New Construction

Buying a new home is exciting. You get to build your dream from the ground up, choosing your lot, your model, interior finishes and upgrades. But like any home purchase, buying new construction is serious business, an expensive transaction with many financial implications.

A builder looks at the sale of a new home as a math equation; it’s all about the numbers. They know how much per square foot it costs them to build a standard home. They know how much profit they want to make on each home and they have already accounted for Realtor® costs and most likely closing costs. If you are working with the builder’s agent, any monies left over after these costs will likely be more profit to the builder. However, if you have an agent working for you, they will be able to negotiate with the builder and have that extra money put back into your pocket in the form of upgrades, bonuses or possibly down payment assistance.

Builders want their homes to move quickly. A construction loan works a little bit like this; the bank gives the builder enough money to begin construction on 4 homes at the same time. That builder must sell one of those homes before they will give him/her money to start the next home. If he/she sells 2 of those 4, the bank will release funds for the start of the next 2 more homes, ect. If this is in fact how the builder’s financing works, they are willing to make deals. They don’t want construction to halt for any reason. This is why they give the Texan Realtor® Team incentives because they know we bring a number of qualified buyers to them every month.

Builders are more likely to offer you upgrades on your home as opposed to lowering the price of your home. If they lowered prices for everyone in the subdivision they would be bringing the value of that subdivision down as well. They would much rather keep the value of the homes high and compensate you by offering upgrades. In the end, this benefits you, the builder and the community by maintaining steady housing prices.

That’s why it’s a good idea to obtain representation from a Realtor® when considering a new home purchase. Here’s why:

Builder sales reps represent the builder. Builders have their sales reps on site to answer questions, assist people who walk in, and ultimately help with a purchase. Builder reps provide a valuable service: They can explain differences between models and floor plans and share information about financing options & upgrades. But it’s important to remember that builder reps represent the builder, as they are contractually obligated to do. “The Texan Realtor® Team are trusted resources for real estate information and can help home buyers navigate the increasingly complex home-buying process. “The buyer agency agreement ensures the buyer that his or her Realtor® will represent the interests of the buyer alone and not the seller.”

Fiduciary responsibility. One of the most important considerations for any buyer is fiduciary