The real estate industry does a great job educating first-time homebuyers. There’s so much information out there, that no buyer should ever go through the process uninformed!
Buying a home in a new community in Southern Maryland – a home no one has even lived in before – is more than first-time homebuying on steroids, and sadly, the industry has left buyers behind when it comes to information and sharing knowledge about the process.
From the process of finding a home loan to choosing a real estate agent, buying a brand-new Southern Maryland home doesn’t have to be confusing. Here, we’ve answered two of the most common questions we get from clients who are thinking about buying a newly constructed home.
The preferred lender
Many potential new homeowners walk away from the model home tour thinking they have to use the builder’s preferred lender as a condition of the purchase.
It’s no wonder! Some builders’ representatives use carefully chosen language to make buyers believe this. In reality, nothing could be further from the truth.
The builder may require you to get loan pre-qualification from their preferred lender, but in the end, you can borrow money for your mortgage from whichever lender you choose.
The preferred lender will often offer good deals, though, such as offering to pay your closing costs or enticing you with a specific amount if you get your mortgage from them. Others will reduce the price of the home or throw in attractive upgrades.
It’s challenging to put these into monetary terms, so you may need to do some research. You’ll need a dollar figure to work with when you compare this lender’s offer to others. Incentives may mean nothing if not compared against other terms, such as interest rate and points charged.
You should go ahead and let the builder’s preferred lender pre-qualify you for a mortgage. You are in no way obligated to use their services in exchange for loan pre-approval. You’ll get a Loan Estimate that you can use to see how this lender’s offer stacks up against others. The Consumer Financial Protection Bureau offers a sample of the form, with explanations, on its website.
My best advice to my clients is to go loan shopping before you even set foot in a new home community’s builder’s office. You’ll have facts and figures in hand that you can compare to what the builder’s lender will offer.
Without this backup, there’s a good chance you’ll get swept up in the excitement of buying a new home – even falling in love with a model home – and your emotions will take over. If you’re armed with facts and figures from other lenders, you’ll be able to react logically rather than emotionally, and that’s always a good thing when you’re making a financial decision.
About the builder’s real estate agent
You’d never use the homeowner’s real estate agent when buying an existing house. It’s equally unwise to use the builder’s agent. The owner’s agent – whether a homeowner or a builder – has one overriding aim: To get the owner the highest amount possible for the home.
A buyer’s agent, on the other hand, wants to help his or her clients spend as little as possible for a home.
See how these two duties conflict?
It doesn’t matter how friendly, knowledgeable, and eager the builder’s agent is. You need your own representation. In fact, when you’re asked on your first visit if you’re working with a real estate agent, your answer should always be “yes.”
And, to be safe, we recommend that you have your agent go with you on the first visit. If that’s not possible, register your agent when you sign in.
Instead of having an agent with divided loyalties, you’ll have your own representative who will go to bat for you when negotiating upgrades and extras, guide you through inspections, and help you take care of all of the details of a real estate transaction.
Hughesville MD Homes for Sale and Real Estate Services in Southern Maryland. You now have a search engine to help you with your Southern Maryland home search! And I’m ready to provide you with a custom home valuation if you’re considering selling your home. Let’s connect to discuss how I can help you. Contact Kimberly Bean at 301-440-1309
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