Hey everybody, I am Stacey Christopherson with Coldwell Banker and C4 Elite Real Estate Team. The inventory of existing homes is still low here in Northern Utah. What we are finding now are new construction homes popping up all over the place. With so many new homes being built, we are seeing many different builders as well. This means that with all the new builders, there are new contracts, new incentives and confusion for buyers. It is so important for Buyer’s to have representation when talking to Builders about New Construction. Read on to find out why.
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What Does a Buyer’s Agent do?
As with existing homes, every buyer should have their own representation. A Buyer’s agent has a fiduciary duty to their clients to be honest, loyal and keep their best interest in mind. In new construction, the options are endless as to price, location, home layout and finishes. As is the case with each seller, every contract with a builder can vary. Most builders have their own purchase contract, so it is important to have your Buyer’s agent with you to ask and answer questions.
Registering at Model Homes
Model homes are often staffed with Real Estate agents that represent the builder. When consumers walk into the model home without their Buyer’s agent, procuring cause can be an issue. Procuring cause is when an agent brings a buyer to a home that results in a sale. The agents in the model will always ask for your email and phone number. Please know that they are registering you as a buyer and one that is unrepresented. Once you are registered without your Buyer’s Agent, you are no longer represented by the agent of your choice. Your specific Buyer’s agent can no longer help you through the process with this builder.
The best thing to do is to make sure you have several business cards from your agent. When you walk into the model home, tell the agent that you have representation and hand them one of the cards. You will still be registered, however, under your own Buyer’s agent and can move forward knowing someone is looking after your best interest.
Who Pays my Agent?”
We mention in several of our blogs, in Utah, that sellers pay for all real estate commissions. This goes for builders as well. Hiring a Buyer’s Agent to negotiate new construction is free to you as a buyer. If you have a full time, experienced real estate agent from C4 Elite Real Estate Team, we are familiar with several builders in the area. Be sure your agent knows the ins and out of new construction and what questions to ask when meeting with builders. Often, builders have built in incentives for finishing basements or using a preferred lender for a discount in fees. You will not get a cheaper price on new construction if you go in unrepresented. The commissions are already built into the price and the builder’s agent with simply earn double, while you go without someone by your side.
New Construction Prices
One thing to note, is prices on the Multiple Listing Service (MLS) may not be what they seem. When you see the price on the MLS for new construction, you should know that these prices typically are a base price. Ask your agent to call the builders’ agent and ask what standard finishes are and how much upgrades cost. Some builders put granite countertops in as a standard finish, others do not. If you want granite finishes, you will have to pay for them. Each builder has different prices for different finishes. Also, the total square footage is included in the total number, however, most builders do not finish the basements. They will finish them if they buyer wants it done, for a fee. This is usually a $$/square foot figure and can be rolled into the final price.
Builders do not negotiate much on prices. New construction is not the time to go in thinking you will be able to offer lower than list price. The builders have done the math and know what they need to make on each house. You can cut costs by staying with the standard finishes and limiting upgrades.
Budgeting for a New Build
Finally, there are items you need to be sure to budget for when purchasing new construction. Some builders may offer landscaping however, often it is only front yard landscaping. Some builders will landscape the entire yard but, as with basements, a price added to the final cost. Fencing is not part of the new construction contracts either. If you require a yard with a fence, be sure to research costs ahead of time. Blinds and a refrigerator are also the buyer’s responsibility. All of these items can be written in to the contract with the help of your Buyers’ Agent.
We Can Help
Make sure you give C4 Elite Real Estate Team a call. Covering Weber, Davis and Salt Lake County, we are all familiar with local builders. Additionally, we know agents with these builders that we can call directly to get answers to questions you may have. Helping you build or buy your new dream home is our passion!