Buyers Need to be Represented When Purchasing New Construction Homes
Yesterday, I received an email from a buyer. He just wanted to let me know that they would no longer need my services. He and his wife had bought a new construction home in Franklin TN. This is a couple that I had been working with for several months.
Needless to say, I contacted him to get the details. It appears that they were driving through the neighborhood and stopped in a model home. An hour later, they had a signed contract.
Our conversation went something like this:
Me: Did the on-site agent provide you with any comparable sales for the area?
Buyer: No, but I know we got a really good deal.
Me: What makes you think that?
Buyer: He told me so.
Me: You mean, the seller told you so?
Me: Can I ask what you paid for the place?
(He told me the price.)
Me: If you paid more for the property than the recent sales reflect, would you want to know?
Buyer: Why did I pay more?
Me: Unfortunately, you did.
Buyer: Well, is there any way we can go back and renegotiate the price?
Me: Sorry, you already signed the contract. Not to mention, you have lost all ability to negotiate because they already know you are willing to pay more. Did you make sure to get a home inspection contingency? This will give you the ability to walk away should there be any major defects.
Buyer: No, I didn't think it was necessary. It is new construction after all.
Me: What do you know about this builder? Does he have reputable references? How long has he been in business? Many of the builders in that subdivision have gone belly-up. What does his financials look like?
Buyer: I didn't ask. It never occurred to me to do that.
Me: What was your reason for using an on-site agent rather than contacting me? I thought you valued my opinion on these matters.
Buyer: I wanted to save myself some money and thought I could get a better deal on my own.
Me: How do you feel about that now?
Buyer: It sounds like it may have cost me some money.
At the end of our conversation, the buyer had some serious doubts about his purchase. It's unfortunate that he didn't use a buyer's agent. He could have avoided this situation.
New construction buyers think real estate agents are only in it for the money. They never stop to think that the on-site agent works for the seller and it's his job to get the best price for his seller. Buyers need to be represented when purchasing new construction homes. The best way to do that is go in with a buyer's agent.
Buyers often go in thinking if they don't have a buyer's agent the savings in commissions will be passed on to them. That isn't the case. Sellers keep that commission for themselves. The savings is never passed on to the buyer. Not to mention, the buyer usually pays more than he should because he doesn't have recent sales data to compare his purchase with.
Price is only one component of a contract. There are other things to consider like closing date, contingencies such as the sale of a home, a home inspection or financing. These items all need to be built into the contract to protect the buyer. Neglecting important terms could possibly lead to the buyer forfeiting his earnest money should he decide to walk away from the deal for any reason.
If you are looking to buy a Franklin TN new construction home, contact Tammie White of Franklin Homes Realty LLC at (615) 495-0752. As a buyer's representative, it's my job to make sure you don't overpay for the property and that the terms protect you should you need to reconsider your purchase.
Copyright@2011 Tammie White*Buyers Need to be Represented When Purchasing New Construction Homes*