November 4th, 2011 11:11 AM by Jodie Ford
How to AVOID Mistakes When Buying New Construction
New home builders are offering very enticing incentives to home buyers, especially to Joint Base Charleston military members and Charleston Hometown Heroes. Before taking advantage of these offers, here are a few ways to ensure YOUR best interests are protected:
Hire Your Own Agent
· The builder's sales agents are paid to represent the builder, regardless of what they may tell you. The sales agent for new construction solely represents the seller (builder), and ultimately, looks out for their best interest. They are there to sell you; it isn’t their job to make sure you are getting a good deal. Whether you are a first time homebuyer or have previous buying experience, an exclusive buyer’s agent can be a powerful ally throughout the buying process, from lot selection to choosing upgrades that will enhance the value of your future resale. You may feel that the site agent should look out for your best interests, don’t be fooled, choose an Exclusive Buyer’s Agent for expert advise, counsel and 100% representation.
· Your own agent will represent you, be your fiduciary, and is required to disclose the positives as well as the negatives about the transaction. Builder's agents don't discuss drawbacks.
· Your agent will advise you about removal of contingencies and your rights, and make sure you understand your liability and commitments.
· Help to determine whether or not the materials used by the builder contain chemicals that are hazardous to your health. If your contract contains a warning about health issues, it's probably because it's a valid concern and other buyers have gone to court over it.
**Buyer’s Agents Will Guide You Through the Process – Builder’s Agents WILL NOT**
Don't Automatically Use the Builder's Lender
· A builder's lender might not offer you the best deal. Moreover, the builder most likely owns the lending company. The builder may offer you special discounts, such as no closing costs or money towards upgrades, for using his/her preferred lender. This may sound great up front, but you want to insure you’re really gaining a long-term benefit by going with the builder’s lender.
· Shop around and interview your lender. Find a mortgage banker whom you can trust and with whom you feel comfortable doing business. Your agent may refer you to his or her private list of wholesale lenders.
· Ask to see a copy of your credit report. You can request your own free credit report before shopping for a new home.
Verify Option and Upgrade Pricing
· Determine which options and upgrades you want. Bear in mind that for many builders, the profit margin is highest in upgrades. Some builders can sell a home for almost bare construction cost because they make the bulk of their profit in the upgrades.
· Find out whether your lender will lend on all the options / upgrades you have chosen. If your lender will not finance 100% of your selections, you will be required to pay for it in cash.
· Ask about cancellations and whether you will be held liable for items the builder cannot return to a vendor.
· Some contracts give the builder the right to choose your upgrades if you do not submit your request within a certain period of time.
· To save money, consider which upgrades you could purchase and install yourself after the escrow closes. However, realize that some upgrades such as CAT-V, DSS or security wiring inside the walls are easier to do before construction.
Hire a Home Inspector
· Always, always, always get a home inspection when you buy. And hire a licensed and accredited individual to perform the inspection -- not your dad or your buddy contractor, get a real inspector. Be there for the inspection and ask questions because a new home can contain defects. The HVAC system might be too small or the plumbing could be installed backwards. Construction workers make mistakes. (And let's not even talk about the mustard-stained McDonald's wrappers stuffed in wall cavities.)
SEARCH THE ENTIRE CHARLESTON MLS – including New Construction!
Jodie Ford - I specialize in helping military families enjoy a smooth PCS in and out of Joint Base Charleston, South Carolina. I have a passion for helping people, and I love what I do. Call me (843) 819-4398 and let me make this the easiest PCS yet!
Torri Jacobsen - Buying or selling a home doesn’t have to be hard, but choosing the right Realtor DOES make a difference. I specialize in making first-time home buying a great experience for military families moving to the Charleston, SC area. Call or email today, and let’s make this your best move yet! You’ll feel right at home with me.