Home Buying Guide

New home communities are more popular than ever! With good reason – new home builders are using popular, open floor-plans, including appliances, sod, and blinds, and helping make it easier than ever to get into a new home with little or no money. New home transactions typically seem a lot easier, as well. If a buyer chose to, they could get through a new home transaction without contacting anyone except the on-site sales agent! However, this would open you up to HUGE losses. Take these simple steps to protect yourself in a new home transaction, and to ensure that yours is a success.

1. Use a Realtor Who Has New Home Sales Experience Many people think that they can save money by not using, or don’t need the services of a Realtor when buying a new construction home. This couldn’t be further from the truth! New homebuilders typically try to monopolize a transaction – they only give you their attractive incentive packages if you agree, in writing, to use their lender, their title company, and sometimes even their insurance company! A Realtor will walk you through the transaction and will make sure that you’re protected every step of the way. If you’ve agreed to use the builder’s lender, your Realtor will make sure that you get a fair interest rate & fair closing costs. Your Realtor will know what the industry standards are, and will make sure that the builder doesn’t try and stretch beyond these. And best of all, a Realtor with a lot of new home transactions under their belt will have established relationships with your homebuilder. Because of this, the homebuilder will be on their “best behavior.” The homebuilder doesn’t want to run the risk of getting a bad reputation in the Realtor community, who can potentially bring the builder lots of homebuyers in the future.
2. Don’t Sign ANYTHING Until You’ve Worked Out Every Detail of the Sale Buying a home can be very emotional – and it should be. You’re not simply picking out a house; you’re picking out where you’ll spend the holidays next year, where your parents will come visit you, and where you might raise your children. However, the on-site sales agent will try and play on this emotion and get you to “write up the contract so that no one else can get your house.” That’s just fine, as long as you understand what you’re signing, and everything is okay with you. Just remember – no matter what is said, everything will be done as it is outlined in the contract.
3. GET A HOME INSPECTION!!! Most people who buy new construction homes don’t bother to get a home inspection. Most new homes come with a one year “bumper to bumper” warranty that includes everything, and many homebuyers feel that they can find out if there are any construction flaws during those 12 months. The problem with this mindset is that many problems won’t surface until well after the 12 months. Remember, your home was built by humans, and humans make mistakes. And, no matter how much experience and reputation a builder brings to the table, it’s still next to impossible for that builder to double check every part of the job their subcontractors have completed. A licensed inspector will go through a very thorough checklist to make sure that everything has been accounted for. At the very least, get an inspection so that you can sleep soundly at night, knowing that an independent third party has given your new home their stamp of approval.
4. Don’t Agree to Use Their Lender Production builders (builders who can develop whole communities on their own) are now large corporations, many of them traded publicly. The corporations have realized that there is much more money to be made than simply selling you your new home – they’ll also try and sell you a loan. Builders will offer HUGE incentives to get you into your new home, sometimes up to 15% of the value of the home. However, they will typically put one BIG stipulation on those incentives – that you use their lender. There are many problems that will come up when you pigeon-hole yourself to one lender – higher rates and higher closing costs are the two biggest. The on-site sales associates will typically tell you that their hands are tied, you have to use their lender to get the incentives. I can tell you, from experience, that this is seldom the case. Remember, the builder’s job – first and foremost – is to sell homes. If you refuse to sign on the dotted line unless this stipulation is removed, you will be successful – most of the time. There are rare occasions when a builder will lose sight of the fact that they build and sell homes – and will absolutely insist that you use their in-house lender. In these circumstances, walk away, no house is worth taking a bad loan and paying THOUSANDS more for that house in the long run.
5. Research the Builder
   Most builders are “good” builders. They take simple steps to protect their neighborhoods. Research your builder, or ask your Realtor if your builder takes these simple steps to make sure that your neighborhood won’t instantly go down in value:

   1) Limit the # of investor purchases – this makes sure that the neighborhood doesn’t turn into a “rental” neighborhood & allows the “pride of ownership” to shine through.

   2) Continues to build equal or greater value homes in the same and surrounding neighborhoods. Builders who avoid doing this create a “vacuum” in home prices and instantly devalue new home purchases.

6. Choose Your Appraiser You’re going to pay for an appraisal one way or another! The lender will require that you have an appraisal in order to loan you the money for the home! Additionally, most appraisers charge about the same of money for the service – so why not choose your appraiser? Ask around until you’ve been referred to a good appraiser and request that they perform the service. Ask for a copy of it and read it! Call your appraiser if you have any questions. This will give you an in-depth knowledge of the market area – and it’s something you would pay for, regardless!
7. Research City Plans New neighborhoods are typically on the outskirts of town – the land is readily available and less expensive, which means that you can buy a bigger house for the same amount of money. In these outskirt communities, it’s very important to know what the city has in store in the way of roads, zoning, public transportation, parks, and schools. These factors will dictate whether your new neighborhood will become the next “big thing,” or the next “cheap thing.” If you’ve decided to use a reputable Realtor, your job will be easy! Simply ask your Realtor and he/she will be able to provide you with lots of information about city plans that have been approved, and city plans that are still being talked about.

Eric Bramlett Austin Texas Real Estate is Broker/Owner of One Source Realty Austin Texas Real Estate
in Austin, Texas. He has seen considerable success in real estate, and looks forward to many more years in the business. Eric currently invests, renovates, and develops real estate in the Greater Austin Texas Market. He spends his time working with select clients, helps his new agents get started in their real estate careers, helps his experienced agents progress their careers to the next level, & when he has time…he takes his dogs to the lake.

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Purchasing a home is a big step, and a big decision. The average person spends around 1/3 of their income on their home. The home that you choose has a big impact on your life, and can have a big impact on your finances, as well. It always surprises me when Buyers attempt to “go at it alone” because of the possibility of mistakes. A good Buyer’s Agent is invaluable to a Buyer, and can be the difference between a wonderful transaction, and a nightmare.

1. Full Access to the MLSThe Multiple Listing Service (MLS) is a powerful tool that only Realtors have access to. When listing agents market a home for sale, they typically allow any Realtor to present the home to potential buyers, and to present contracts for purchase. The MLS is a database of all homes listed by Realtors, and represents roughly 99% of the homes for sale in any given market. As technology advances, so does the MLS. It has evolved into an extremely powerful search engine that allows your buyer’s agent to enter in search criteria, and returns only homes that match those specific parameters. Buyers can find a lot of this information online through IDX feeds available on many websites, but this information is a “watered down” version of the MLS because the IDX search engines aren’t quite as powerful, and don’t return as detailed profiles as the MLS.
2. Maximize Your TimeWhile driving neighborhoods is an excellent idea to help you decide which locations you prefer, it’s not a very efficient way to find your new home. Gas is expensive, and your time is valuable. Your Buyer’s Agent will listen to your needs, make fantastic suggestions based on your likes & dislikes, and provide you with a list of homes that ALL match your wants & needs. Your Buyer’s Agent has helped MANY new homebuyers through MANY purchases, and will help you better organize your search & decision making process – saving you valuable time.
3. RepresentationListing Agents enter into legally binding agreements that require them to ALWAYS act in the best interest of the seller. They are the seller’s “coach” and will make sure that their clients’ best interests are looked after. Luckily, your Buyer’s Agent is there to make sure YOUR best interests are accounted for. With your expert Buyer’s Agent in your corner, you can rest assured that you’re on, at least, even ground with the home seller. A football team would be at a pretty significant disadvantage without a coach – just as you would be without a Buyer’s Agent.
4. Negotiating PowerThe MLS maintains a record of, not only all homes listed by Realtors in a given market, but also the sales price of those homes. Your Buyer’s Agent will run a Comparative Market Analysis (CMA) to determine a prospective home’s Fair Market Value (FMV). In simpler terms, your Realtor will look at similar homes in the same neighborhood that have sold recently. This way, you will know whether or not the seller has their home priced fairly. If the home is priced over Fair Market Value, your Buyer’s Agent can present your “under asking price” offer with plenty of firepower – and a greater chance that the offer will be accepted.
5. ExperienceThe average person buys 3-5 homes in their lifetime. A good Buyer’s Agent will assist in 3-5 home purchases every month. What might seem complicated and intimidating to you is fairly common and familiar to your Realtor. Your Buyer’s Agent will know what to expect, and will know when to alert you if anything out of the ordinary occurs.
6. Industry ContactsIt takes a lot of people to close a real estate transaction – Buyer’s Agent, Listing Agent, Loan Officer, Inspector, Appraiser, Insurance Agent, General Contractors, and sometimes more! A good agent will come with a strong closing team that has performed in the past, and will continue to perform. A transaction is only as strong as its weakest link – with your strong Buyer’s Agent & their closing team, you can rest assured that you will have plenty of support.
7. Piece of MindIf you are like most people, your home is the largest purchase you will ever make. The average person spends around 1/3 of their total monthly income on their home. This is a big decision and you don’t want to go at it alone. When you use a trusted Buyer’s Agent, you know that your best interests are accounted for, and that you can feel confident in your purchase.

Eric Bramlett is the Broker and co-owner of One Source Realty in Austin Texas. Visit Eric’s Lake Austin Real Estate Guide, visit his Austin Real Estate company’s website, & his Downtown Austin Condo Guide. He has seen considerable success in real estate, and looks forward to many more years in the business. Eric currently invests, renovates, and develops real estate in the Greater Austin Texas Market. He spends his time working with select clients, helps his new agents get started in their real estate careers, helps his experienced agents progress their careers to the next level, & when he has time…he takes his dogs to the lake.

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