Last time we looked at a misconception about representation in the purchase of a new construction home. This week we look at another misconception:
Misconception: If I don't use an agent the builder will give me a bigger discount. IT is simply not true. Builders prefer to keep most of the money they would pay an agent. The do not just give it to you. Also it is true that some builders prefer you not to be represented. IT saves them money and it keeps you under their influence. Are new construction prices always negotiable? No. Is their lowest price always their lowest price? No.
Example: (real true) I recently had a Police officer who had spoke with the builder and found a home she liked. She told them she had an agent. When she asked me to come out and meet with the builder to review the contract and terms. I toured the home and noted several issues with the home. Many could be fixed. A couple were not fixable. The location was good but not the best in the subdivision. After a serious discussion with the builder and my client we looked at the numbers again. I was able to get several thousands of dollars off the original "lowest price". This allowed her to get more options and saved her payment every month. The builder still paid commission, they still worked well with my client and myself.
Misconception: I don't need an agent, I already know how to negotiate.
Certainly there are many skilled negotiators out there. And yes they can often save money for themselves. And if you are negotiating in an area you do not fully know you can spend more money than necessary.
Example: In my first example I noted the choice of lenders or loan types can lock you into extra expenses down the road by the choices they put in the contract. Knowing where to negotiate, can save you several thousand dollars. Little things like asking for blinds to be included (usually about $1400) can save folks money on their move. I recently bought a new construction home for my family. I was able to get the blinds included in our agreement. Our neighbor who represented themselves, said they did not even think about blinds until they started to move it. Then they cost $1495 to have installed. Again a professional agent will help you not miss an opportunity.
More to come