by Jo-Anne LaBuda

Once again, I'd like to talk about how to avoid "headaches" when you purchase a home, especially a new-build.

Many folks assume that they don't need a Realtor when buying a new-build.  After all, they know what they are looking for and there is usually a Builder's Representative available at a model who will answer questions, refer you to a lender (in many cases the builder) and go through the list of amenities and upgrades.  Unfortunately, this person is usually NOT a state-licensed person and is an employee of the builder.  If he or she is a licensed real estate agent, which is rare, his fiduciary responsibility is to the seller or builder.  He is a sales person who is looking to make a sale for his employer, himself and/or his client, the builder.  He is not looking out for your interests in matters such as financing options, cost of the property or eventual resale.

Today's real estate market is partly the result of too many new-builds being built, too many people paying too much for these new-builds, and too many folks purchasing prior to seeing what the market would bear before selling their current residence.  The result has been a high inventory of resales, a hurried atmosphere as far as getting the current property ready to market, prices of resales going down and -- in cases where the buyers get transfered or have to move within a couple of years -- the owners have to bring money to the closing table.

When you are ready to look for a new home, either resale or new-build, here are the steps I would advise you to take:

1.  Consult a Realtor about market conditions, timing of putting your current residence on the market, conditioning and staging, pricing and projected length of time it will take to sell the property.

2.  Review with your Realtor the things you are looking for and the reasons for your decision to move.

3.  Talk with a recommended lender about your financing options.  (Have your Realtor recommend a mortgage lender.)  There are literally thousands of mortgage lenders -- some excellent and many far from excellent.If you are paying cash, speak with your accountant about the tax ramifications.

4.  If you decide to purchase a home (a good Realtor may very well talk you out of moving) have your Realtor set you up on a "search" for the type of property that will fit your needs, whether that would be new-builds, resales, investment properties or any combination of these.

5.  Visit various properties with your Realtor and ask her to point out the positivites and negatives of each property, including any deficiencies in the property that could affect resale or your lifestyle. 

6.  Put your current property on the market on a timeline most advantageous to you.

Remember, a Realtor has a legal fiduciary responsibility to look out for your best interests.  He or she should also be experienced, be familiar with the local builders' reputations and history and know the inventory of homes in order to find the best home for you.

It's fun to go out and look at open houses or builder's models on a Sunday afternoon.  Choose your Realtor before you go so you can mention their name when you attend open houses or tour model homes.  That way, when you do narrow down your search, you have representation.  It doesn't cost you a penny more to be represented by a Realtor and if will probably save you much, much more than a penny!

Note:

  • Real estate agents are agents who are licensed by the state to work with buyers and sellers in the purchase and/or sale of real estate.
  • Realtors are real estate agents who are licensed by the state, are members of the National Association of Realtors, and are bound by a Canon of Ethics to their clients.
  • All Realtors are real estate agents.  All real estate agents are not Realtors.  Make sure you are working with a Realtor.