Buying new home question

[thinkerbell]

We have looked at a new home. It is a new build so we have only talked to the representing realtor. It is a townhome so the realty company is representing the builder on all of them. We have worked with a realtor in selling my mil’s house and really like her. We were just wondering about something and would like y’all’s input/opinions. In making an offer on this new house, would it be better to have our realtor to help us in negotiating or would they likely negotiate better if we didn’t have a realtor involved? Not sure what we are going to do. We did have a realtor when we bought the townhome we are currently in and it was pretty much the same scenario. Pros/cons?

 

[easyas123]

I can't help you exactly...we are in the opposite position. We have a lot we were going to list. Next thing you know the agent we were using was like "hey, if I market it as a to be built new construction and partner with a contractor, this may sell faster". So we thought we'd give it a try. Honestly, we are ok it if doesn't sell. It's not on the market yet and she's already got someone who wants to see the lot tomorrow.
She's explained the whole process to us and from our point of view it's pretty easy, as the seller. Anyway, my point is from our end of the deal the realtor is taking care of everything for us.
Good luck to you with everything.

 

[china mom]

I would always recommend having a realtor to assist you in writing the purchase contract but some new builds do not include a commission for a buyers agent so they could require you to pay your realtor out of your funds. Maybe discuss this with a realtor and see if they offer a reasonable fee for acting as a buyer agent.

But whatever you do, DO NOT forgo an inspection. A lot of people assume that they don't need one for a new build but, personally, that is when I think you need it most. You would not believe the things inspectors find wrong with new construction.

 

[RoseGold]

Go find something the builder built many years ago and knock on the door. Ask if they would buy from the builder.

 

[china mom]

Go find something the builder built many years ago and knock on the door. Ask if they would buy from the builder.

Really good idea.

 

[easyas123]

But whatever you do, DO NOT forgo an inspection. A lot of people assume that they don't need one for a new build but, personally, that is when I think you need it most. You would not believe the things inspectors find wrong with new construction.

This 1000%.

 

[thinkerbell]

I would always recommend having a realtor to assist you in writing the purchase contract but some new builds do not include a commission for a buyers agent so they could require you to pay your realtor out of your funds. Maybe discuss this with a realtor and see if they offer a reasonable fee for acting as a buyer agent.

But whatever you do, DO NOT forgo an inspection. A lot of people assume that they don't need one for a new build but, personally, that is when I think you need it most. You would not believe the things inspectors find wrong with new construction.

We will definitely be getting it inspected.

 

[tvguy]

I would always recommend having a realtor to assist you in writing the purchase contract but some new builds do not include a commission for a buyers agent so they could require you to pay your realtor out of your funds. Maybe discuss this with a realtor and see if they offer a reasonable fee for acting as a buyer agent.

But whatever you do, DO NOT forgo an inspection. A lot of people assume that they don't need one for a new build but, personally, that is when I think you need it most. You would not believe the things inspectors find wrong with new construction.

Good information. Although I think I would not make an offer on a property if the seller was not paying a commission to the buyers agent. While perfectly legal, it sure sounds shady to me.

 

[Mackenzie Click-Mickelson]

We bought a new build in 2014 but we had it built for us. We used a buyer's agent (who also sells homes) and in my state if you use one you have to disclose this when purchasing a home. The commission was split between the realty company the developer was using and our buyer's agent. The commission cost was set by the realty company the developer was using, it was 6% so 3% went to our buyer's agent. There was no cost to us to use a buyer's agent.

What negotiating are you looking at for a new build? Ones around here once it's finished you don't really have negotiating power all that much, it's when it's still being built that you can adjust things the most.

 

[Lumpy1106]

I would always recommend having a realtor to assist you in writing the purchase contract but some new builds do not include a commission for a buyers agent so they could require you to pay your realtor out of your funds. Maybe discuss this with a realtor and see if they offer a reasonable fee for acting as a buyer agent.

But whatever you do, DO NOT forgo an inspection. A lot of people assume that they don't need one for a new build but, personally, that is when I think you need it most. You would not believe the things inspectors find wrong with new construction.

So true. I worked for an Engineering firm that designed tract homes for a short while. They typically build the models first and the Engineer does a walk-through of those units ONLY. Anything they find gets listed as fix-it items on all units built after that. There is no follow-up from the Engineer.

I've been on Union sites where the crew was paid for training and the work was impeccable.
I've been on non-union sites where the guy nailing the sheeting was just handed the nail gun an hour previous and he had no idea what he was doing.
Guess which crew typically works on tract homes?

Get a look at the site DURING construction if at all possible. Sites with crews that respect their superintendents are clean and pride is taken in the work. Sites with crews that DO NOT respect their superintendents have graffiti on the walls and trash on the floor. The next trade is going to cover the work anyway so who cares, right?

Just a few tips you won't hear from your realtor...

 

[mikehn]

Get your own agent. Doesnt cost you anything. Your agent is going to have more leverage no matter what. Matter of fact you can OFTEN negotiate a share/rebate of your agents commission. Because you've already done all their heavy lifting. You are basically giving them a sale on a silver platter. They are just coming in to scoop up the commission, which you can and should share in.

 

[thinkerbell]

What negotiating are you looking at for a new build? Ones around here once it's finished you don't really have negotiating power all that much, it's when it's still being built that you can adjust things the most.

We aren’t positive yet what we would ask for. Right now, they only have one street done. One side of the street backs up to an older neighborhood and there is a fence behind them. Evidently those aren’t selling as fast because they are offering a couple of incentives to buy on that side. I think it is that they will pay the $1250 fee (can’t remember what it is called) and they will pay/waive your HOA dues until Dec. 2024, and seems like there was one more thing. This makes us feel like we might have a little wiggle/negotiation room. The one we want is not on that side.
They haven’t floored the bedrooms yet. Carpeting is included in the price. The rest of the house is floored in the luxury vinyl that looks like wood planks. We would prefer to have that in all of the bedrooms as well but that is an upgrade. We would also prefer different appliances. We asked if we got our own what would we get towards the appliances and they said $1000. That isn’t very much. Refrigerator is also not included in home price. Those are some things we are thinking about but we know we can’t ask for all of it. We are thinking about maybe just the flooring upgrade to be included in the price.

 

[thinkerbell]

Ok. I am convinced that we need an agent. My husband was already going that direction because he had suggested it to me before I posted. I was the one on the fence.
Next question… we are moving about an hour away from where we are now. We really like the realtor we have been working with on mil’s house. We used her when moving mil into the house and are now using her to sell the house. Would you check with her on representing you in this new home, an hour away, or would you get someone more local? We see pros and cons both ways. We really trust her and would love to give her the business. But, a realtor down there would know more about the builder and our negotiation power, and they would be close so they would hopefully be more available. We don’t really need them because of them knowing the area because we have lived there before. As a matter of fact, the new townhome neighborhood is right near the neighborhood we used to live in. Also, both of our children live in this town. I know it is personal preference. Just wanted to hear other’s thoughts.

 

[rwdavis2]

Zillow usually tells you what the buyer’s agent commission is, if any.

 

[Mackenzie Click-Mickelson]

We aren’t positive yet what we would ask for. Right now, they only have one street done. One side of the street backs up to an older neighborhood and there is a fence behind them. Evidently those aren’t selling as fast because they are offering a couple of incentives to buy on that side. I think it is that they will pay the $1250 fee (can’t remember what it is called) and they will pay/waive your HOA dues until Dec. 2024, and seems like there was one more thing. This makes us feel like we might have a little wiggle/negotiation room. The one we want is not on that side.
They haven’t floored the bedrooms yet. Carpeting is included in the price. The rest of the house is floored in the luxury vinyl that looks like wood planks. We would prefer to have that in all of the bedrooms as well but that is an upgrade. We would also prefer different appliances. We asked if we got our own what would we get towards the appliances and they said $1000. That isn’t very much. Refrigerator is also not included in home price. Those are some things we are thinking about but we know we can’t ask for all of it. We are thinking about maybe just the flooring upgrade to be included in the price.

A fridge wasn't included in our appliance package either, it's not common for it to be included here on a fully complete home either. I've only seen it where it's a high end fridge which then of course is reflected in the purchase price.

What we ended up doing in our kitchen because we actually prefer black appliances is we ended up with leftover money in the appliance allowance and specifically put in the contract that we could float that money elsewhere. What we did with the leftover money was upgraded the main level bathroom lighting fixture. I agree $1K is not much at all for appliances if bought on your own especially these days. TBH the appliance package we had wouldn't have fully covered it back then if you wanted all stainless steel appliances. Although some of ours was eaten up even with black appliances because we wanted a gas range and stove (which we paid for a gas line in the kitchen).

I would check on some reasons why that other side may not be selling, things like site conditions, is the backyard much smaller for that townhome, etc. I could see being right by another neighborhood impacting that as well just thinking there could also be other reasons why they are more willing to nudge on the price and offer incentives for that particular side.

Hmm..from your list maybe the vinyl flooring you want in the bedrooms could be something to negotiate on, I'd still expect to pay an upgrade but maybe they'd be willing to knock a bit off that price.

Random thing we learned when you do an inspection I would suggest going around to the outlets especially if you have ones that are at an exterior wall (so front and back as well as sides if the unit is on the outer part). Our rental house we lived in in 2013-2014 had been built in 2006 by Pulte Homes (so it was a new enough house) and was not built the best. We had air coming through the outlet in the master bedroom as an example. We would have never thought to think about that until we experienced it. When we went to have our house built the builder for our house just does as a normal thing spray installation on the outlets which in part will help on energy efficiency. (Side note Pulte Homes left our metro during/after the Recession)

 

[china mom]

I am sure you have figured this out by now but just to mention it, new builds rarely negotiate price, rather prefer to provide incentives and upgrades. If they reduce the price on your house, that sets the comps and they will have to keep chasing that price. Negotiate on upgrades, paying the HOA fee and such. Those things don't get recorded in the deed so they can still claim the original price as the sale price.

And to answer your question about the realtor... using a local realtor is very important if you are choosing a neighborhood since they know the area. Not so much in your case since you have already chosen the neighborhood. I would go with someone who I trust over someone I don't know but who knows the area.

 

[thinkerbell]

A fridge wasn't included in our appliance package either, it's not common for it to be included here on a fully complete home either. I've only seen it where it's a high end fridge which then of course is reflected in the purchase price.

What we ended up doing in our kitchen because we actually prefer black appliances is we ended up with leftover money in the appliance allowance and specifically put in the contract that we could float that money elsewhere. What we did with the leftover money was upgraded the main level bathroom lighting fixture. I agree $1K is not much at all for appliances if bought on your own especially these days. TBH the appliance package we had wouldn't have fully covered it back then if you wanted all stainless steel appliances. Although some of ours was eaten up even with black appliances because we wanted a gas range and stove (which we paid for a gas line in the kitchen).

I would check on some reasons why that other side may not be selling, things like site conditions, is the backyard much smaller for that townhome, etc. I could see being right by another neighborhood impacting that as well just thinking there could also be other reasons why they are more willing to nudge on the price and offer incentives for that particular side.

Hmm..from your list maybe the vinyl flooring you want in the bedrooms could be something to negotiate on, I'd still expect to pay an upgrade but maybe they'd be willing to knock a bit off that price.

Random thing we learned when you do an inspection I would suggest going around to the outlets especially if you have ones that are at an exterior wall (so front and back as well as sides if the unit is on the outer part). Our rental house we lived in in 2013-2014 had been built in 2006 by Pulte Homes (so it was a new enough house) and was not built the best. We had air coming through the outlet in the master bedroom as an example. We would have never thought to think about that until we experienced it. When we went to have our house built the builder for our house just does as a normal thing spray installation on the outlets which in part will help on energy efficiency. (Side note Pulte Homes left our metro during/after the Recession)

The other side isn’t selling well because of what is behind the fence. Behind the model home, there is an old block building that has been left sitting so long that the roof is caving in. Not something you want to see out of your bedroom window, and the dilapidated roof is very visible because it is right behind the fence. Even the realtor said if she was the builder she would have offered to put a new roof on it for the current home owners, and she is working for him. The other houses behind that fence aren’t that bad but still not really something you want in your backyard. Those are the reasons we didn’t want them. The back yards aren’t going to be very big anywhere in the neighborhood. In the one we are interested in, we would eventually have the back of another one fairly close.
I would have never even thought about air coming in through the outlets. How does that even happen?? Adding that to our list of things to check.

 

[thinkerbell]

I am sure you have figured this out by now but just to mention it, new builds rarely negotiate price, rather prefer to provide incentives and upgrades. If they reduce the price on your house, that sets the comps and they will have to keep chasing that price. Negotiate on upgrades, paying the HOA fee and such. Those things don't get recorded in the deed so they can still claim the original price as the sale price.

And to answer your question about the realtor... using a local realtor is very important if you are choosing a neighborhood since they know the area. Not so much in your case since you have already chosen the neighborhood. I would go with someone who I trust over someone I don't know but who knows the area.

Yes, we have looked at what the others have sold for and they are selling at asking price. Makes sense that they won’t go down on price because that does set a new precedence.

 

[Christine]

When I bougt a new build (many homes in a neighborhood being built by one builder), the price was non-negotiable. Sometimes they had "special" where if you bought by XX date, they'd throw in upgrade cabinets or something but we could not ask for a lower price. If the commission is 6% to the realtor, then the realtor selling for the builder will get that (less a broker fee). If you show up with your own realtor, that commission should be split. But generally you get nothing out of it. There was one place I went that did throw in extra if you came without your own realtor. This applied to new builds only.

 

[tink2424]

I would always recommend having a realtor to assist you in writing the purchase contract but some new builds do not include a commission for a buyers agent so they could require you to pay your realtor out of your funds. Maybe discuss this with a realtor and see if they offer a reasonable fee for acting as a buyer agent.

But whatever you do, DO NOT forgo an inspection. A lot of people assume that they don't need one for a new build but, personally, that is when I think you need it most. You would not believe the things inspectors find wrong with new construction.

I second the inspection but what my realtor suggested was to do the inspection a few months prior to the home warranty being up (which was 1 year from the date of sale) so that is what I did. It gives you some time to live in the house and make a list of the issues and then to list what is found in the inspection report.

Luckily my inspection report was really good so I had only a few minor fixes on my list.