Real Estate Tip of the Week: Working with Buyers on New-Home Construction
New-home construction has been the hot topic recently – and as a real estate agent, it’s crucial that you know the differences between selling a previously-owned home and one that is still being built.
Because builders will be represented by their own agent, buyers will need you to speak for them and look after their best interest.
Here are some quick tips when it comes to selling new construction:
Real estate agents have the responsibility to fully understand the buyer’s rights and have them outlined in the contract. It might be a good idea to ask the builder’s sales contact to receive an extra copy of the legal documents. Look closely at deadlines that the buyer should be aware of.
Agents also need to talk with the builder to see exactly what will be included in the home. Let’s explain that further:
When your client toured the home, it was probably a model home. It was the high-end, tippy-top version of the “standard” home that will be offered. Touring the home with the builder, you should ask which options come with the home, which options are available, and which options are an additional cost.
Speaking on the builder – it would be beneficial to actually know the builder. Each builder is different from the next; speak with past buyers and look for online reviews to get a better understanding of what they can offer.
This is a large part of your job, so it should come as no surprise that negotiating would be a major step in the new-home process. However, builders actually set a lot of the prices – some that you can’t necessarily debate. It’s important for you to explain this to your buyer. Builders are more likely to pay for closing costs or possibly offer design incentives before they drop prices.
Mortgage lenders are a bit more critical than normal when a buyer is purchasing an unfinished home. Because construction can take months before it’s completed, it poses as a risk; lenders usually can’t “lock in” an interest rate for more than 90 days in advance.
It’s important to know where the buyer is financially – so as to not waste time if the buyer cannot afford a mortgage if rates increase once the home is completed.
Helping sell new-home construction is exciting – but it should also be paired with patience and due diligence.