Do you need a real estate agent to buy a new house? Episode #206

Hello! Welcome to Todd Miller TV. I wanted to do an update about new home sales and if you need a real estate agent to go to a new home sale. So if you’ve ever been to a new home track you probably realized that they have a person in there, and when you walk in they usually male you sign in and let you go see the model homes and then if you want you just tell them I want to buy this one, you pick the lot, you pick your upgrades and you get through. So, you’re probably saying “hey wait a minute, what do I really need an agent if I’m gonna go to a new home track?” So, it’s a really good question. And the answer is that you don’t have to have one. Actually you don’t have to have a real estate agent to buy any house. You could just go see a sign and then go call that agent who’s the listing agent and buy the house from that agent. Just what like regular sales, so you’re probably saying “well what’s the benefit?” So we’re talking about some of the benefits of having an agent. Okay so, benefit number 1 is: There’s no cost. So that agent’s gonna get paid a commission for going in there and then they’ll represent you and do a lot of work for you. So you’re probably be saying “well, I don’t really need representation because you know.” Well the truth is you do! And this is why, that person that’s working in the sales office, they work for the seller. Meaning, their job they have to make certain quotas and goals and make sales in that office, okay? So all they care about is selling you a unit. They don’t care who they sell it to so, you may or may not get the right information about the unit, they may say something they’re not supposed to, they may try to “oh yeah,” whatever promises they make, they’re gonna talk you into it, they’re all gonna tell you everything good, they’re not gonna tell you anything bad. Okay? And I’ll give you an example, we took a client to a new home subdivision and they filled out all the paperwork and then they got this disc that held the HOA rules and the person said to them “As soon as you sign this, you’re committed, you have to buy the house, you can’t get out, or we’ll take your earnest money deposit.” And they signed it and I was there and I said “Actually that’s/in front of the sales person and the offices, to them That’s not true!” Actually by Law you have 5 days to review the HOA. If you don’t like it, you can cancel it and get your EMD back for any reason. And the person in the sales office was adamant “that was not the case, that doesn’t apply to new homes whatever” The truth is, it does! It applies to any purchase of a home. In an HOA you have to have that. So this person wasn’t getting good advice. They were basically being told something that wasn’t true by that person in there. So you have to be careful about that. Okay. The next thing is, to be careful of is if you have a house to sell first, a lot of times you can’t buy on contingency. Meaning you can sell or go under contract by the house but only go for the transaction if this house sells. ‘Cause a lot of times they won’t do that. They’ll say “no, it’s not contingent, if this house doesn’t sell and you don’t close, you’re gonna loose your earnest money deposit. Sometimes you have to out down a lot more money for a 5,000-10,000 or whatever to get in those. The other thing is, they have Loan officers in there already; and be careful ’cause what happens is a lot of times those loan officers bump up the rate your gonna get because they feel they haven’t kept the value, it’s not competitive, sometimes the builder will incentivise you, “we’ll give you $5,000 of upgrades if you use our lender.” And the truth is, if they’re adding $10,000 of cost on the back end for them in loan fees and interest rates and it not all with the cost, sometimes it’s with the interest rate. So if your/they pay half a percent more, for $5,000 isn’t, you know, over the, ofcourse that loan entering way make up for that. Okay? So just be careful with that. Don’t be afraid to bring in your own lender and say “hey, I got a competitive quote.” So, and that’s something your agent should help you for his well/okay another thing is, keep this in mind that when you’re putting upgrades in the house, sometimes you charge a big premium; meaning, way more than you could get it done. I’ll give you an example, Toll brothers was building houses here and if you wanted upgraded flooring it was really expensive and I remember pricing it out. So I told this person in the sales office “hey look, we don’t want this flooring, we’re gonna have our own put in. So we just want the floors left there, and if we have the floors left there, how much money do we save?” And they said “Actually if we leave the floors there, there’s a plight of $4,000 cost for that.” “And I said “Really? Well that just doesn’t make any sense.” They said “No, it’s gonna be a cost to leave the floors there, it’s gonna cost you more money ’cause we already prepaid for all the stuff.” And I said “Fine, put in all the basic stuff. Basic carpet, basic everything, just basic basic, I don’t want anything in there not changing the flooring.” Because the flooring, when you get a big for flooring a lot of time, that includes the free removal of whatever’s down there. So rip up the carpet, tear up the linoleum, and put down the nice stuff. So, and you won’t know that unless you get a real estate agent, someone with some experience and expertise to sort of help you through that, okay? The other thing is, the person in the new home subdivision may not be telling you exactly what the future plans are like for example, they may start out with the big houses first and then later on they sell a bunch of small houses in the neighborhood. Well that could hurt you. ‘Cause if you buy a 3 or 4,000 sq.ft. house and then you know, 6 months later they’re building 2,000 sq.ft. houses that average sales price and that neighborhood’s gonna fall, it’s gonna hurt the value of your home, even though you have a bigger home. You wanna be the smallest house in the neighborhood or bigger homes is a general rule. And then you wanna avoid being the biggest house in the neighborhood. The most over you know, over done house in the neighborhood is typically not pretty good. But hey, last thing I’m gonna talk about\, Home Inspector. Yes I know it’s a brand new home but I guarantee you a home inspector will find things wrong sol this is my recommendation: You’re gonna get a final walk through, final walk through tells them I’m bringing my Home inspector with me. Have your home inspector do a full inspection of the house with them while doing their notes and everything he finds, have them fixed. We wouldn’t do a brand new house that was/it was brand new, the guy they freaked when we show up with the home inspector with the client, and they’re like, they were like “look, he can/we can by law have him there. We’re paying him.” Well he went up in the attic and found that the thrust that they used were twisted. They were physically twisted. He said “Hey look, these are/this things are twisted. You need to like put extra supports in there to keep/to hold them so that the roof doesn’t like collapse.” And the builders were not like really happy that they were just basically doing kinda you know, shotty work and the home inspector caught a bunch of stuff like that. So, anyway, bottomline is you don’t need a real estate agent to go buy a new home, you definitely go can hire one, the builder they’ll get paid the commission by the sales office and the seller sol you don’t have to worry about any expense typically out of pocket. And then, all the stuff I talked about, they should know, plus a bunch of some other stuff. I just want to cover like the biggest things because I know a lot of people go in, they buy they’re not represented, 6 months later they’re complaining about something an agent would have got. So anyway, that is my update for today and hope to see you on another video. Thanks!