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BUYING A NEW HOME FROM A BUILDER IN THE CHARLOTTE-MECKLENBURG MARKET Are you considering the purchase of a new construction home in the Charlotte-Mecklenburg or Union County areas? Although you may believe this process to be relatively simple and certainly less complicated than buying a previously owned home, a real estate agent still plays a critical role in helping to make your decision to build a success. Unfortunately, some buyers in the Charlotte market neglect to enlist the help of an agent, choosing instead to go it alone. In the end, a decision to forego using a real estate agent when purchasing new construction generally means higher costs in terms of time, money and hassle for the buyer. The biggest misconception about purchasing a new home in the Charlotte market is that you can save money by going directly to the builder and cutting out the real estate agent. The thinking being that the builder will cut their price by the amount that the professional real estate agent would be paid. In most cases, this could not be further from the truth. Since most builders make the majority of their sales through the real estate agent (by my estimates Realtors account for more than 70 percent of most builders’ sales in the Charlotte-Mecklenburg market) the builder strives to maintain a good working relationship with the real estate community. So, even if you choose to complete your transaction without the help of a real estate professional, most builders will not reduce their prices by the agents fee, in effect making their bottom a little healthier but leaving you with no representation in the transaction. One important point to remember is that builder representatives work exclusively for builders! At contract time, according to North Carolina law, they are required to disclose to you that they are agents for the builder, and, while they must still treat you fairly in the transaction, their allegiance is to their employers. On the other hand, real estate professionals work for you and for your best interest. They are committed to getting you the best price and the best value for your money. Choosing a real estate professional is, therefore, definitely to your advantage. Would you go to court with an attorney who represents your opposition? I do not think so! What do Real Estate Professionals do to Earn Their Fees? Real estate agents do more than simply show you properties, write contracts and collect checks. The process is much more involved than most consumers realize. In addition to their other responsibilities, agents perform the following tasks: 1) Walk the lots. The professional agent will walk lots with you and help you determine which lots are most suitable for your new construction. Your agent should advise against lots which would be difficult to sell if you decide to move. Lots that would be considered undesirable include those that have a big fall off and no backyard; lots that back up to a heavily traveled roadway; lots that are near or under high-tension wires; and lots in flood zones, etc. 2) Negotiate the best price. In some cases, real estate professionals can negotiate a final closing cost below the builder's asking price and can ensure buyers get the most incentive money and best programs the builder has to offer. 3) Review the contract. A real estate agent can review your contract to see if there is anything that you may want to consult an attorney about. 4) Advise. In addition to helping you select the best lot for your new construction, your agent can advise you on the best mortgages rates and home loan programs available. 5) Be present and involved. Real estate agents should be at all builder-client meetings, including the pre-construction meetings, pre-drywall inspections and pre-closing walkthrough. If you do not live in the Charlotte Area and cannot make one of these scheduled meetings, your real estate agent can act as your representative. The realtor also follows the building process through in your absence. 6) Make recommendations. Real estate professionals can suggest inspections that should be made during and after construction. Professional, outside companies that are familiar with county and state building codes can be a great asset to the buyer and can help pre-empt problems down the road. 7) Handle last minute glitches. A proactive and involved real estate professional can handle last minute glitches that may arise throughout the building process or in closing the deal. The purchase of a newly constructed home in the Charlotte Market is an exciting and rewarding process. Representation by a Realtor throughout the transaction will help make the process everything you want it to be. Using an agent costs you nothing, but it could mean the difference between having a great new home buying experience and just buying a home. For more information on new home purchasing contact Jim at Jim@jimbarnett.com and let me show you the value a Realtor can mean to you in the buying or building process. Jim Barnett, CRS Realtor/Broker Written 9/26/05
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