Buying A New Build? Beware, Get Representation First!

So you have been looking online for homes, going to open houses each weekend and finally the thought enters your mind that you just aren't going to find what you are looking for, unless you build it from the ground up with everything that you want. Before you jump in the car and head down to the local new builders office and sign the paperwork, do yourself a big favor, get a Realtor to represent you! This is more than a good idea, its an absolute necessisty. You need someone who understands how the process works, someone to teach you all the little catches that builders can throw into your contract and most importantly someone who will stand up for your best interests. What most people do not understand in this process is that the builder rep, works for the builder (their boss, their company) and could really care a less about you as a client. A Realtor on the other hand, is hired specifically by you to respresent your best interest only. They will ensure that the builder, the builders lender nor the title company (all linked to the builder) are being honest and not trying to put you into a situation that is not in your best interests. You may or may not know, that almost every new build company out there is tied to their own lender and their own title company, therefore NO ONE is looking out for what is best for you, unless you have hired an agent to do so. Below you will find a real life example of things that have happened recently to a client here in the Columbus Ohio area who purchased a new build (we'll call him Bob), make sure it doesn't happen to you to, hire yourself a real estate agent and get that piece of mind, not to mention it doesn't cost you anything to be represented, all commissions are paid for by the seller.

1. Bob went into contract on a new home and had an appraisal done on it only to find that the home was not worth what the builder was trying to charge him. The builder expected the client to pay the additional money by the way of cash to make up the difference. When Bob explained he did not have the money to do so, the builder tried to raise his interest rate so that they (the builder) could re-coop the money they lost.

2. Bob also discovered that the builder was not going to pay the closing costs associated with the loan (typically in a buyers market, the seller or builder will pay this fee). The builder said that they were not going to allow this and therefore would let a perfectly good buyer walk away over a mere $2,000.00

3. Bob was also told by the sellers title company that he was to receive a certain amount of money back at the closing, which was an incorrect number. The title company did not wait for acceptance of the HUD 1 settlement statement from both the lender and the Realtor before disclosing this incorrect information to the buyer, potentially costing Bob lots of money.

Luckily, Bob was represented by a Realtor and the builder did not get away with any of this. However, had Bob not been properly represented, he would have seriously been taken advantage of. New builds can be great for buyers and you can get a fantastic home for the money, however make sure you have someone to fight for you in your corner first.

Remember, Always consult a Realtor for any home purchase, you owe it to yourself!