- Customization opportunities
- Modern design and energy efficiency
- Warranties for structural and system defects
- Lower maintenance costs
- Cons:
- Longer timelines for move-in
- Potential for unexpected upgrade costs
- Limited negotiation on price
- Lack of mature landscaping and neighborhood character
Should I buy a new construction home or an existing home?
The decision depends on your priorities. If customization and energy efficiency are top of mind, new construction is a great choice. If you value a quicker move-in timeline and established neighborhoods, an existing home might be better suited to your needs.
How an Agent Adds Value Beyond the Basics
Reviewing Contracts and Contingencies
Contracts for new construction can be dense and filled with legal jargon. I help my clients review these documents to ensure they understand all terms and identify clauses that may not be in their best interest. For example, I advocate for contingencies like home inspections, even for new builds, to ensure quality construction.
Finding the Best Financing Options
While builders often recommend in-house lenders, they may not always offer the best rates. I encourage my clients to get quotes from multiple lenders to find competitive terms. My professional network includes reputable mortgage providers, ensuring buyers have access to the best financing options.
Monitoring Construction Progress
I accompany my clients during key stages of the construction process, including pre-drywall walkthroughs and final inspections. This oversight helps identify potential issues and ensures the builder adheres to agreed-upon specifications.
Always Partner With An Agent When Buying New Construction Homes : Agent Matters
Buying new construction homes is best completed with the help of a local agent. A builder’s agent can provide buyers with resources and information, but they ultimately work for the builder. Buyers’ agents have the expertise to protect your interests when creating contracts, monitoring construction, and researching financing.
As your agent, I provide insights into local market trends, negotiate favorable terms, and help you navigate the financing process. From selecting the perfect lot to reviewing contracts, I’m here to make your new construction experience as smooth and rewarding as possible.
When you’re ready to start your new construction journey in the Denver area, contact experienced agent Lauryn Dempsey to guide you through the process.