New Home Construction and Misconceptions

Construction worker observing unfinished house

There are many new home construction communities in the Tucson, AZ area and surrounding communities of Oro Valley, Sahuarita, Marana and Vail, AZ.  If a choice was given, many home buyers would prefer a new home rather than a resale home; especially those buyers who don’t have the interest, time or extra money for repairs or renovations.  If you have never purchased new construction before, or it has been a long time since your last new home purchase, it is much different now and very different from a resale home purchase.  You may bring with you some misconceptions as well.  Let’s address some typical misconceptions here.

Expectations You May Have

This is one of the biggest misconceptions:  Because it’s new it must be PERFECT!  Mistakes can happen and do happen. Unfortunately buyers that don’t have realistic expectations often find themselves in emotional turmoil when things go wrong on the construction of their new home.

Selections and Upgrades

The best part of a new home is picking out flooring, appliances, countertops, fixtures, paint colors, etc.  Everything is up to date and new.  With choices comes some financial responsibility.  Keep it in check.  Paint schemes vs basic white, Granite verses Formica counter tops are big price differences.  These upgrades add up fast into the thousands of dollars.  Know what adds value and what doesn’t.  Trendy upgrades may be good now, but you may grow tired of them early on.

Think of your upgrades as your own personal enjoyment.  Something you want, not whats necessarily good for resale value.  This isn’t a renovation we are talking about here.

The Home Inspections

People think because it is new, they don’t need a home inspection.  Au contraire.  Conducting a home inspection is just as important as for a resale home transaction.  New doesn’t mean perfect.  Things get installed improperly.  This is a huge investment for most people, so being a penny-pincher on a home inspection, can cost you down the road, regardless of the warranties the builder offers you.

Builders are Non-Negotiable

Builders often keep their base prices consistent. If they don’t it starts to set a precedence for futures home sales.  How would you like to buy a home and have a neighbor buy theirs for $10K less.  This affects values.  Very rarely will they budge on the price.  They may offer incentives, such as an upgrade.  Or closing cost assistance.  But pick wise upgrades, like those you know you will need as soon as you move in , such as blinds, maybe landscaping.  (If your new home has an HOA Home Owners Association that requires a manicured front yard, this upgrade could be most valuable to you.)  All these negotiations may depend on the current market conditions in the area you are buying.  The builder may have enticing incentives if you use their lender, but review what is being offered.  Shop around for lenders then compare.

Also, try to buy at the builder’s fiscal year end when they want as many homes under contract.

The On-Site Sales Manager

business handshake in an office to seal the deal

It’s a one stop shop that attracts buyers.  Model home present to ‘ewww-ahhh’ over.  Land is right there.  The sales manager is right there.  The biggest misconception is that buyers believe they either cannot have or don’t need a Tucson real estate buyer agent/broker on their side.  The On-site sales manager represents the Builder not the Buyer.  Many buyers understand this concept to have a professional whose fiduciary responsibilities are to work on the buyer’s behalf to get them the best deal, educate them on the local market, negotiate on their behalf and assist the buyer in their due diligence when buying a resale home, but still think it is perfectly OK to walk in to a new construction home site and abide by all the demands the on-site salesperson tells them to do.

Buyers often don’t think of having their own representation until after they have already signed in at the welcome center, spoken with on-site seller’s representative, given up some personal information verbally and even verbally said, “I really like these homes, I want to buy.”  Then it’s too late!

So, yes you can have your own buyer agent.  It doesn’t change or take away your representation. Many of the new homes are listed on the local MLS – Multiple listing Service, the same as resale listing. The new home listings will include an offer of compensation and cooperation to a buyer agent.  The builder pays those agent fees from the proceeds of the final sales price, just like a regular resale!

But, what the buyer doesn’t see in those MLS listings are the agent remarks from the builder stipulating “The buyer agent must be present during first walk through visit.”  That is where they gotchya!…  Builders know buyers are out and about driving around and most likely will stop by to “take a peek” and maybe fall in love with a model home and decide to buy.  What you say as a buyer in front of an on-site salesperson can be a deciding factor of who is about to represent you in your new home purchase!  I have heard stories of buyers saying they were told by an on-site agent they could not have a buyer agent represent them since they had come to the site without an agent.  On-site agents don’t want you to be represented.  The on-site agent is there to maximize the seller’s profits.  The on-site agent isn’t going to tell you whether or not a builder is willing to give incentives.  Again,…..they are not there to represent you!  They represent the seller/builder.  Just to be fair, there are on-site salespersons out there that are courteous and some what educational to those buyers that come in to the welcome center and advise buyers that if they don’t have a buyer agent, it would be a good idea to get one.

The Bottom Line

If you have a buyer broker agreement to represent you, then abide by it and don’t go visit new construction sites without your agent.  Simple.

If you visit a new construction site prior to any agreement and express much interest in buying to an on-site agent, you may have ruined your chances of getting independent representation after the fact.