It is the beginning of a New Year, and the tables have turned. We went from homes selling fast to now sitting and taking their sweet time to come off the shelf. Now before you think I’m here to talk to you about Mortgage rates and inflation, I want to assure you that is not where we are headed at all. This discussion is a very interesting one, and the goal is to help eliminate some New construction home stereotypes that have started to change drastically.
We have discussed buying a new home versus a pre-owned home,before, and I highly recommend you check it out. But in addition to past posts, as a Realtor myself, I have found some interesting changes in how the market operates when it comes to New construction homes. Here are some of the most interesting points.
Making an Offer
What does it mean to make an offer? It’s exactly how it sounds, you make the offer you think will get you the home. This will include the price, the conditions you require, closing dates and sometimes more. Making an offer does not always mean it is your best offer, but it is what gets the negotiation going between the Buyer and the Seller. For Resale homes, it is pretty straight forward, you can go back and forth until one of the parties finally accepts, or rejects the offer. Once it’s been rejected, all counters and negotiations are over. So now, let me ask you, have you ever heard of buyers making offers on new construction homes?......That’s what I thought. It’s a strange concept, but for years, builders have simply set their prices and buyers have simply bought them. But why is this? Why can’t you, as a buyer, make an offer on a brand new home? Especially if we are talking about pre-built homes, quick possession, spec homes and models. These types of homes are already built or being built, so the design and finishes have usually already been selected.
The biggest response I have had from this question from other Real Estate Agents, and from interested buyers, is plain and simply they don’t want to “Offend” the builder by making an offer below the price listed. What an interesting concept! We don’t mind making offers on Resale homes for lower than asking price, but when it comes to a newly built home, we are now scared to offend someone?
I hope we can take this stereotype and be done with it, because there really is no need for it. There are so many new construction homes in Ottawa that are sitting empty and ready to be moved in to. The builders are doing everything they can to spread awareness of the home availability they have, but until buyers come and make offers, these homes don’t go anywhere. And so what if the offer you make gets rejected? We don’t seem to mind offending a resale home seller, so why are we scared to offend a builder? The worst that can happen is they decline your offer, and you move on.
This is a tricky topic, because every builder is different. There are no rules on what they must or must not include in a new construction home. So if you are doing your research and scouting out various builders, it’s important to take note of what each one is offering within the price. For example, some new homes come with brand new appliances already installed for you. (YES PLEASE!)
Nothing worse than having to move heavy appliances into a new home! Others might have thrown in a bunch of upgrades like quartz countertops, a gas fireplace and the latest plumbing and light fixtures. It can be really hard to tell though, what exactly is a part of the deal until you either visit the already built home, or the specifications are listed in great detail and provided to you. In any case, you need to use this information to help with your decision when making the offer from point 1. Sure you can compare prices overall of one builder to the next, but until you really dive in and see what you’re getting for your hard earned money in each individual purchase, you might miss huge expenses that might have been worth the higher price tag in the long run.
Work with an Expert
Please don’t skip this part. I know what you are thinking, I don’t need a realtor to help me buy a new home. But, before you let that thought simmer any longer, I have to mention that this may have been true years ago, but not in this day and age. Want to know the biggest reason why? Because only someone you have hired to help you will be looking out for your best interest.
It’s their job to read the fine print, help you compare the prices and inclusions, and help make sure that you make the best purchase possible. It is in no way the Builder's responsibility to look out for you, nor should it be. They need to make sales and provide homes for consumers. Is there a fee to have an expert help you? Yes, but it’s included in the price of the home already in many cases, so you might as well take advantage of it.
So there you have it, a revealing of stereotypes connected to buying a new construction home. If you are in the market for a home, and especially if you have no Mortgage, a new home can be the most rewarding and perfect decision. All you need to do is talk to an agent you trust to help you do a bit of research of the areas you are interested in, check over what’s included in the price, and finally, MAKE YOUR OFFER! You might be surprised how many builders are willing to negotiate with you. ;) I know Park View Homes is a builder willing to negotiate. Contact their team today to see where your offer takes you.