3 Mistakes to Avoid When Buying a New Construction Home

When you buy a new construction home, there are three main mistakes you should avoid:

1. Not hiring a real estate professional. A lot of times there is room for negotiation when you buy new construction - if you know where to look. For example, we have a client who just went under contract and the home is halfway built. I was able to get them $20,000 off the asking price and a $5,000 credit for blinds. There are many nuances in the new construction contract, and you need a real estate agent by your side to negotiate price, terms, and conditions.

2. Not doing research. You need to research the property and the surrounding environment. A lot of new construction homes are in underdeveloped areas; it’s important to know what kind of infrastructure will be going into that area over the next three to seven years. You should also know how that will affect your home’s value and its sellability in the future.

3. Neglecting Paperwork. New home builders have their own contracts instead of the standard California Association of Realtors contract. I have a client who has a new construction contract with 164 pages. There is a lot of fine print to go through. Luckily, I noticed that this contract would have required the buyer to pay $3,000 in closing costs and was able to save them that money. Again, that’s why you need to hire a real estate agent - to catch things you might not know about.

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A real estate agent will guide you through negotiations and mountains of paperwork.

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If you have any questions about buying new construction or about real estate in general, give me a call or send me an email. I would be happy to help you!

5 Steps to Win a Bidding War in the Sacramento Area

There are five easy steps toward making your offer more desirable and winning a bidding war:

1. Write a letter to the seller. Almost everybody loves their home, so when you compliment the seller on things like the decor or the lighting fixtures, you build a rapport with them that resonates far more strongly than simply writing an offer.
2. Include proof of funds in your pre-approval. Show them that you have the cash for your down payment. This will establish your seriousness far better than a lender writing a pre-approval letter vouching for a loan.
3. Make sure your purchase offer is detailed and complete. It’s your agent’s job to verify that all of the information on the offer is filled out completely, including things like the listing agent’s name, office information, phone number, license number, and brokerage number. This proves to the agent representing the seller that you’re going to do the work that you’re responsible for, and that they won’t have to worry about it. 
4. Forget lowball offers! In this market full of multiple offers, a lowball offer might not even be addressed at all. I always advise my clients to write their offer at a price that they feel comfortable with. Decide what your sweet spot is and put your best foot forward.
5. Shorten the contingency period. An inspection contingency, for example, usually takes around 17 days, but it shouldn’t take that long. You can shorten it to 10 and show the seller that you’re serious and want to take the next step into the escrow process. 

If you have any questions or any other real estate needs you want brought to my attention, just give me a call or send me an email. I look forward to talking with you soon.

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Decide what your sweet spot is and put your best foot forward.

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