Buying a new home directly from a builder, is very different than buying a home from an individual seller. Builders have profit margins; home sellers have equity. A builder constructs and sells multiple homes for a living, with no emotional attachment. Large home building companies with shareholders also have aggressive sales and income goals to meet.
Most home buyers don’t realize it, but builders use unique sales contracts that are written to their favor. These contracts are complex, written by attorneys with the builder’s interests in mind. As the home buyer, you are at a serious disadvantage if you do not understand the contract you are signing. Even if you do understand the contract, it will not provide the contingencies and protections that you must have. Here are some examples!
Builders tend to have their own preferred lenders, and they will heavily promote them. Some even have an ownership interest with the lender, so you’ll be “steered and encouraged” to use them! While this simplifies things for the builder, and possibly adds to their profits, their financing may not be the best deal for you.
A newly-built home can also have defects in workmanship, installations or materials. For example, you may opt for a package of upgrades, but find that the wrong fixtures were installed. Or, there may be other problems that aren’t evident until bad weather comes along. Without knowing your rights, it can be difficult to obtain remedies. This is why you should have at least two independent inspections at key points during construction.
These are some of the reasons why it’s important to have an Exclusive Buyer’s Broker at your side, before you approach a home builder! If you do happen to visit a model home on your own, be sure to disclose up front, that you are working with an Exclusive Buyer’s Broker.
If a builder tries to discourage you from having representation, be very wary of their quality control, and possible “shortcuts” in foundation and framing. They may not want the oversight or the extra inspections for reasons of their own. They are also more likely to try and convince you to buy options that are high profit for them, but low value for you.
Here are important points to keep in mind:
1. There is no additional cost involved to have an Exclusive Buyer’s Broker represent you. The builder will not charge you more for having your own representation. Nor will they give you any price breaks for not having representation. Since it is illegal to pay commissions to unlicensed people, they simply keep it in their marketing and advertising budget.
2. At Buyer’s Resource Realty Services, we are familiar with the reputation of Central Ohio builders and the history of their various developments. We match our Buyer-Clients with quality builders and well-constructed homes that suit their needs.
3. We know which builders offer the best warranties and post-completion follow-up. We also consider their financial stability. This helps you avoid problems that could otherwise surface after closing.
4. Because we bring qualified buyers, and we are a source for repeat buyers, most reputable metro Columbus home builders tend to be very responsive to our negotiations, including our recommended options and lot placement. They respect our Buyer-Clients and treat them well.
5. We provide all the above, in addition to our exceptional Buyer-Client services.
As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax
