Buying and Building New
When you buy a newly built home, there are some special considerations that you need to be aware of. This is different from most existing home sales. Developments are financed and sold differently from existing homes, and builders make their money in a somewhat different fashion.
Using a Realtor Will Save You Money.
If you're not using a Realtor, you should be. Realtors will save you time and money. And the neat thing about this is that they're free. When you use a Realtor to find a home to buy, it's not you who pays the commission—it's the seller or the seller's Realtor who pays it.
A typical commission to sell real estate might be 6 percent of the sales price. On a $150,000 home, that comes to $9,000. If a home shopper drives by a home that is listed for sale and makes an offer that is accepted, the seller of the home will pay the listing agent the $9,000 in real estate commissions.
If a Realtor finds the home for his clients, and an offer is made and is accepted, the listing agent will typically split that $9,000 right down the middle with the Realtor who brought the buyers to the table. You don't pay; the seller pays.
What a deal, right? Where else can you get such valuable service and pay nothing for it?
There are some parts of the country where buyers pay Realtors for certain buyers' services, and in still other areas, builders don't pay Realtors who find buyers anything, but overall, a buyer's Realtor is free. Get one. Because you'll need one.
There are certain performance clauses in new construction, things that say "on such and such a date, this much of the home will be completed" or "at this point, this home will be X percent done," and so on.
Realtors will help you review the deal properly and prepare an offer that both makes sense for you and protects your interests.
If Realtors in your area get commissions from builders, you really are better off getting one.
Be on the alert, however, if your Realtor is showing you mostly new homes and not researching the existing home inventory. Sometimes builders will offer special incentives to Realtors who bring buyers to their houses. This incentive can be more commission, or it can be prizes of some sort. I recall right here in Austin, Texas, a builder had a raffle for a new car, a BMW. Each time a Realtor brought a prospective buyer to that development and the person bought a house there, the Realtor's name would be put in a bowl. At the end of the contest period, the winning Realtor's name was drawn. You need a Realtor to help you find a home and negotiate the contract; just be aware of any special incentives that the Realtor might be getting.