Chapter Four: What I Want You to Know Before You Buy New Construction

After telling this story, I don't want you to come away thinking that buying new construction is a bad idea.

There are a lot of reasons buyers choose new construction, and for the right buyer, it can be a fantastic option. What I want you to understand is that new construction doesn't mean simple.

New construction means different.

And there are a few things I want every buyer to understand before they walk into a builder's sales office.

1. The builder's sales representative works for the builder.

This sounds obvious, but it's worth saying. The person sitting across from you may be incredibly helpful. They may know the homes, the community, the floor plans, the incentives, and the construction process inside and out, but their job is to represent the builder's interests.

That's not a bad thing. It's simply their role. However, your agent's role is different. You want someone sitting beside you who is looking at the transaction from your side of the table - Someone who isn't emotionally attached to the house. Someone who can look at the contract, the pricing, the incentives, the deadlines, and the negotiations and ask:

"Is this actually a good deal for my client?"

2. The model home isn't the contract.

It's easy to fall in love with new construction. My gosh. It's so easy. Everything is clean. Everything is new. The finishes are beautiful. The furniture is perfectly placed. Before you've even signed any paperwork, you can very quickly start imagining your life there. But the model home is only designed to sell you the dream.

It's the contract that determines what you're actually buying.

Pay attention to the specifications: the included features, upgrades, allowances, timelines, warranties, contingencies, deadlines, and every addendum you are asked to sign.

What you see isn't always what you get - and what you get isn't always what you saw.

3. Incentives aren't free money.

This is a common misconception, but builders offer incentives for a reason. Sometimes they're incredibly valuable. A closing-cost credit, rate buydown, or price reduction can make a meaningful difference in affordability to a buyer, but always ask what comes with it.

• Is the incentive tied to the builder's preferred lender? (Watch those loan origination fees carefully!)
• Does it require you to close by a certain date?
• Is it available on all the homes?
• Does accepting one incentive mean giving up another?

The question isn't simply:

"What is the builder offering?"

It's:

"If I accept the incentives, what does the entire deal end up looking like?"

4. The contract deserves your attention.

This might be the biggest thing I want you to take away from this entire series, as you can probably tell from how much I've talked about it. But it's extremely important.

Don't let the excitement of the house overshadow the paperwork. New construction contracts can be lengthy, and builders often use their own contracts and addenda, and they're really creative with how they glaze over some pretty significant details. If you are not careful, you might miss it.

There may be terms that are very different from what you would see in a typical resale transaction. Read them. Ask questions. Have your agent explain anything you don't understand.

And when something changes during negotiations, read it again.

A new addendum isn't "just paperwork."

It's a change to the deal.

5. Your agent's value isn't just in finding the house.

This is something I think gets overlooked when buyers purchase new construction, and I've heard it countless times. I've even had family members almost purchase new construction this way.

You can walk into a builder's office and find the house yourself. You tour the model, then you pick your lot. You can choose your finishes, and you can talk to the sales representative.

So you may wonder:

"Why do I need an agent?"

Because finding the house is often the easiest part.

The value is in having someone who understands the transaction. Someone who is willing to ask questions when something doesn't make sense. There is value in having someone who can help you evaluate the numbers, recognize when the negotiation changes, review the terms with you, and help you understand what you're giving up in exchange for what you're getting. Sometimes, it's important to have someone who will tell you the brutal truth about the good, bad, and the ugly about what it all means.

That's a very different role from simply opening the door.

6. And finally, don't assume the builder has all the leverage.

They may have more experience negotiating these contracts. They may sell hundreds of homes a year. They may have policies they don't typically deviate from… But that doesn't mean you have to say yes to everything.

You still have choices. You can negotiate, you can ask questions, and you can walk away if that's your decision.

You can decide that a particular home isn't worth the terms required to purchase it.

Sometimes the best negotiation is knowing when not to make the deal.

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