How to Buy a “New” Home with your REALTOR®

 

This  is a “how to” post for most buyers out there that are new to the buying  scene, but also for those that may have bought and sold a couple of  homes by now but are thinking about going the “New” route.

New Home Construction

One  of the first things you must understand about new home builders is that  they are not going to “Give” their spec homes away. A lot of people  that I have come across recently have thought that because the builder  built the home a year or two ago and they are still trying to get of  that you will be able to get that home for a song and a dance!
Builders  build on Spec…meaning Speculation, not Specification – that there are  going to be buyers out there who are going to purchase the home that  has already been built under their design. They are in a sense, hedging  the market, betting that if they “build it, the buyers will come”.
So, if  you are going to buy a Spec home and it’s been on the market or the  builder has had it for a while, by all means give it a good go to see if  you get a good discount off the price. But do not expect that the builder is going to go BROKE if you don’t buy it!

Buying a New Home with your REALTOR®

There a lot of people that think REALTORS® cannot represent you in the  purchase of a new home; this is simply not true. We can and we gladly  will help you so that you know the right questions to ask, what you can  expect during the process and act as a guide, as we regularly would, just as if  you were purchasing a resale home.
So here is a list of how you would go about making that purchase of a new home with your REALTOR®:

  • Communicate with your Agent that New Homes are in your price range and are of interest
  • Pick the areas that you want to look at those new homes and schedule it with your Agent to go out and look
  • If you are working with a REALTOR® you have to understand we are commission based; if we do not Register you with the show home in the area you are interested in, we do not get a check.
  • If the home you are interested in is a Spec home, and it is NOT listed on the MLS®, the contract WILL be written on the Alberta New Home Warranty Program contracts (rules may differ by province).
  • If the Spec home is listed on Realtor.ca, the initial offer will be  written on the standard AREA contract and once accepted will be  transferred over to the Alberta New Home Warranty contract (rules may differ by province).
  • You CAN Negotiate on the Spec homes. In my  experience some builders are willing to throw things in like window  coverings or sod for your yard. You just have to know how and when to  ask for these things.
  • Do you NEED a home inspection? Well that one is up to you! I have  seen it on new homes, in fact I had one done on my home (but we also  built during the “Boom” in Calgary back in 2006!).
  • Closing costs: Typically the builder will allow you to use their  lawyer and will cover the cost of the fees; of course if the home is not  listed on Realtor.ca this scenario is more likely.
  • A walk-through is planned usually upon possession day to identify  deficiencies within the home so that the builder can come back in and  fix them. This varies but there will also be a 3, 9, and 12 month  walk-through to do the same.

So there you go: a quick and dirty list of how you might go about  working with an Agent to purchase a new home. If I may impress upon any  and every one who reads this post, please concentrate on the FIRST point  that I made. Communicate with  your Agent – make sure he/she knows you are  interested in new homes – we can and will represent YOUR interests in the purchase.

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