Should you use a realtor when buying a new home construction?

Should you use a realtor when buying a new home construction?

Published | Written by Brandon Holley

Disclosure: Transcribed from video. The wording may be off. 

Answering the big question, do you need an agent when you're buying new construction? The short answer is no. However, when was the last time you built a home from the ground up? What do you know about appraisal lending? What do you do about inspections? There are many steps when buying new construction, so what do you need to know? Check it out.

Thank you for joining me again this week. My name is Brandon Holley, and I am the owner broker of Holley Homes Realty here in Austin. Texas and this channel are all about new construction. You need to know new developments, awesome multi-use commercials, all of that good stuff, so if you're in the market for a new home, please hit like please hit subscribe. I promise you will get Some really good information about things you need to know going on around central texas.

New construction is still one of the best ways for homebuyers to purchase a home but do you need an agent so you can buy and sell real estate without an agent? However, it's kind of like Do your taxes. You can do those on your own. However, if you use an accountant, it will save you money well. Using a real estate agent is the same. The only difference is you have to pay an accountant to do your taxes. You don't have to pay a real estate agent a real estate agent's
The builder pays the commission. Therefore, using their services is free and an extremely smart idea for you.

First, when buying new construction, remember the sales rep works for the builder. They're not working for you. They're there to help you, and they will help you; however, they're not going to ask the questions you need to ask, so what are those questions? I've put up a list of things that you need to realize that you need to ask to make sure you're aware of when looking over the contract here. They are aware of what the warranty covers. How long is the warranty? Does the warranty transfer to the next buyer if you decide to sell? Who handles the warranty? Is it on-site, or is it a third party also? What does the warranty include and exclude? Is there an escalation clause? Does the price get locked at the moment that you sign the contract? Is this the final price, or is this just the base price? Is there going to be an upgrade, or will there be a lot of premium? Find out a little bit about the community, find out the size, how many homes there will be, and if there will be an HOA who takes care of the HOA. Also, what are the tax rates for the community? Do they have plans for the surrounding areas? It might be a green belt behind your house right now, but do they have plans to sell that to a developer? So make sure you get direct answers for all of these sales reps. Get busy, so if they miss an email, don't hesitate to reach out. Remember, you're the one buying the home. You get to ask these questions. You're not a hassle to anybody. This will be the biggest purchase of your life, and you want to make sure to have all of your bases covered.

One of the reasons to have an agent is to keep this open communication between you, the sales reps, and the builder. That's why we are here. They will help you with that communication, but they'll also help you keep a paper trail to ensure things are going the way they need. They're going to visit the site when you can't. That's their job to make sure things are going the way they're supposed to go. They're also going to help you with problem-solving if something comes up with lending with the title with inspections. Another big question that I'm Asked is if you should get a pre-drywall inspection and a final inspection done before closing on your home, the answer is always yes. Inspections are great for buyers. They put your mind at ease; however, many of the people I work with a need that money for closing costs, so what do you do if you don't have the extra 250 300 bucks lying around to do that inspection? I suggest always getting an inspection done before your one-year warranty, so live in the home for 11 months. You're going to find problems, make a list get those things in order, and then get that inspection done before that one-year warranty is up. Send that over to the builder when the inspector gives you the list of things that he came up with that might be problems with your house. They are required to come through and fix all of those things. It's big for buyers. It's only going to cost about 400 bucks 450 depending on the size of your home, but it can put your mind at ease, and you're still under warranty for all of those problems.

I wanted to go ahead and put together a code-mandated inspection list for you, so here are all the stages. Have to pass an inspection before you can get the certificate of occupancy. So pay attention to all these phases. The sales rep should be telling you when these things are being done. If not asked, you should be able to get a list of the time frame of when things will be completed, so another inspection you're going to do that's not a third party inspection is going to be your final walk inspection, so you're going to do that about a week before close, and during that time you're going to walk through they're going to give you some blue tape and you're going to go through and mark things that are a problem that needs to be addressed by the builder make sure you're diligent about this mark everything again remember you're the one buying the home you're spending the money they have to fix it for you if there's a big problem some of the things that I like to make sure that I check for my clients are all the windows they open, and they close very smoothly all the doors open and close with no sticking Anything like that I like to run my fingers under the granite if you have granite make sure there are no chips no cracks kind of get beside the wall and look down make sure all of the texture and painting are even some other things that you might not think about flip all the light switches on and off all the water open and close all of the cabinets to make sure it's a very smooth open and shut all of that these are all really important things that you need to get checked now remember you're still under warranty for that one year so if something does happen you still have that time that you can come back ask the builder to fix those but before you move in you also want things set all right.

So the final questions that you need to ask when purchasing new construction are with the lender. Now it's always important to get pre-approved with the builder's lender, and this is because most times, they give you some incentive. Normally it's a $$$ amount of money towards closing costs, which can be massive. However, you are not stuck using that lender, and what I tell all of my clients is after you get pre-approved with that lender, take whatever estimate they give you and shop around with another lender. Talk to your bank and speak to another lender that you possibly might know you can get a lot of times leverage that uh quote that they gave you to get a lower rate with the builders proof all right so what I mean from this get a quote from the builder's preferred lender. Once you get that quote, take it to an outside lender and see what they can do for you. Sometimes, they can give you a lower interest rate um or look at closing costs or something along those lines. After getting that quote, take it back and see if you can leverage that against the builder's preferred lender to get a better quote.

The last thing you need to keep in mind before closing is not to do Anything drastic with your credit, don't switch jobs, don't purchase a new car or furniture, or Anything like that without speaking to the lender. This is because there's a debt to income ratio that you are set in to be able to purchase that home. So if you put too much debt on your credit card, you won't be able to close on your house.

Also, the job, you need to be in the same occupation for at least two years before closing, so if you all of a sudden decide to change careers, you might not be able to close, so talk to a lender before doing Anything crazy. I hope that if you are going through buying a new construction home on your own, these tips can help you out. Please know that if you do have questions drop a comment below. I am happy to help you out. If you are just now starting your journey of purchasing a new home, please reach out to an agent. It is helpful for all of the things that we just went through within this video, but after you close on your home, that agent will still be there for you. Whenever you plan on selling your home, that agent will be there for you, and I promise you that building that relationship early on will help you out and save you money down the road.

Thank you again for checking out my video. Please hit like and subscribe for more new construction information that will help you along your home buying journey, and please drop a comment below if you have questions, I'm happy to help.

*Disclaimer - All neighborhoods are different. Please speak to an agent to get all the facts straight. Also, equity is not guaranteed and fluctuates with the real estate market.

If you have questions about new construction, please reach out to me. The builder pays the commission, and it is my job to be knowledgeable about these communities. 

Brandon Holley

Broker - Holley Homes Realty 

Phone - 512.487.9242

Email -

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