Patty Manzi’s Tri-Valley Real Estate Blog

I’m often asked the question:  Why should I use a real estate agent to purchase a brand new home?

The advantages of having an agent help you purchase a newly constructed home are the same as those for purchasing a resale home…..knowledge of the market, help in finding the perfect home quickly, expertise in contract writing/negotiation, and closing assistance.  The builder has a professional representative watching our for his needs, and you need the same expert representation.

Buying a new home is a little more difficult and time-consuming that buying resale.  A real estate agent can professionally guide you through this process.  A real estate agent has experience working with builders, and can help you research loan programs that will best suit you.  A real estate agent  can also guide you through the  new home warranties and builders purchase contracts. 

It is very important that your interests be professionally represented when you are entering into a contract for a semi-custom, or build-to-suit home.  These transactions are complex and the contract details must be exact in order to protect you and to ensure you get exactly the home you want!

Is there any advantage to not using an Agent to purchase an brand new home?  NO!

Think of planning a trip around the world without the help of a travel agent, or buying insurance for your car without an insurance agent.  What if you were the  executive of a major corporation involved in a legal dispute, would you represent yourself in court?  If you depend on people in the service industry for travel needs, insurance claims for a car accident, or handling legal affairs, then why would you want to represent yourself in the most expensive and probably the most important purchase of your lifetime – your new home?

It is a common misconception that buying a home directly from the builder, without the help of an Agent, will save you money.  There is no financial advantage for you to buy directly from the builder.  Builders, for the most part, have a ’single-price’ policy, meaning you will be charged the same price whether your interests are represented by an Agent or not.  Just as in resale, the Seller pays your Agent’s fee.

REMEMBER though, the Builder requires that your Agent accompany you on your first visit to the Builder’s sales office, or they will NOT PAY your representative’s fee.

When you are considering purchasing a brand new home, there are several questions you should ask before you commit to the purchase:

• Is this a good builder?
• Does this builder have a solid reputation?
• How many years has this builder been in business?
• How does the quality of this builders product compare to that of other builders?
• What are the existing inventories of the various builders?
• How do the builders models meet your needs (floor plan, square footage, location)?
• If I should sell in a few years, what upgrades are available now that I can include to be competitive?

Your Agent will be able to help you research many of these question and it is well worth the time to do so.  Taking these precautions will help to assure you the best service and expertise in making this important decision.

Choosing the right neighborhood is almost as important as choosing the right house!  There are many factors to consider when selecting a neighborhood that is right for you.  Below are just a few of the many factors – You may think of others that are important to you.  Please write them on your ‘requirements’ list so they are not forgotten.

Neighborhoods have characteristic personalities.  Investigate to determine that the neighborhood in which you choose to look for a home matches your lifestyle and personality.

Scout out the Neighborhood! 

It is important that you scout the neighborhood in person.  You live in more than your house.  Talk to people who live in the area.  Drive through the entire area at different times of the day, morning, afternoon, evening, and late at night, go during the week as well as weekends.  Look carefully at how well other homes in the area are being maintained; are they painted, are the yards well cared for; are parked cars in good condition; etc.

Neighborhood Factors to Consider

Look for things like access to major thoroughfares, highways, and shopping.  Listen for noise created by commerce, roads, railways, public areas, schools, etc.  Smell the air for adjacent commerce or agriculture.  Check with local, civic, police, fire, and school officials to find information about the area.  Research things like soil and water.  Look at traffic patterns around the area during different times of the day and drive from the area to your place of business.  Is the neighborhood near parks, churches, recreation centers, shopping, theaters, restaurants, public transportation, schools, etc.?  Does the neighborhood belong to a Homeowners Association?

Taking the time to investigate these things before you commit to buying a home can save you some surprises and potentially some disappointments later on down the road.

When you start looking for a home you will find that there are many beautiful homes on the market.  There are a few things I suggest you do before you start looking at homes.  If you do these two simple things, it will make your home touring a more productive process.  You will not waste time looking at things you cannot afford, or that don’t suit your needs.

1. Meet with a lender and find out how much you qualify to spend on a home, and get a pre-approval!  It is very easy to get excited about features found in homes out of your price range.  Before you get your heart set on that big, tree shaded colonial on the hill, your need to pin down how much you can afford.
2. Make a list of “Required Features” vs. “Extra Features”.  For example:  Required features for you might be location, number of bedrooms, eating space, architectural style, garage, school district.  Extra features for you might be a fireplace, walk-in closet, wet bar, pool, siding, vaulted ceilings, deck, landscaping.  There are many different features in homes that range from necessary to luxury. It is easy to get caught up in the excitement of a beautiful home loaded with amenities.  It is important that you select a home that truly meets all of your requirements first and foremost!  Providing this list to your agent can help narrow down the prospective homes that you will tour.  If you are not interested in having a home with a pool, then dont waste time touring homes that do.

Some of the features to note when touring homes:

• Address
• Subdivision name (gated community, HOA)
• What is the home near? (mall, freeway, parks, schools)
• Garage (number of spaces, attached, detached)
• Lot (size, shape, slope, ease of access)
• Style of home
• Bedrooms & Bathrooms
• Living Room
• Fireplace (wood burning, gas, stove insert)
• Kitchen (size, condition, appliances)
• Dining Area
• Laundry area (garage, laundry room)
• Additional rooms (bonus rooms, theater rooms, sun rooms, office/den)
• Additional features (air conditioning, ceiling fans, pool, stairs, french doors, etc)
• Square footage

As you tour homes, check back to this list to make sure the home meets your requirements.  The extras should only come into play when you make your final decision between homes that meet all or most of your requirements.

Here is a brief explanation of the responsibilities of the Buyer’s Agent and Seller’s Agent in a transaction.

In California,Real Estate brokers and their sales persons are required to disclose the type of working relationship they have with the buyers and sellers in a real estate transaction.  There are several types of relationships that are available to you.  You should understand these at the time a broker provides specific assistance to you in buying or selling real estate.  Buyer’s Agent and Seller’s Agent relationships are commonly referred to as ‘agency’ relationships and carry with them legal duties and responsibilities for the broker as well as for the buyer and seller.

Buyers Agent.  A Buyer’s Agent acts solely on behalf of the buyer and owes a fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer.  The agent will negotiate on behalf of, and act as an advocate for the buyer.  The buyer is legally responsible for the actions of the agent when that agent is acting within the scope of the agency.  The agent must disclose to sellers all material facts concerning the buyer’s financial ability to perform the terms of the transaction and whether the buyer intends to occupy the property, but cannot disclose to another party that the Buyer will pay a price greater than the price offered.  A separate written buyer’s agreement is available which sets forth the duties and obligations of the parties.

Sellers Agent.  A Seller’s Agent acts solely on behalf of the Seller and owes a fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller.  The agent will negotiate on behalf of, and act as an advocate for the Seller.  The Seller is legally responsible for the actions of the Agent when that Agent is acting within the scope of the agency.  The Agent must disclose to Buyers or Tenants all adverse material facts about the property known by the Broker.  A separate written listing agreement is required which sets forth the duties and obligations of the parties.

If you are a first-time home-buyer, or a buyer who hasn’t purchased a home in the last 10 years or more, here are some basic guidelines of what to expect during the buying process.

• Find a Realtor® you can trust.  The first step in the home buying process is to find an experienced Realtor® that you can trust, who has a team of professionals in place.  This will help to ensure  that your needs are met professionally and represented throughout the entire process of buying your home.  Ask for, and check references.
• Get Pre-Approved for a Loan.  This is a very important step.  By doing this before looking for a home, you’ll save time, energy, and frustration.  You will know exactly how much home you can afford.
• Look for your dream home.  The next step is to look a various homes.  A good rule of thumb is  to look at no more than 5 houses each time you go out to tour homes, more than that can be overwhelming.  Your agent can give you printouts from the Multiple Listing Service (MLS) with details on the homes you see.  Take notes on all the properties so you can remember later what features you liked or disliked about the homes.  Remember to take notes on the neighborhood as well.
• Your offer.  Be Careful ~ this is a BIG step!  When you find your dream home, you should be prepared to present a competitive offer immediately.  Your agent must  do thorough research and be able to back up your offer with solid data supporting the price and terms  that you choose.
• The Contract.  You’re starting to jog now….When the seller accepts your contract to purchase, you are ‘in escrow’. Your Realtor®, and you, will work as a team to make sure every detail is handled accurately and immediately so the escrow can close properly, and on-time.
• Inspections.  You’re on the “HOME” Stretch!  Inspections are performed to ensure you know everything you can about the home you are buying.  Contract details are further performed and negotiated, and when all tasks are complete – you head to closing!
• Signing the Loan Documents.  Finalizing the Lender’s commitment.  Prior to the closing, you, your lender, your agent, and your title representative will sit down with you to sign your loan documents at the title company.  At this time you will bring your down-payment/closing funds.  After the signing the  lender will send their funds to complete the transaction. 
• Now it’s YOURS!  Then next Step will be into your new home.  After the Deed is recorded, you can pick up your keys and move into your new ‘Home Sweet Home’!

Sound too easy?  Keep in mind that no two home purchases are identical, they all have their own unique set of circumstances and conditions that need to be addressed.  And, yes,  sometimes problems do arise.  Having a professional team in place can help to ensure that all the issues are dealt with in a professional and timely manner.  This experience should be exciting and enjoyable, as well as get you the perfect home with the least amount of hassle!