Pro Tips on How to Buy New Home in McLean VA, Vienna VA & Around Northern Virginia
If you’ve already started shopping for your next home, you may have noticed that McLean VA, Vienna VA and other Northern Virginia communities are bubbling over with options for new homes. With the introduction of developments and builders offering endless options, you can buy new home of your dreams. buy new home in mclean va, new homes in vienna va
While the idea of picking out every element of new homes and being the very first owner is appealing, the thought of buying a new home that only exists on the builder’s blueprints might be a more daunting endeavor than buying an existing home. It takes a certain leap of faith to plunk down a sizeable sum of cash on a square of bare land based on the promise of a beautiful new home ready for move-in.
When searching to buy new home in McLean VA and Vienna VA, it’s important to keep in mind that there are significant differences in the process of buying new homes versus previously owned homes. b
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Who’s a Builder’s Agent? It’s a Realtor Who Represents a Builder not the Buyer
A home builder who is also a seller, often hires real estate agents or sales representatives who “sit the model.” These sales representatives spend most of their time in a sales office or model home.
The sales representatives must work according to the builder’s business policies and rules. They tend to mirror the builder’s right or wrong attitudes, expectations, and preconceptions.
The builders’ realtors have one product to sell—the model home and community—which often exists only on floor plans and subdivision plats. They must animate the builder’s product by selling the visible (or invisible) bricks and mortar house as a home and the future community amenities as a lifestyle.
The builder’s realtor, who you will meet at the model home office, will only have builder’s best interest in mind. The job of the builder’s agent is to get the highest price for the home the builder is selling.
Do I need to Hire My Own Realtor to a Buy New Home?
The answer is “yes”. Because the sales representative (aka builder’s realtor) at the builder’s model home represents the seller/builder, and agent’s fiduciary responsibilities belong to the builder and not you, it would be a good idea to hire your own agent who will protect your finances, your privacy, and your interests.
When you make the financial and emotional leap involved in buying new home, the advice and experience of a loyal real estate professional often makes the difference between a successful satisfying outcome or a clouded result that compromises future enjoyment of living in a home.
“The best part is that the builder (aka the seller) is responsible for ALL real estate commissions in a home sale, so working with real estate agent won’t cost you a thing!”
Your realtor will not only monitor all transaction details, negotiate on your behalf with expertise in new construction homes, oversee home inspection and offer the pros and cons, but will be your biggest advocate and an expert who will be looking out for your best financial interests.
Do Your Research on the Potential Builder
With the large number of builders in Vienna and McLean, it’s important to make builder research a priority. What do you need to know about a builder, and how can you go about gathering the information? Start by searching online for reviews, testimonials and any public information regarding legal troubles or poor construction quality.
You may even go as far as walking through one of the neighborhoods completed by the builder and talking to the home owners.
But often your agent will be your primary source of information. An agent has an “inside scoop” and knows builder’s reputation and quality of work.
Take Earnest Money Deposit (EMD) into Consideration
When purchasing a home that is a resale, the earnest money deposit (EMD) is typically 1% of the sale price, while new homes’ EMD requirements hover around 5%.
It’s very important to learn about the builder’s EMD refund policy and the consequences of backing out of the deal. For example, the builder isn’t responsible if the buyer realizes later that the home will be un-affordable.
Be Creative with Price Negotiations
When buying a resale home, the asking price is usually just a starting point for negotiations, and, often, an offer acceptance may turn on the seller’s emotional connection to the buyers—“we’ll love your home as much as you do.”
However, builders typically don’t budge much on their prices – they are not like regular sellers, and incremental, back-and-forth negotiations and emotional appeals are not part of new home sales. Builders don’t like to reduce their sale prices, because it sets a precedence for future home sales.
Builders want the buyers to have good experiences and love their new home, but it’s builders’ business, and unlike the existing-home sellers, the builders have no emotional investment and decisions to negotiate the price or offer extras are based on the bottom line.
Pro Tip: Do not expect to save money through price negotiations or changes in sales terms. A creative way to negotiate the sales price is to focus on obtaining value-adding features and amenities at cost. Builders would rather offer concessions like upgraded appliances or finishes as opposed to reducing the sales price.
What You See Isn’t Always What You Get
In most cases, the listed prices of new construction homes posted online represents the pricing of a base or standard homes and not a Model Homes available for your tour. Often, the Model Home reflects a mix of standard materials and fixtures, as well as a handful of significant upgrades.
Pro Tip: It’s critical to ask for the list of options and upgrades installed in a Model Home along with the costs for each property shown. If a list is not available, make sure that builder’s representative points out options and upgrades and provides pricing information for each.
Read The Fine Print
In the State of Virginia, there is no standard builders’ sales contract that was developed and approved by the Virginia Association of Realtors with buyer’s interest and protection in mind. A builder is in full control of developing a home sales contract.
A contract serves to define the relationship and expectations for both the builder and the buyer. It states what the builder will do, when, how it will be accomplished, and the cost.
Not surprisingly, builders’ boilerplate contracts tend to be weighted in their favor – contract’s clauses tend to offer more protections for the builder and spell out consequences for the buyer if there is a contract default. But that doesn’t always mean that the builder is out to take unfair advantage of the buyer. The builder’s sale contract contains numerous schedule and budget hedges as protection against unforeseen contingencies.
Pro Tip: Make sure that your agent requests builder’s sample sales contract for preliminary review. Take your time to go over the contract and ask questions. Your primary concern is whether you get what you paid for. If the contract seems excessively one-sided or inflexible, you must decide to accept or reject the builder’s position.
Consider an Independent Home Inspection
Just because your home is brand new, it doesn’t mean a home inspection is unnecessary. While it is good to show confidence in the builder, you should consider the importance of arranging independent inspections to be sure the job was done right.
Qualified and reputable builders welcome an independent inspections, because it affirms their work and protects them from potential liability.
In many cases, the builders of new construction homes will allow buyers to conduct an independent inspection and agree to repair code compliance issues, but do not include a provision that would allow the buyer to walk away and retain their deposit if they are not satisfied with the result of the inspection.
Questions to ask: Does the buyer have the right to enter the premises during construction for the purpose of inspections? Can the buyer arrange inspections by independent inspectors?
Understand Builder’s Warranty
Avoiding repairs and maintenance is a major advantage to buying a new home. Buyers often expect perfection, but very few new construction homes escape all problems. It can take a year of living in a new home and experiencing all of the seasonal changes to put the home and all its new systems to the full test.
Question to ask: What type of home warranty builder will offer and what company will perform needed repairs.
Understand the Cost of Options and Upgrades
It is a common practice, even with spec builders, to give buyers an opportunity to make personal choices on almost everything that goes into the home, such as flooring, wall finishes, countertops, appliances, patios and decks. The home purchase often includes a free consultation in the builder’s design center to help the buyer make their personal design choices.
But even a “free” upgrade package may require a substantial deposit or prepayment. Everything has a cost and, since options and upgrades involve individual tastes and special orders, the builder doesn’t want to be left with materials and choices that can’t be undone if the transactions doesn’t close or the buyer has a change of mind. In addition to an earnest money deposit, the buyer may be required to pay up front even for included upgrades.
Pro Tip: Make sure to ask about builder’s procedures for dealing with a last-minute design change or a shortage of materials. In some instances, when builders are unable to obtain exact materials described in the contract, they reserve the right to choose materials of similar design, pattern and color without buyer’s approval.
You’ll Need to be Patient
If you are not buying finished spec home, be prepared for a waiting period. In most cases, the contract on the purchase of new home will not have definite settlement date, so you’ll need a few contingency plans if you’re selling your current home or wanting to move in quickly.
The builder reserves the right to complete construction in a year or longer. And while the builder will likely give you a rough date for expected completion, delays can be caused by weather, the availability of building materials, unavailable subcontractors, and other circumstances beyond the control of the builder.
Be Sure to Budget for the Extras
Often times, when you purchase a resale home, a previous owner will leave behind certain appliances, curtain rods, closet shelving and blinds. Since a Model Home you’ve seen during your tour was staged by a professional designers with every detail in mind, it’s important to remember that your new construction home might not have everything you expect.
At the settlement, you will get a bare home with basic builder’s paint and no curtain rods, blinds, ceiling fans or chandeliers. While waiting for your home to be finished, make sure to set some money aside for those extras.
Pro Tip: Ask builder’s representative if they offer special deals and coupons for furniture, paint and blinds’ companies.
Always Conduct a Final Walk-Through
During a walk-through, the buyers, sales representative, construction superintendent, and your real estate agent do a detailed tour of the property and develop the punch list of everything that needs to be done before the closing.
Depending on the length of your punch list, you may walk through again to verify progress or completion of the work. If work remains, you may consider delaying the closing or negotiating a portion of the purchase price to be held in escrow until all punch list items have been completed. Never sign on the dotted line until all items are either resolved or addressed in writing. Your real estate agent should offer guidance on the process. b
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Deciding between an existing and new construction homes is all about preferences. Do you want to move in immediately or are you happy to wait so you can pick out every inch of your new place? While purchasing a new construction home brings its own challenges, a qualified real estate agent that is experienced in working with builders can do all the heavy lifting for you. Enjoy the process of picking out every little detail and making your home exactly what you want it to be.