Written by Gretchen Rosenberg, President and CEO of Kentwood Real Estate
When you’re looking to purchase a brand-new home, it’s wise to hire a real estate broker as your trusted advisor. Homebuilders are in the business of building and selling properties and maximizing profit. As any business would be. They’re not fiduciaries to buyers and will not give you the clear-eyed advice you need as you move through the process.
When I was actively selling real estate, I was fortunate to represent many homebuyers when they purchased new construction. It was a privilege to help them wend their way through the complex process. I learned the ins and outs of a typical builder’s contract language and the important questions to ask.
Three Important Questions
- Where is the Earnest Money Held? Did you know that builders like to hold your earnest money in their operating accounts? Wouldn’t it be better to request they hold your earnest money at a title company in a trust account?
- When Can we Schedule an Inspection? Did you know that most builders will permit you to have a home inspection? You should absolutely do a full-blown inspection. One time, we discovered the sewer line from the house hadn’t been connected to the city main. Another time, the builder had forgotten to spray insulation into the attic. And another time we found that a roof truss had been dropped through the living room sub-floor and punched a hole through it! We were standing in the basement looking up at a hole in the wooden floor and saw they’d covered it with carpet and pad.
- Can I use a Broker? A real estate professional is your expert and your advocate. They will work on your behalf throughout the process of building or buying new construction. Brokers help you understand the contracts, the key steps, manage negotiations (you may not get much off the price in these heady days, but you might get a few freebies.) Do not walk through the door or sign in without bringing your broker in the first time. Commercial projects require pre-set appointments so this would be more difficult than residential where the showrooms beckon.
Bottom Line for New Construction
Don’t go it alone when choosing new construction. Builders factor in the cost of commission and they don’t back it out if you’re unrepresented. They pocket the difference. So use that money to your benefit.
At Kentwood Real Estate we have both residential and commercial brokers who understand first-generation space. Contact us for all of your Denver and Fort Collins, Colorado real estate needs!