Thinking of building a new home in Goodyear, Arizona or the surrounding communities? The new home builders in the west valley are breaking dirt once again at very fast speeds, and you’ll want to read this before you start visiting model homes or talking to custom builders. We often speak to people who are unsure why they should consult a real estate agent prior to visiting model home and talking with the new home builders’ agents. They often think it will cost them more money to use an agent of their choice, or they just don’t see the point in working with an agent who is not employed by the builder. There are also some misconceptions regarding commissions – some potential new home construction buyers have been told that the builder will give them an “incentive” or the purchase price will be lower if they do not use outside representation. This is simply not true in most cases. Here are 6 reasons you may want to consider using a real estate agent of your choice when building your new home.
(1) Builder reputation.
Nobody knows the craftsmanship and dependability of a builder better than a realtor. Here’s why. Typically, experienced realtors have sold an individual builder’s product several times, and it’s common for an experienced realtor to sell the same house twice. This allows a realtor to examine how well the product of a builder survives the warranty period and beyond. A realtor can share the insight from scores of homeowners who have explained how well they were treated by the builder while the warranty period required repairs to be addressed by customer service crews employed by the builder. The realtor can also provide a timeline of any habitual problems that occur in a home built by known builders in a given area.
(2) Experience counts.
Experienced realtors will agree the most important addendum in a builder’s contract is the standard features page. It is the page which describes the minimum level of building materials to be used in the completion of your new home. Many builders will attempt to complete a contract package without having the standard features written into the contract, and agreed by signatures. Under no circumstances should you have a home built until there is a legal agreement signed which describes the material used by all tradesmen who work on your home. In Arizona, courts presiding over real estate matters will not recognize any agreement unless it is in writing. Verbal agreements, and seller handshakes with a verbal promise are meaningless, and should be avoided 100% of the time. Professional building companies know better than conducting business with a slap on the back accompanied by a promise. If it occurs during contract negotiations it’s a meaningless gesture. After signing a contract on a home, there are several inspections that should be available to the future homeowner, and their agent. These inspections will insure the standard features (including upgrades) have been installed as agreed upon by contract.
(3) Industry Inspections.
An experienced realtor will advise you not to sign a contract without written agreements to inspections made available to you during certain build-out points. Standards in the building industry should allow a home-to-be-built purchaser to have blueprints inspected and initialed as part of the contract package, as well as site plans. Physical inspections should include a site inspection (including the approval of house location), framing inspection, pre-drywall inspection for approval of outlet locations and any special wiring agreements, trade inspections, initial and final walk through inspections. The likelihood of the use of change orders during the inspection process is another reason for utilizing a realtor. Attempt to use the services of a realtor with a background in residential building, or new home sales to accompany you during these inspections. If not represented by a realtor, hire a home inspector (Class ‘A’ contractors offering these services are your best option) to examine the workmanship of your home. The local jurisdiction where your home is built will conduct several coordinated inspections with the site superintendent after all building permits are issued. These inspections are only to satisfy building code requirements. They often do not address craftmanship standards.
An experienced realtor with a resume as a top producer will have a reliable network of lenders with various loan programs which best meet their clients needs. Larger builders will require purchasers to prequalify with preferred lenders (which the builder has part or complete ownership) who are trying to capture your business. This is an acceptable practice by the builder as he determines if a potential buyer is credit worthy enough to enter into an agreement. Using a lender the building company trust in the pre-qualification process is standard practice. Additionally, there are often incentives given by the builder for using a preferred lender such as closing cost assistance and/or upgrade options for financing the home. But buyer beware. There are often hidden fees with many builder’s lenders, as well as points associated with these loans. In many cases the loan option by the preferred lender is offered at a higher rate. An agent can review your financing package, and have their network of accomplished lenders attempt to find a financing program which provides greater financial benefit.
(5) Appraisal process.
Usually, the representatives of the building company will communicate with the appraiser assigned by the mortgage company handling the home loan. This is done at the request of the appraiser in order to obtain information on closed properties which were used as a comparison to arrive at the contract price. These comparable properties are usually built by the seller in the same subdivision, and aren’t usually a true indicator of market value. If the contract price is higher than the appraisal results, the buyer will usually be required by builder contract to pay for the difference at the closing table. This is usually an impossible task for most purchasers since the required down payment made when entering into a contract usually drains all available funds of the buyer. The Kortright Group has successfully communicated with lenders on behalf of many clients who were caught in this trap by searching and finding a second set of properties to use for comparison pricing which are not a product of the subject builder.
You need the eyes of an experienced agent to review the HUD1 (settlement statement). Before our clients go to closing we review the HUD1 to make sure it outlines the good faith estimate. A realtor will maintain contact with the lender to make sure all documents needed for a completed loan package are forwarded. Communication will also continue with the builder to make sure all change order requirements are completed. Additionally, the title agency will work directly with the realtor to get possession of all outstanding documents from the buyer necessary for a successful closing to include a completed loan package.
Note: Todd Kortright was recognized by Newland Communities as one of the top agents in Estrella representing buyers on new construction home purchases in 2012. Over the course of his real estate career, he has represented more than 20+ clients in new construction transactions in Estrella, Goodyear, and throughout the west valley of Phoenix. If you would like a no-cost, no pressure consultation, call Todd at (623) 256-7949 or email at firstname.lastname@example.org. He can help with any questions you have regarding new home building (custom or model) and market trends in Goodyear and Estrella Mountain Ranch and throughout the West Valley. We can also arrange a new construction home tour for you in Goodyear, Buckeye, Surprise, Waddell or any Maricopa County community of your choice.