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Buying New Construction

You've decided to buy a home. Whether you are a first time buyer or a previous homeowner, the allure of brand new construction is undeniable. You'll be the first one to live in the home, and you won't inherit the worn carpet and personalized design tastes from a previous family.

Purchasing a new construction home is different than buying a previously owned home.

A new construction purchase is typically a more complicated and intimidating process as you go through the contract and building phases.

Most buyers have the impression that a builder is a one stop shop when purchasing a home; the house, the sales agents, and the lenders are all available to you in one sales office. Most home buyers are also unaware they can, and should, bring their own real estate agent and lender when purchasing a new build home.

Once you've decided to buy a home, your first step will be to reach out to a lender of your choice and get pre-qualified for a home loan. Whether you decide to buy new construction or a resale home, this will let you know the exact price range you are able to shop within. Don't assume you have to use the lender the new construction sales office recommends; your own bank or credit union might offer you more attractive rates and terms based on your banking history with that institution.

Once you have been pre-qualified by a mortgage lender, you'll want to hire a real estate agent to represent you through the process- even if you are considering new construction. Most buyers have a misconception that buying a new construction home is a simple plug-n-play process and the sales staff at the model homes are the only resource available to you. It is also widely unknown by home buyers that you can use your own real estate agent when purchasing a new construction home.

In general, model homes are staffed by sales agents who are paid to represent the builder. You don't save money by buying directly from the builder without a real estate agent. In a typical real estate transaction the seller pays the commission for both the seller's and buyer's agents, so it is of financial advantage to hire a buyers agent to properly represent you. A seller's agent has a fiduciary to the seller they are representing, just as a buyers agent would have a fiduciary to you once hired. Hiring a buyers agent ensures your agent has your interests in mind, and will present both the positives and potential negatives throughout the transaction. A buyers agent that is experienced in new construction purchases will be your best asset when negotiating your purchase price, closing cost credits, and design upgrades. A well seasoned agent will also assist you in planning which upgrades are best left done after closing, as a builders profit margin in highest in upgrades.

Look at it this way- If you were being sued, would you hire the same attorney as the person suing you? Of course you would hire your own representation that will fight diligently for your best interests.

Most builders will require your real estate agent to register you on your first visit to the model homes. If you visit a builders site without representation, even if you mention you already have an agent and are just looking around, you can lose the opportunity to be represented by your own agent in the purchase transaction.

Some think the job of a real estate agent in a new construction purchase is limited to connecting the buyer with the builder and getting a signed purchase contract. Just as you want your own agent to represent you throughout contract negotiations, you also want your agent representing your best interests throughout the design, build, multiple progress inspections, and final walkthrough.

In addition to being a licensed real estate agent, I have also owned and operated a general contracting company for 10 years, which has given me extensive knowledge in the construction and housing industry. This has allowed me to assist my clients in making educated purchases and improvements, and allows my clients to feel confident in the decisions and purchases.


Samantha Stephens

REALTOR| bre #01954498

Drive Real Estate


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