As you drive around the greater Sacramento area you can’t help but notice…builders are building again. A lot (pun intended). Beautiful brand new homes calling out to you as you drive by, the sales office flags blowing in the breeze waiving you in. What do you do? Do you call your Realtor or just stop in? This is a great question. Most people think that when purchasing a brand new home there is no need to use an agent.  “What’s the point? The price is the price, there is no negotiating but maybe they will offer me a discount if I don’t use a Realtor.” These are all common misconceptions that can end up costing you.

I could ask, “Would you go to court without representation from an attorney”, “Would you perform your own appendectomy”, or a dozen other cliché sayings but I think you know what I’m getting at. It doesn’t make sense to make such an important decision without representation from a real estate professional. Especially when their services are at no cost to you and it is YOUR best interest that they have in mind.  As friendly and helpful the sales person in the office may be, and even though they know ALL the best upgrades you should purchase, they are there to represent the builder and the builder’s interests, not yours. Builders will compensate the agent representing you but they will not pass along any savings to you for not using a Realtor. This cost is built into their marketing fund so you might as well take advantage of it and ensure you have someone looking out for you.  You will not only have your Realtor at your side for the initial visit but throughout all phases of the process (contract negotiations, construction, various walkthroughs, and closing) to answer questions and give insight.

Loan: Builders typically offer some form of incentive for using their in-house lender. Are these incentives as good as they seem? Are there additional fees involved that end up reducing the true value of the incentive offered? It helps to have a Realtor with a mortgage background to ask all of the right questions and to look over the costs associated with the loan. 

Upgrades: Is the builder including any upgrades with the purchase? Is that the most they can give you? While the $75,000 in upgrades that the sales person has shown you will make your new home the most fabulous home in the development, maybe that is not the best way to invest your money. It’s wonderful to have the nicest home around but that also means you will probably not get the best return on your money when it comes time to sell. An experienced Realtor can help you determine if certain upgrades are going to be worth it for you.

Purchase Price: The sales representative will always give the appearance that sales prices are non-negotiable. This is not the case.  There are many factors that come into play when negotiating a new home sale; What phase is the builder in? Is there any standing inventory? Has a buyer picked out upgrades and then cancelled after the builder has already installed them? If the sales representative accepts your deposit and submits your offer the home is locked up in negotiations until you come to an agreement or move on so it doesn't hurt to ask for a lower price. There are times when a subdivision is in such high demand that there is a waiting list and the builder will just hold firm on the price. You may never know without a Realtor to represent you.

Construction: Typically new homes will come with a 1 year “Fit and Finish” warranty as well as a 10 year structural warranty. Be sure to confirm this with the builder’s representative and make sure you have this in writing. Rather than being reactive and hoping that if something goes wrong you will still be within your warranty period, it is in your best interest to perform your own inspection. Many home inspectors will offer a special rate on new construction homes and it can end up saving you a lot of money. I suggest having a home inspection done right before your 1 year “Fit and Finish” warranty is up. This will ensure you have time to have any issues corrected by the builder before they become your responsibility.

The point of this blog is not to make the builder or their sales representatives out to be bad people or seem like they are out to get you. I have worked with many wonderful people in new home sales throughout my career.  The point of this is to educate the consumer, let them know that it is definitely in their best interest to take advantage of a free service that will greatly benefit them and also enhance their buying experience. So when you are considering purchasing a brand new home from a builder, be sure to take your Realtor with you.