Buy "Real Estate Experience" , for FREE
I was just about to write something to remind all of you out there in the Salt Lake Valley looking to buy a New Home|Condo that you need an experienced Real Estate Agent to work with you and for you.
Amy Hoak did it for me ( wrote & reminded ). In her Marketwatch article in the Sunday Salt Lake Tribune, she outlines 6 of the most common incentives being used to encourage Home-buyers to make that purchase now.
Amy is pretty much on target with her list, but as I read the article, I couldn't help but wonder about a couple of things. 1. Could the average Home buyer easily determine the actual value of the incentive being offered? 2. Would that average buyer be savvy enough to "get the maximum" when negotiating with a professional "Builders Agent"?
Lets Examine briefly the six incentives.
Reducing The Price
My least favorite as it tends to reduce neighborhood values, and on NEW CONSTRUCTION does not eliminate the Home buyers need for cash to close, landscaping, fencing, window coverings, or furnishings. If Builder upgrades are negotiated, your agent should have a good Idea about Builders mark-up so you don't let them deal with 50% dollars.
Paying Points
Ms. Hoak refers in her article to short term buy-downs, which I like only for specific needs. In today's market many Home Builders will consider buying blocks of money ( In some instances they already have) with lower long term interest rates. The Home Builder's Agent wont always tell a buyer as there is usually a limited amount of it and they know when its gone its gone. Your "Buyers Agent" knows what questions to ask.
Down Payment Aid
This is a good way for the Home Buyer to save cash for some other need (paying off credit cards). The tax ramifications of this versus Seller paid Closing Costs should be compared. Home Builders agents will probably negotiate so that benefits pass to his/her client. THE BUILDER.
Closing Cost Help
Seller paid closing costs have almost become a standard part of negotiations over the last few years. Some lenders place a limit on how much they will allow a Home Seller to contribute toward closing and some closing items are deductible so splitting up the incentives to favor the Home Buyer should be negotiated. Your Real Estate professional should be able to help you do that.
Home Warranty
Regardless of the Real Estate market, we encourage all Home Buyers to ask for a home warranty( we also ask Home Sellers to provide one)in the offer. It lets everyone sleep at night. An agent working for you, should evaluate the New Home Builders warranty to see if additional assurances are required, and possibly ask for an extended warranty. The REPC, ( Real Estate Purchase Contract ) provided by the State of Utah is not necessarily used by all Salt Lake Builders, so your Agent should review carefully.
Other
Other areas of negotiation available to an experienced Buyers Agent are limited only by the needs of the Home Buyer and our ability to "think out of the box". Plus of course our knowledge of how much a builder NEEDS to Sell That House.
The Bottom Line Is: You should have representation, it's available, and it's FREE. We work with most New Home Builders in the Salt Lake Valley so there is no reason for you to traverse this important decision alone. If you have a favorite agent call them. If not, and you'd like to see more of how to do this, click on New Home Construction, if it makes sense, give me a call. Corie 567-0946
Good Luck