Opting for new home construction in the Austin, Texas marketplace and surrounding areas
Whether to buy an existing home or have one built is yet another decision to make during the home-buying process. If you decide to go with new construction, we as Realtors will be a powerful advocate in your corner as you negotiate:
- Help negotiate terms with the builder. Most builders have their own contracts or addendum’s. We will be your fiduciary. Remember the builder’s representative works for the builder not you.
- Advise on Builder upgrades and selections
- Advise on required builder deposits & escrow amounts.
- Help you stay within your budget
- Help maintain exit strategy and not exceeding local neighborhood values if & when you have to sell the home in the future.
- Help with mortgage selection
- Help set realistic move-in dates
- Help set-up third party inspections & walk through inspection
- Help guide you through all the major construction steps if purchasing a ‘to-be-built’ home
- Communicate closing instructions, keeping closing parties informed with the goal of a smooth transaction and on-time closing.
Below are some basic pointers to prepare you for the journey ahead.
Selecting a builder
Shopping for a large production or custom home builder can be a daunting task. The first step is working with your Realtor to define the area and the school district you wish to live in. This will depend on many elements of personal choices/specific requirements, local amenities and commuting distances.
Many subdivisions also have multiple choices of builders. Once you have decided on a area or subdivision start by defining what architectural styles/floor-plans appeal to you and then seek out the builders in your market area who offer those styles. Our HomesAroundAustin team can advise you of the builders reputation utilizing local knowledge and Realtor community feedback. Due diligence is essential. Ask for referrals to get first-hand accounts check whether they are members of local or national Home Building Associations. Do they offer third party home warranties, especially if the builder ever go out of business or change hands? Do they get third party inspections during the construction process? We are familiar with all these processes and will walk you through each step in a professional manner.
The builder representative and your real estate agent
A builder representative’s ultimate goal is to sell you a home. His or her role is to provide a wide range of information to help you in your decision-making, from building restrictions, roads and easements to inspections, warranties, rebates and upgrades. Our real-estate agents are knowledgeable in new-home construction will be able to help you wade through all the data and point out the downsides and upsides of each line item. Our agent working for you can also look out for your interests in reviewing the builder’s contract, which often contains more legal jargon than consumer-friendly language.
It’s all about timing
Market conditions will dictate a builder’s incentive to make a deal you cannot refuse. When a builder has inventory on his hands, his carrying costs start adding up. When this happens, a builder might be more amenable to strike a favorable deal, whether it’s throwing in upgrades or discounting the asking price. We as your agent can help you know when market conditions are right for these benefits. Also, watch for builder close-out sales. Builders promote these special events when a new subdivision is near completion but empty inventory still remains. We as your agent can help you separate your emotions and use market driven data to see if this is really a great deal. This is typically the largest purchase of your life, we want you to enjoy the home without ever thinking “wow, what did I just commit to”…..
Builder deposits
Whilst there might be exceptions, most builders require a deposit when a purchase agreement is signed on a ‘to-be-built’ home. They also require that the buyer pay half or sometimes the full amount on upgrade selections prior to closing. If you back out prior to closing, unless the agreement states otherwise, you will lose that money. Make sure you understand every detail in the builder’s contract before signing it.
How we get paid
These are just a few of the services the ‘Homes Around Austin’ team can help you with to make your new home transaction as smooth as possible. The best part it doesn’t usually cost you any money for our representation. Most builders have a marketing fund that pays us directly at closing or slab, this rarely affects your purchase price or price negotiation. We strive to be ethical in all transactions; if a builder offers a commission bonus on top of our regular commission where permissible by RESPA & your mortgage underwriters we can rebate the extra bonus money amount back to your closing costs at closing on the HUD1. During your new home search process with our agents, we will discuss with you if the builder offers additional Realtor incentives.
How Buyer & Seller Agency works in the State Of Texas
Texas Real Estate Commission (TREC) requires all agents to voluntarily present this form to all buyers & sellers. It explains how Agency works in the state of Texas. Many States and Countries around the world do not have this kind of representation protecting you as the consumer. Realtor’s in Texas are proud of our Fiduciary services. The HomesAroundAustin team want to earn the right to be your agent choice for all real-estate transactions here in Texas. If you are moving outside Texas or to other major cities within Texas let help you find a reputable agent that will also provide the same exceptional service. Contact us today so we may serve you in your next new home purchase!
Information on Brokerage/Agency: http://www.trec.state.tx.us/pdf/contracts/OP-K.pdf
