Buying Brand New Homes … and Chess

In Buyers by Doug PhelpsLeave a Comment

Imagine – you are back in high school and that you play chess about once a year.  A nerdy guy asks you if you want to play a “quick” game.  It just so happens that behind those pimples, thick-rimmed glasses, and pocket protector is the president of the school’s chess club.

How’s that game going to work out for you? Not good.

This is the situation that often exists if you are thinking about buying a new construction home.

Don’t get me wrong.  You can walk into some model homes and deal with the builder directly. The on-site salesperson and the main office executive staff behind him or her are real estate experts for the builder.  New home builders and their staff are good people, by and large.

They also know how the game is played, and have the upper hand. They are kind of like the president of your high school chess club and you are like the occasional chess player.  They are the Seller and you are the Buyer.  As a Seller, they have very different objectives and agendas.  It is just the nature of the transaction.

Why is this important?  One of the issues in our current market is a relatively low inventory of resale homes available.  New home building is picking up after several years of being pretty slow.  It is more likely now than in the recent past that a new home may be the right choice for your next home.  You may need to play that game of chess.

If you are going to play the new home buying game, it is wise to have someone equally skilled as the builder’s people to help look out for your best interests.  You see, as a Seller, a builder does not have to use the standard buy/sell agreement that is used for a resale home.  They create their own, which can make for a very uncomfortable game.

Real estate agents can help you with a new home purchase in the exact same way that we help you with the purchase of a resale home.  And the best part: there is no additional cost to you.

Years ago, the home builders and the real estate community in metro Denver got together and forged a joint marketing agreement. Builders realized that it was in their best interests to work cooperatively with the real estate brokers.  At the same time, brokers realized that they’d be able to provide better service by being able to offer the new home option to their clients.

This created a true win-win-WIN.  Builders got access to a larger market and brokers got additional options for their buyers.  Builders agreed to compensate brokers and to not have a “two-tiered market” … that is, they don’t charge different prices to buyers working with an agent versus those working without an agent.  Buyers get the expertise they need with these sometimes complex transactions by being able to have an agent by their side representing their best interests.

Now this is IMPORTANT … part of the joint marketing agreement is that your agent is supposed to accompany you to the new home builder’s site on the first visit.  Alternately, most builders are fine with you telling them on your first visit that you have an agent you want to use.  If you don’t say something at the first opportunity, you can lose your option to have representation.  Not good in this game of chess.

Preserve your rights to have an agent assist you and represent your best interests.  Talk with your agent prior to visiting new homes; the agent can give you some business cards and you can hand these to the on-site salesperson when you first visit.

Don’t go into the new-home-buying “chess game” without an experienced player on your side. A good agent can help YOU walk away from closing saying, “Checkmate.”

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