New Construction Home Buying Process: “How REALTORS® Can Help”
As a real estate agent representing buyers in new construction transactions, there are several ways you can add value to your client’s experience.
Here are six ways a real estate agent can help new construction buyers:
1. Knowledge of the market.
Leverage your deep knowledge of the local market and can help potential buyers understand all the information they need to make an informed decision.
Arm your buyers with information on things like new construction developments, expected resale value, and the pros and cons of different communities. Having this deep understanding of the market can make you a valuable asset to any potential buyer.
2. Flex your negotiation skills.
New construction buyers might not realize that they can negotiate with the builder on price, upgrades, and other terms. A skilled real estate agent can help buyers save money and get more for their investments.
In many cases, the builder will be willing to negotiate prices, upgrades, and other terms to secure a sale. As a skilled real estate agent, you will be familiar with the builder’s typical practices and can help buyers get the best possible deal.
In some cases, the builder may be willing to provide significant discounts or upgrades if the buyer is willing to sign a contract quickly. An experienced real estate agent can help buyers navigate these negotiations and get the best possible terms.
3. Assist with complex contracts and financing.
New construction contracts can be complex and overwhelming for buyers. A real estate agent can help explain the terms, review the contract for any red flags, and negotiate on behalf of the buyer. This can be an invaluable service for new construction buyers who may not be familiar with all the ins and outs of construction contracts. In addition, a real estate agent can help navigate the often-complex world of construction financing.
Obtaining financing for a new construction can be difficult, as most lenders are unwilling to take on the risk. Consider working with Embrace Home Loans®. Working together, we can help more buyers achieve their financial goals while growing your business.
New Construction Loans
- Approved to Move: Negotiate like a cash buyer
- Home financing to meet your specific needs
- Personal guidance throughout the process of buying a new construction home
- Condo expertise in-house project approvals
- Extend Rate Lock: to keep your rate safe and secure for up to 360 days
- Jumbo by Embrace: As little as 10% and 20% down for loans up to $2M and $3M, respectively
With our dedicated team along with our builder appraisal panel, non-warrantable capabilities, and the ability to provide long-term rate lock protection, you won’t have to worry about approvals falling through.
We can also support your marketing needs, driving increased traffic and sales in your community.
4. Leverage your home builder relationships.
A real estate agent with experience working with new construction builders can leverage their relationship to negotiate better terms and a smoother transaction for the buyer. The agent can use their knowledge of the builder’s process and timeline to advocate on the buyer’s behalf and ensure that any concerns are addressed.
The agent can also help the buyer navigate the often-complex process of purchasing a new construction home and ensure that they are getting the best possible deal.
Light on the builder relationships?
Look up online reviews and ratings, and consider talking to other agents about their experiences with local builders. The more you know about a builder, the better you can inform your clients.
5. Set realistic expectations and educate your clients.
No two homebuying experiences are alike, but most follow a similar trajectory: finding the right property, negotiating a fair price, and then going through the process of financing, inspections, and closing.
The new construction home buying process can be long and complicated for many buyers, especially first-time buyers. A knowledgeable real estate agent can help buyers navigate the process, coordinate with the builder, and ensure that deadlines are met.
New Build Home Buying Process
While most steps for buying a new construction are similar to buying a pre-existing home, below are a few slight differences. Here is what the process will typically look like when buying a new construction home.
The first step in the process for buying a new construction home is finding the right land.
The location of the land will impact the cost of the home, the commute to work, the quality of schools in the area, and more.
Once you’ve found the perfect location, you’ll need to negotiate a fair price with the seller.
Pre-Purchase: Key Steps
- Prior to signing – bring your own agent with you
- Choose your home site location, model and upgrades
- Negotiate and sign the contract
Post Purchase: Example Timeline
- Day 0: Sign the contract
- Days 1-2: Deliver earnest money to escrow.
- Days 3-5: Apply for a loan.
- Days 0-21: Conduct a design review to make any customization/design/option selections for the home. Additional deposits will also be due at the time of selection.
- Days +/- 30: Loan approval
- Months 3-6: Close on your home. Timing depends on when the home construction is complete. This timeline varies and can also change and be extended depending on the weather, supply of materials, etc. Most builders reserve the right to extend up to 2 years.
6. Provide post-closing support.
The relationship between a real estate agent and their client doesn’t end at the closing table.
A good agent will continue to offer support and guidance to their buyers after the transaction is complete. This post-closing support is crucial to maintaining a good relationship with clients and ensuring they are satisfied with their purchase.
Buyers may have questions about their new home, how to best take care of it, or they may run into problems that they need help solving. A good agent will offer guidance and support, helping their clients navigate the sometimes-difficult world of homeownership.
This post-closing support is one more way a good agent can add value for their clients.
The bottom line about new construction buyers
In conclusion, as a real estate agent, you are a very important part of the new build house-buying process. You can provide valuable resources and expertise that can help buyers navigate the complexities of purchasing a new home.
This will not only save them time and money but will also ensure that they make informed decisions along the way. You understand the financing options available; you can assist in negotiating offers and contracts and provide advice on factors such as location, design, and construction quality.
These 6 steps can help ensure buyers enjoy a smoother, less stressful home buying experience that ultimately results in finding the perfect new construction home.