…and how a good real estate agent can help.
It’s no secret that buying a house right now can be a challenge. Inventory is down, prices are up and sellers are firmly in the driver’s seat. For these reasons, and more, many buyers are looking toward new construction as an easier, more reliable path to getting the home they want/need.
Unfortunately, that’s not always the case.
Home builders are, after all, sellers first and foremost. They’re focused on their bottom lines and, to be fair, are faced with some challenges of their own. Supply chain issues, inventory costs/shortages, retaining good workers/employees…these are real issues they have to deal with every day. As such, many builders have had to tweak their normal processes in response to the market. And that means that buyers may have to adjust their expectations, and approach, when trying to purchase a new construction home.
Here’s an abridged list of some of the things we’re seeing home buyers, and their agents, come up against when trying to purchase new construction:
- Requiring that buyers be fully pre-approved with a lender before even providing details on available lots and base prices
- Having buyers “bid” on available lots with a highest & best offer
- Not releasing inventory currently being built (spec homes) in an effort to get the very highest price possible
- Adding an “escalatory clause” to their contracts that allows them to raise the price of the home at their discretion, often under the guise of “increased material costs”
- Cutting back on incentives such as paying some closing costs or giving incentives in the design center
- Paying points to builder-preferred lenders to get rate down, or even charging for 90+ day interest rate locks
- Raising base prices after ever two or three sales
Of course, this is not an exhaustive list. Nor does it reflect the policies of every builder. But these are just a few of the things that are becoming more common in the current market.
As a result, buyers may need to adjust their mindset and approach when purchasing new construction. A few tips:
- Get pre-approved with a lender, or have proof of funds available, before starting your home search
- Be prepared to act quickly when you find a home that meets your needs…in this market, there’s no time to “sleep on it” before making a decision, and there’s always someone right behind you who’s ready and willing to buy
- Know that there will be little room for negotiation, especially on price and upgrades…builders are paying more for materials, and those costs will be passed on to buyers
Lastly, now more than ever it’s important to have a knowledgeable real estate agent on your side to help you work with builders. Agents on the ground can get a better idea of actual inventory available, what incentives may be on the table and what homes may hit the market in the next day or so that aren’t being publicized. They can also leverage their long-standing relationships with builder reps to help you get the accurate, timely information you need to make a sound home buying decision. This is especially important if you’re trying to shop from afar, i.e. out of state.
If you’re looking for a new home build in Northeast Florida, get in touch with us. We’ll be your “boots on the ground” to help you get to the closing table faster…