Go Back  The Hull Truth - Boating and Fishing Forum > BOATING FORUMS > Dockside Chat
Reload this Page >

EDUCATE ME-Buying a new house from a builder.

Notices

EDUCATE ME-Buying a new house from a builder.

Old 02-09-2015, 10:08 AM
  #1  
Senior Member
Thread Starter
 
Join Date: Apr 2011
Location: Colorado
Posts: 1,153
Default EDUCATE ME-Buying a new house from a builder.

Never done it. How does the transaction normally happen? Do I need a realtor to represent me? Do I still (I assume I do) still negotiate a purchase price?
cparkerc is offline  
Old 02-09-2015, 10:13 AM
  #2  
gf
Senior MemberCaptains Club MemberPLEDGER
 
Join Date: Feb 2001
Location: North of Boston
Posts: 12,894
Default

I have built and sold a few homes.

As the builder I always had a Realtor and an attorney representing me. The sellers also had a Realtor and an attorney representing them.

Yes, you can negotiate the sales price. However, my partner and I never dropped our price, we would add in some upgrades in lieu of a discount, and the buyers would typically choose additional upgrades which actually increased the selling price.
gf is offline  
Old 02-09-2015, 10:23 AM
  #3  
Admirals Club Admiral's Club Member
 
Join Date: Nov 2008
Location: Somewhere in the middle of Michigan
Posts: 10,362
Default

Around here, people usually buy spec homes from builders without involving a real estate agent. You should have your lawyer involved to read over the purchase agreement before you sign and to conduct the closing.

Price negotiations? Depends on the local market and the builder. Never hurts to try.
yarcraft91 is offline  
Old 02-09-2015, 10:24 AM
  #4  
Senior Member
 
Join Date: May 2014
Location: High Point, North Carolina
Posts: 716
Default

In general, yes. Get a buyer-agent with whom you sign an agreement so that they represent you, not the seller. Make offers, negotiate, etc. In some cases a builder might be more likely to offer free upgrades than lower the price, so you'd want to take advantage of that. If the builder changes something while building the house from what you both agreed upon, you need to be in the position to walk. Then if you are still willing to buy the house, you can demand concessions. Dealing with builders who build on your lot can be quite different from those who're also selling the land, particularly multiple adjacent lots. Most of all, watch them like a hawk. Visit the site constantly and ask questions. Check with others who're knowledgeable. City inspectors aren't always conscientious, but if you raise an issue with them formally, it's hard for them to ignore. If you're buying a preselected design and would like something changed or added to it, demand it. If they want your business, they'll do it. How much they charge for that is subject to negotiation regardless of whether they say "that's our standard fixed price for adding xxx". You might not like Holmes, but watch a few episodes and get the feeling of what can go wrong. Hopefully you'll have an excellent builder. But protect yourself just in case. You'll never be sorry you took precautions.
DriveDog is offline  
Old 02-09-2015, 10:29 AM
  #5  
Junior Member
 
Join Date: Jul 2014
Posts: 25
Default

Originally Posted by gf View Post
I have built and sold a few homes.

As the builder I always had a Realtor and an attorney representing me. The sellers also had a Realtor and an attorney representing them.

Yes, you can negotiate the sales price. However, my partner and I never dropped our price, we would add in some upgrades in lieu of a discount, and the buyers would typically choose additional upgrades which actually increased the selling price.
^^^THIS^^^

As a general contractor/builder, we always require the Buyer to be represented by an attorney in a firm that we don't use. Further, we won't give final acceptance of an offer until the Buyer's attorney has reviewed/signed off. Slows down the process, yes. Frustrates some experienced Buyer, yes. But in majority of cases, good for both sides.
Billum is offline  
Old 02-09-2015, 11:00 AM
  #6  
Senior Member
 
Join Date: May 2013
Location: Atlanta
Posts: 1,105
Default

Deduct 20% off the asking price!!
Fish Hunter IV is offline  
Old 02-10-2015, 04:30 PM
  #7  
Admirals Club Admiral's Club Member
THT sponsor
 
Join Date: Nov 2007
Location: Stuart, FL
Posts: 1,244
Default

Just like in a typical home sale, a builder will pay a realtor's commission if the realtor brings you to the table as a ready and able buyer. A good realtor will negotiate the price and/or several upgrades on your behalf, and it's basically free for you. If you feel most comfortable having a real estate attorney review the contract after terms have been negotiated, by all means go for it! Whatever gives you the best piece-of-mind.
Captain_Dave is offline  
Old 02-10-2015, 05:33 PM
  #8  
Senior MemberCaptains Club Member
 
Join Date: Mar 2001
Location: Louisissippi Coast
Posts: 12,273
Default

You do not need a realtor. The amount you would have spent on a realtor can be deducted from he asking price of the house. A real estate attorney can do everything that needs to be done to make it legal. If you are going to finance it, then the finance company will give you all the paperwork they need. DO NOT CLOSE on the house until EVERYTHING that is supposed to be done to the house is completed to your satisfaction. I have found it incredibly difficult to get builders to come back and do finishing work and warranty work.
Paul Barnard is offline  
Old 02-10-2015, 07:44 PM
  #9  
Senior MemberCaptains Club MemberPLEDGER
 
Join Date: Aug 2005
Location: TN
Posts: 4,792
Default

Originally Posted by Paul Barnard View Post
You do not need a realtor. The amount you would have spent on a realtor can be deducted from he asking price of the house. A real estate attorney can do everything that needs to be done to make it legal. If you are going to finance it, then the finance company will give you all the paperwork they need. DO NOT CLOSE on the house until EVERYTHING that is supposed to be done to the house is completed to your satisfaction. I have found it incredibly difficult to get builders to come back and do finishing work and warranty work.

this and (all due respect to the builders on here) check the shit out as deep as you can. The more I get into my 15 year old house doing the normal 15 year upgrade the more I shake my head.
redneck joe is offline  
Old 02-11-2015, 04:30 AM
  #10  
Admirals Club Admiral's Club Member
 
Join Date: Aug 2011
Posts: 557
Default

Originally Posted by Paul Barnard View Post
You do not need a realtor. The amount you would have spent on a realtor can be deducted from he asking price of the house. A real estate attorney can do everything that needs to be done to make it legal. If you are going to finance it, then the finance company will give you all the paperwork they need. DO NOT CLOSE on the house until EVERYTHING that is supposed to be done to the house is completed to your satisfaction. I have found it incredibly difficult to get builders to come back and do finishing work and warranty work.
This !!!

Originally Posted by redneck joe View Post
this and (all due respect to the builders on here) check the shit out as deep as you can. The more I get into my 15 year old house doing the normal 15 year upgrade the more I shake my head.
And This !!!
4oldcars is offline  
Old 02-11-2015, 05:28 AM
  #11  
Senior MemberCaptains Club Member
 
Join Date: Oct 2006
Posts: 1,508
Default

Originally Posted by redneck joe View Post
this and (all due respect to the builders on here) check the shit out as deep as you can. The more I get into my 15 year old house doing the normal 15 year upgrade the more I shake my head.
The problem with build quality is competitive advantage/disadvantage. It's not that the builders don't know how to (or want to) do it right, it's that until you get into the far upper end of the market, the return for doing so just isn't there. I'm in the industry so I see it daily. It's sad, but what are you supposed to do when the client has two other builders promising the same house with the same quality for $50k less or more options and features? I had a buddy who built his place the right way and spent the extra cash on the internal stuff that you can't see (upgraded subfloors, plywood sheathing, higher quality materials, etc). It was a great house but he lost his ass when he sold it and it took 2 years to sell because you could buy a place that "looked" identical for a fraction of the price just down the road. When it comes down to making the purchase, the homeowners all key in on the multi head showers, upgraded kitchens, 70" TV above the fireplace, wine cellar, etc., but very few ask about the depth of the footings, the type of sheathing, quality of the roofing material, etc. Try telling your wife that she has to downgrade her kitchen options so that you can add a layer of plywood under the siding. Builders build what sells, homeowners buy what they can show off to their friends, and build quality takes the backseat....

When buying you have to consider whether or not you intend to live there for 30 years and need the quality or if you're likely to get a job transfer in 7 years and go for the resale.... If staying there for 30 years, find a good veteran builder with a long standing reputation.
Cousin Eddie is offline  
Old 02-11-2015, 05:39 AM
  #12  
Senior MemberCaptains Club Member
 
Join Date: Jul 2003
Location: Lancaster, PA
Posts: 1,018
Default

Some very good advice on here. If the builder is one of those national chains do as much research on them as possible and try to have someone knowledgeable about building houses walk through the place as often as possible.
abeal2 is offline  
Old 02-11-2015, 06:01 AM
  #13  
Senior Member
 
Join Date: Mar 2009
Posts: 1,395
Default

Is the house already built?
Is it already listed with a Realtor?
Is the builder small local or large National?
muskrattown is offline  
Old 02-11-2015, 06:25 AM
  #14  
Admirals Club Admiral's Club Member
 
Join Date: May 2010
Posts: 577
Default

You always pay the realtor, even when you're the buyer. I don't mean you technically write the check for the commission, but his/her fee is built into your purchase price...period. I built new homes for ten years and have bought countless properties and foreclosures. I had a price that I had to get for the home, knew where I wanted to be and that price was different if you had a realtor or if you bought from me directly.

Same thing goes when buying a used house. If you can find what you like and go directly to listing agent with your offer you're better IF the listing agent isn't greedy and understands that they aren't chopping up their commission with another agent and takes a point off their side to make the deal work. Most realtors in my expreience won't do this and after an offer is made and they refuse to work, I would just bring in my buyer's agent and they went from making 6% to 3%.
boatruptcy is offline  
Old 02-11-2015, 08:28 AM
  #15  
Senior Member
Thread Starter
 
Join Date: Apr 2011
Location: Colorado
Posts: 1,153
Default

Originally Posted by muskrattown View Post
Is the house already built?
Is it already listed with a Realtor?
Is the builder small local or large National?
The house is not built. We could pick our lot and any upgrades

It is for sale by the builder. They have models and a realtor on site.

Ryland Homes (I am in Colorado)

Thanks for all the insight, very helpful!
cparkerc is offline  
Old 02-11-2015, 08:36 AM
  #16  
Senior Member
 
Join Date: May 2006
Location: Suffolk, Va.
Posts: 16,907
Default

Originally Posted by Paul Barnard View Post
You do not need a realtor. The amount you would have spent on a realtor can be deducted from he asking price of the house. A real estate attorney can do everything that needs to be done to make it legal. If you are going to finance it, then the finance company will give you all the paperwork they need. DO NOT CLOSE on the house until EVERYTHING that is supposed to be done to the house is completed to your satisfaction. I have found it incredibly difficult to get builders to come back and do finishing work and warranty work.
If the builder has a listing agent that agent will get the full commission if the buyer does not have an agent. The buyer will not have any expense its the seller who pays the commissions.
fishingfun is offline  
Old 02-11-2015, 09:58 AM
  #17  
Admirals Club Admiral's Club Member
 
Join Date: Feb 2014
Location: Lewes, DE
Posts: 10,128
Default

As an agent, I have to advise this. Be aware, that if you hire a buyer agent, and purchase a home from a builder who does not honor a buyer agent commission, depending on the terms of your agency agreement, you can be on the hook for paying your agent out of your own pocket. Or, you can only look in developments that do honor buyer agents, they are always upfront when asked.
TorFed is offline  
Old 02-11-2015, 10:42 AM
  #18  
Senior MemberCaptains Club MemberPLEDGER
 
Join Date: Aug 2005
Location: TN
Posts: 4,792
Default

Originally Posted by Cousin Eddie View Post
The problem with build quality is competitive advantage/disadvantage. It's not that the builders don't know how to (or want to) do it right, it's that until you get into the far upper end of the market, the return for doing so just isn't there. I'm in the industry so I see it daily. It's sad, but what are you supposed to do when the client has two other builders promising the same house with the same quality for $50k less or more options and features? I had a buddy who built his place the right way and spent the extra cash on the internal stuff that you can't see (upgraded subfloors, plywood sheathing, higher quality materials, etc). It was a great house but he lost his ass when he sold it and it took 2 years to sell because you could buy a place that "looked" identical for a fraction of the price just down the road. When it comes down to making the sale, the homeowners all key in on the multi head showers, upgraded kitchens, 70" TV above the fireplace, wine cellar, etc., but very few ask about the depth of the footings, the type of sheathing, quality of the roofing material, etc. Try telling your wife that she has to downgrade her kitchen options so that you can add a layer of plywood under the siding. Builders build what sells, homeowners buy what they can show off to their friends, and build quality takes the backseat....
Agree 100% however my situation was a bit different. He had lived in the home for 8 years so the assumption was he built well if he had planned to stay there.

Plus not talking as much about underlying structure I'm talking about hidden junction boxes, bare wire mudded over behind bath light fixtures, etc.
redneck joe is offline  
Old 02-12-2015, 07:50 AM
  #19  
Senior Member
 
Join Date: May 2014
Location: High Point, North Carolina
Posts: 716
Default

Originally Posted by boatruptcy View Post
You always pay the realtor, even when you're the buyer. I don't mean you technically write the check for the commission, but his/her fee is built into your purchase price...period. I built new homes for ten years and have bought countless properties and foreclosures. I had a price that I had to get for the home, knew where I wanted to be and that price was different if you had a realtor or if you bought from me directly.

Same thing goes when buying a used house. If you can find what you like and go directly to listing agent with your offer you're better IF the listing agent isn't greedy and understands that they aren't chopping up their commission with another agent and takes a point off their side to make the deal work. Most realtors in my expreience won't do this and after an offer is made and they refuse to work, I would just bring in my buyer's agent and they went from making 6% to 3%.
Exactly. If there's already a Realtor involved, then not having a Buyer-Agent isn't going to get the price lowered.

The issues I found with the big builders were a) they frequently hire brain-dead construction managers who don't know how to do things right, which is why you watch every thing they do, b) they often hire careless subs who often don't know how to do things right, and c) they often go out of business and the same folks start a new corporation with a similar name so they can't be sued later for defects in structures built by the earlier corporation. Make sure it's done right. Demand that your questions be answered and work be done to your satisfaction. There'll still be something later they did wrong that you didn't anticipate, but that's life.

People chafe at regulation, but stronger building regulations would remove the disadvantage that small quality builders now have.

Plywood, yes. OSB needs to disappear from the face of the planet. But then, my sister-in-law's house had cardboard for sheathing. I guess OSB isn't the absolute worst thing they use. My house has polybutyl plumbing. Time bomb that was installed the very last year it was allowed. Apparently my water isn't has incompatible with it as some, but I know it's coming.
DriveDog is offline  
Old 02-12-2015, 07:54 AM
  #20  
Senior Member
 
Join Date: May 2014
Location: High Point, North Carolina
Posts: 716
Default

Originally Posted by TorFed View Post
As an agent, I have to advise this. Be aware, that if you hire a buyer agent, and purchase a home from a builder who does not honor a buyer agent commission, depending on the terms of your agency agreement, you can be on the hook for paying your agent out of your own pocket. Or, you can only look in developments that do honor buyer agents, they are always upfront when asked.
Interesting. I would expect my buyer agent to advise me thusly.

My last one got me in to see a FSBO by negotiating a 3% commission with the seller based on a one-time showing, so at least in some areas, even FSBOs aren't out of the running.
DriveDog is offline  

Thread Tools
Search this Thread