Far too often a purchase is an emotional action; food to shoes to clothes to cars...and even homes. Not being fully informed before any purchase is dumb; with real estate it can be calamitous. But just like a showroom of new cars, a brand new, well appointed home can result in emotion trumping logic...and a "what did I do" reaction a few months later. This is the second part of How New Home Buyers Walk into Trouble, and it touches on additional things to consider before signing on the dotted line.
Do you understand the micro market?
Has there EVER been a time when an agent or the National Association of Realtors said it wasn't a good time to buy or sell a home? Remember, NAR said "buy!" as the nose dive was underway. Has there EVER been a time when that new home agent didn't bubbliciously run to the door and pitch their house and area? Even when it sat next to a main road, high power lines, detention pond or some other external issue? So when this onslaught of love and bliss hits, what to do? Understand the pitch and focus on the data and micro market trends. New or existing, all real estate is hyper local. That cannot be stressed enough nor can the importance of understanding trends over time, inventory, impact of new homes on the market and he myriad of factors that impact value and appeal. In short, while real estate is hardly splitting atoms, it does require the right assets and the ability to collect and analyze the data.
Don't Fall in Love
The heart wants what the heart wants, it's up to the head to keep it from financial ruin. As mentioned, sales revolves around causing the buyer to act impulsively, buy now and worry later. Would anyone toss 300K into the stock market without careful consideration? Not anyone with common sense. Walking into the model home is an assault on willpower; the home will be tricked out with all the "must haves" and buyers will fall right into the builder's trap. What starts as a 300K budget slides to 375K and before it's realized the budget is blown.
Is the builder reputable?
This might sound like a crazy questions but "Bob the Builder" isn't really building your home. Modern construction is a process; site, foundation, framing, plumbing, electrical, drywall....and each component has distinct crews. Often these crews build for more than one builder - and work is open for bid so often times the better the price, the more work received. Buyers expecting "custom" craftsmanship may be disappointed, and those expecting the county inspectors to ensure all is code compliant even more so. It's best to hire private inspectors to back up the county code inspectors.
There's more to each of the above cautions and several more to review BEFORE getting excited about a new home and doing something stupid. Buyers love new homes, what's not to love? However, diving into a new home without the proper preparation and research can end very very badly. Critical in the equation is a quality buyer's agent; always use a buyer's agent when buying a new home. Nothing is saved by not using one and the idea to use an agent that kicks back money is ill advised. Is that how they get business? And if they kick back mony, how invested in YOUR home will they be? There are an incredible number of moving parts with a new build, don't let something that can be easily handled end up becoming something that does lasting damage.
The first part of How New Home Buyers Walk into Trouble touches on other things to be aware of. As always, please fee free to visit the Hank Miller Team to read much more about all things real estaste.
