Category Archives: Building Home

Building a Home – Do You Really Need a Realtor?

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So, if you’re having a home built, what are the consequences of not using a Realtor? I learned from experience, and I want to share my knowledge with others. Currently, I am a Realtor, so you may think that I’m biased. However in 1998 (prior to becoming an Agent), just like many of you, I didn’t use a Realtor when I had my 1st home built. I thought the person in the model home would look out for my best interests. Below are some real life examples explaining what can happen if you don’t hire a Realtor to represent you.

1. Pay too much for the house – Realtors are in constant contact with builders about special promotions that are going on. You may not believe this. But, I know a buyer that went to a builder, and the sales agent in the model home quoted a high price. However, the Realtor knew that the builder was offering a promotion, and the price was actually supposed to be a lot less. If the Realtor wasn’t there, the home buyer would have overpaid for the house.

2. Negotiate the Contract – One thing to always remember is that the sales agent in the model represents the builder, not you (the buyer). Therefore, their job is to negotiate the contract in the best interests of the builder. If you hire a Realtor/Buyer’s Agent, it’s the Realtor’s job to negotiate the contract for your best interests. In other words, the Realtor will negotiate the following: sales price, earnest money deposit, down payment assistance, financing options, etc. I know buyers who were told they had to use the builder’s mortgage company even though that mortgage company didn’t have the best loan programs. So, the buyers wound up getting a higher interest rate. They were told that if they didn’t use the builder’s company, they wouldn’t receive the special incentives (like free upgrades, builder paid closing costs, etc). A Realtor can negotiate for you, so you don’t have to use the builder’s lender.

3. Incorrect Options – Building a home takes several months. Everyone’s human, and we all make mistakes. Sometimes, builders make mistakes and put the wrong options in your house. When I had my home built, the builder put in the wrong countertops. In another buyers’ house, the builder put in the wrong bathtub, the wrong light fixtures, and there was a lot of standing water on the lot. Your Realtor will monitor the building progress, and the Realtor will notify the builder immediately if a mistake is made.

4. Incorrect Paperwork at Closing – Realtors know what type of paperwork should be at the closing. I know a buyer that had a home built, and during the building process, the paperwork changed. Specifically, the sales price was lowered. However, when they got to the Closing, all the original documents were there with the higher price. No one could find the new paperwork. The Realtor was the only person who had it. So, without the Realtor, the buyer would have paid too much for the house.

5. Incorrect Settlement Statement – Realtors go over this statement in detail to make sure it’s accurate. If you’ve never heard of a Settlement Statement, that’s the form that you’re given at the Closing. It lists all your closing costs, and it states whether or not you have to pay money or get money back at closing. Well, I can’t count the number of buyers I know that encountered incorrect Settlement Statements. For example, at one of client’s closings, the Settlement Statement showed that my client had to pay over $200, but in actuality, he didn’t have to pay anything. Luckily, I was there, and I noticed that one of the fees on the statement was incorrect.

Now, you know the benefits of using a Realtor even if you’re having a new home built. Now, you don’t have to learn the hard way. The best thing about hiring a Realtor/Buyer’s Agent is that it’s FREE (in most states). Why would you not want someone to look out for your best interests (for FREE)?

Building a House – Tips for the New Homeowner

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For the house builder, the experience may be ordinary and routine. But for a new homeowner, it can be an exciting and incredible experience. This usually leads to clashes although this is a good sign and shows your active involvement in the process. An experienced contractor or architect usually offers suggestions on how you can avoid disappointing mistakes that lead to unnecessary costs. Here are a few of them:

Understand the contract with the builder. – This is the all-important first step. The key is to make sure that you are getting your money’s worth. Remember, you are spending a considerable amount of money on the project. Make sure you understand all its provisions before you sign. Clarify anything that may seem ambiguous to you and any changes must be clear to both parties. This will save you a lot of headaches in the future.
Check the building code. – Knowing the provisions of the building code will give you an idea on what the finished house will be. At the close of your mortgage, require a proof of compliance to the building code. In some jurisdictions, a Certificate of Occupancy is issued. This will indicate at least minimum compliance with the building code and safety standards. You must realize that there are things in construction that are done a certain way and is unacceptable if done any other way such as the construction of the foundation and structural systems. Make sure that these things are done right. Do not let variables such as coverings and finishes distract you from focusing on the basic sound construction requirements.
Save on construction costs – Keep expenses in the right perspective. Paying a few dollars more, for example, for a quality material may not affect the overall cost of the house, anyway so why settle for a material of less quality? On the other hand, too much fancy stuff and gadgets may require you to compromise construction quality which may not be worth it. Make sure that every square footage counts as you are paying for it, used or unused.
Always be flexible – Unexpected problems may arise that may put you in a compromising position. You have to weigh each situation as to what you may have to give up. Although the contractors may be fully competent and know what they are doing, they will often give in to your request after giving their opinion on the matter.

Building a House – Things to Consider

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There are some things you need to consider when intending to build a new house. Taking care of them before beginning construction will minimize the problems you are likely to encounter in the future.

Land – Finding a suitable land to build your home on is an important first step. Compare prospective locations as to the following factors: exposure to sunlight; availability of utilities such as water, electricity and telephone; road access; zoning regulations; wind and weather conditions; drainage system; size of the land; and others.
Location Plan – Secure a site or location plan on the land you are considering building your house on. This will help you identify the available roads, outbuildings, power and water lines, and septic systems. Make a map on the property; a surveyor can help you on this. Plan and decide on how to lay things out.
Preliminary Design – Initially prepare rough floor plans that will help you put together the various sections of the house. Factors such as privacy, approach and sunlight direction may be considered. Consider also the finished house in relation to the neighbors’ houses, the streets, and the zoning regulations.
Final Design – If you decide to hire an architect or a contractor to build your house, you must be involved in the design process. The final design will more or less give you an idea on how the finished house will be. All your specific requests and needs must be communicated with the contractor for consideration. This will eliminate, or at least minimize, changes once the construction starts.
Contract – Make sure that everything you agree on with your contractor is put in writing through a contract including the design, deliverables, cost, schedules and penalties. This will give you some form of security in case of delays and failures to deliver.
Materials – Once the building plan is done, review the bill of materials. Make sure that they conform to the agreement as to the quality and cost. Check for any substandard materials or those included in the bill of materials that are not necessary.
Financing – Secure a bank loan to finance your home building project. Usually, the bank will require the presentation of the building plans, cost estimates and bill of materials. Proof of capacity to pay will also be required.
Building Permits – Before beginning the construction, necessary permits must be secured such as building and safety permits. Usually, securing such permits is part of the services to be provided by the contractor.