Blog with MAE Capital

What you should Know when Buying a New Home in a New Subdivision

July 24th, 2017 10:14 AM by Gregg Mower

Most people think when you buy a new home in a brand-new subdivision you can’t use your Realtor.  This is a myth; most major builders will co-operate with outside agents to get their inventory sold.   This will help you as a buyer in that your Agent is driven to work for you not the builder, whereas the sales agent in the subdivision is looking out after the builder’s best interests not yours.   Having representation with your own Agent will not cost you anything as the builder will pay your Agent at the close of the sale.  It most cases, your Agent will be able to better represent your best interests in getting the best base price and will have the ability to negotiate on any improvements you might want. 

It is very tempting to just stop into a builder’s sales office and look at the model homes they have staged to view.  When or if you do this, you should tell them you are working with an Agent even if you are not.  This will allow you time to get representation to negotiate the best deal possible.  Communication with your own Agent will be far easier than trying to deal with the sales Agent that works for the builder as they don’t have the incentive that an Agent working for you would have to get the answers back to you in a timely manner.   Real Estate Law states that an Agent must look after the seller’s best interest first, except if a buyer designates an Agent to work exclusively for them. 

Your Agent can generally provide you with more information on the project than the sales Agent working for the build can or will.  A good Agent will be able to tell you the dynamics of the neighborhood and surrounding area better than the builder’s Agent as they don’t have any incentive to know what is going on around the builder’s project, they are there to move units like a car dealer.  If there is a Home Owner’s Association (HOA) your Agent should be able to get you good information on what it pays for and what the goals of the association are.  An Agent will also be able to take the time to research the schools and if there any new schools coming to the area and when they will be opening.   Your Agent will have the time to devote to you to research school bonds, Mello Roos,  and other items that may affect your payment when purchasing a new home. 

If you have never purchased a new home before you will notice that the model homes have tags on several items in the homes that may say “optional” or “upgraded item” these items are not included in the base price of the home.  Potential home buyers will sometimes miss these items and expect them to be in the home they purchased when it is completed.    Then when it becomes time to do the walk-though they are not in there and this can bring confusion and disappointments to new home buyers where if they had representation their Agent would have known to put those items in the initial contract.  These upgraded items can raise the price of a new home significantly so it is important that you know exactly what the end price will be with all the upgrades you want.  MAE Capital Real Estate and Loan’s Agents know how to negotiate for these items for you and you would be surprised how much money you can save by having that representation.

You will also see that when you are dealing with a builder’s sales Agent that they will steer you towards their lender in the form of giving you incentives to use their lender as opposed to an outside lender.  This is an illegal activity specifically called steering, however, they still do it.  At MAE Capital, we have a system that will be able to work around the builder’s lenders, in most cases, and still get you the best interest rate and the lowest costs even if the builder is offering $10,000 in incentives to use their lender.  This actually works in the form of “Bundling” our services.  We have proven this to work and save our client’s money and maintain control over their own transaction.  This helps our clients in that they only have to make one phone call to find out about the house and the loan.  This not only saves time but will save thousands of dollars.

To recap, when looking to purchase a New Home in a New Subdivision you should really try to have your own representation.  This will work in your advantage in many ways.  You will, generally get a better price with the upgrades you want, you will get more financing options, you will get more knowledge of the area and feel more comfortable that you have someone working for you towards the purchase of a new home.  Your Agent will go through the walk-through with you at the end and if anything is not up to your standards your Agent can deal with it for you with the builder directly.  This is a big undertaking so if you are looking to purchase a new home in a new subdivision you should get some advice from a professional Agent prior to making an offer to purchase and you could be saving thousands of dollars just by having a conversation that doesn’t cost you a thing.  Here at MAE Capital Real Estate and Loan we are here to help guide you through this process and save you money.  Give us a call today at 916-672-6130. 

Posted by Gregg Mower on July 24th, 2017 10:14 AM

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MAE Capital Real Estate and Loan

CA DRE #01913783|NMLS #806170

4940 Pacific Street Suite A
Rocklin, CA 95677