Are you considering the purchase of a new construction home, condo or townhome in the Park City area? I’ve dealt with real estate for new builds a lot over the years, and I’ve come away with five tips and tricks to consider.
New Construction Pro Tip #1
Register with your buyer’s agent.
In the Park City (Wasatch Back) area, new home builders tend to have great relationships with outside REALTORS. (I have heard that in other locations, independent buyer representation is discouraged.) This is great news for new home buyers, as the builder’s agent represents the builder. Buyers should have their own representation by an experienced agent who can help them navigate the new construction process and potentially negotiate a better deal.
If you walk into or call a new home development, make sure you let the builder’s agent know you are already working with a buyer’s agent. Register yourself with that agent. I have had trouble at Park City’s golf course communities when my clients failed to do this.
New Construction Pro Tip #2
As the real estate market shifts, builders may be more open to negotiation. It never hurts to ask, unless you are in a multiple offer situation.
If you are purchasing a home in a development, you can imagine that the builder does not want to negotiate on price because that will destroy the comparable sales. However, it is sometimes possible to negotiate other items. I have successfully negotiated the following for my clients buying new construction homes:
- Credits for upgrades
- Credits for HOA dues
- Credits for golf club dues
New Construction Pro Tip #3
Ask about lender financing incentives.
Some buyers, especially first time homebuyers, are using every dollar of savings to squeeze into a new home. Some home builders work with a preferred lender or will otherwise be willing to offer the buyer a credit towards closing costs, decreasing the amount of money the buyer needs to bring to closing. With rising interest rates, some lenders are also offering temporary or permanent “interest rate buy-downs.” I have worked with buyers who received free appliances or other credits for working with the home builder’s preferred lender.
New Construction Pro Tip #4
Make sure you clarify the new home warranty during the due diligence process of the home buying process. Some builders insure with a third-party insurance company and provide the warranty as part of the sellers’ disclosures.
A Utah Supreme Court decision in 2009 recognized the implied warranty for new home buyers. In general, a one year builder’s warranty covers workmanship and materials for components of the home like windows, HVAC, plumbing and electrical. Appliances and other items are generally covered by the manufacturer.
New Construction Pro Tip #5
Get a home inspection once you occupy the property and begin a written punch list of items that need to be addressed by the builder. Get aggressive and get your buyer’s agent involved if the builder is not responsive.
I’ve written about home inspections for new construction here. Bottom line is that no new home is perfect. There are so many components that are part of the construction that tiny holes can create leaks, something may not have been fastened properly, and the list goes on. Do not depend on the county building inspection.
The advantages of buying a new home vs remodeling an existing home are many. I’ve written about that here. Most builders do not use the standard Utah New Construction Real Estate Purchase Contract and instead write their own contract which serves to benefit them.
There are a lot of moving parts with new construction and it can be a long process. It’s important to have an experienced advocate/buyer’s agent on your side to guide you through the process.