Who’s On Your Home Purchase Team?

As you embark on your new homebuying journey, you’ll find that you’ll quickly build a team of folks that will help you navigate the process.

From a builder’s sales and design team to your mortgage lender and other professionals, having the right people on your home purchase team will help make the process simpler, faster and more stress free.

The Builder’s Sales Team

Your builder’s sales team is your key to understanding your builder’s policies and offerings. Think of your new home salesperson as the quarterback of your team. He or she will guide you through the key steps to your new home (including purchase, finance, design and construction) from start to finish.

Your salesperson is a wealth of information and will explain the homes and lots offered, community amenities and much more. Count on these pros to clearly explain the steps in the process. They’ll help you understand the important and often predictable decisions you’ll make and explain the many features and benefits of your new home.

Your salesperson will also help you determine which home (often called a plan) is right for your needs, lifestyle and budget. He or she will show you the lots (sometimes called home sites) available to you. Many homes are designed specifically for certain size lots, so don’t fall in love with a home that won’t fit on your favorite lot. Your builder salesperson also has important expertise on the amenities (community centers, hiking trails, swimming pools and more) that many new home communities offer—and they have info at their fingertips on local schools, retailers and other important nearby businesses.

Your salesperson will also introduce you to the builder’s design team who can help you understand the many exciting choices of color and style you can make to personalize your home your way. Your salesperson may also introduce you to a builder’s in-house or preferred mortgage lender.

If you ever have any questions about your home’s progress or the next step in your new home journey, these are the folks you want to go to. They are your liaison to your builder and can help address any concerns you have along the way.

The Buyer’s Agent

While using a buyer’s agent isn’t mandatory for a new-home purchase, retaining one for your team can be helpful, especially if you’re looking at resale houses as well as newly built homes. Keep in mind that an agent is needed to access an existing home for sale. Shoppers can visit model homes and new home sales centers with or without a third-party Realtor.

If you decide to use a buyer’s agent, ask your Realtor to check with a builder. Many builders have policies on how real estate agents can register a buyer. Also keep in mind that price negotiations vary greatly when buying resale and new homes. A person selling their own home can have varying motivation and financial circumstances. A motivated homeowner may be willing to reduce their asking price.

Builders typically work from published prices for their homes (base price and the cost of options and upgrades) as well as consistent, published special offers and incentives. As a business, most builders price their homes based on the cost of land, labor, building materials, city and county fees and taxes and a profit margin. Most builders also seek to maintain consistent pricing. That helps homeowners maintain the value of similar homes purchased in the same community.

If you elect to use a buyer’s agent, factor this expectation around price negotiation into your decision. Third-party Realtors can be a good source of details about a property, its neighborhood, historical resale value, schools and more. A good buyer’s agent apprises you of that information, then doesn’t push you to make a decision outside of your comfort zone; a good agent helps you remove the emotions from the situation so that you can make an informed, thoughtful decision about what you’re willing to spend.

The Mortgage Company

While purchasers of an older home often use a bank or mortgage broker to obtain the best deal on their financing, shopping for a new home is a little different.

“Many builders work with a small group of ‘preferred’ mortgage companies who have agreed to offer special financing terms for their customers. Many of them also offer some closing cost assistance as well,” says Jeff Tunstall, president of CraftMaster Homes and builder of iStar Residential’s new Magnolia Green community outside Richmond, Va. “Builders use these lenders because they are both competitive and dependable, giving a high level of service to the builders’ customers.”

Because these mortgage companies are dealing with a high volume of customers in a particular new home community, they’re able to offer approval swiftly and at a better rate than seeking financing out on your own.

While there can be many advantages of using a builder’s in-house or preferred lender, take time to compare all of your options. And don’t forget to weigh the details. Your loan is complete package of features and be sure you’re comparing your options on an “apples to apples” basis. For example, with any lender, it may save you money overall to pay a one-time upfront fee (sometimes referred to as a point, which is equal to one percent of your loan) to buy down the interest rate. Your lender can help you calculate the pay-back period—how many monthly mortgage payments you’ll need to make—to earn back the upfront fee and start saving money on interest each month.

The Inspector

New homes are brand-new and typically the home itself and the products it contains are under warranty. New homes are also inspected by city and county inspectors, as well as by the builder. Many builders also schedule one or more inspections with each buyer at key phases during construction.

Resale homes are the reverse in most cases. When buying a used home, it’s critical to have a third-party inspect the home and estimate the remaining life span and the cost to repair or replace items that are currently broken or old enough to soon need replacement.

Some buyers may wish to pay for an independent, third-party inspection of a new home. If so, check with your builder. Keep in mind that the builder often owns the home during construction and is legally responsible for safety on the job site. Many builders will want to set an appointment for a third-party inspection and some builders may also ask to see the inspector’s license or credentials, as well.

Stephen Myers, a home inspector in Orlando, Fla., says that “when purchasing a new home, a home inspector will be able to assess a home’s condition including the identification of construction flaws and items left undone that should have been addressed during the punch list phase, which is when the builder is nearing completion of construction and they focus on a detailed list of items to complete.”

Myers and other home inspectors also offer value-added services beyond just an examination of your soon-to-be home, like “insurance inspections to help the homeowner save money on insurance rates and a home warranty.” Myers even goes so far as to offer “recall check service, which can be invaluable by notifying a homeowner that an appliance has been recalled. (The potential homeowner) can contact the manufacturer for repair or replacement.”

Click here to learn more information about whether you need a home inspector.

The Insurance Agent

While your new home is under construction, most local and national builders cover the cost of insurance (but not all — double-check your contract). But if you’re building a custom home on a lot that you purchased, you probably need liability coverage in case of an accident on property.

And depending on your contractor and architect’s level of coverage, you might also need to purchase builders’ risk insurance, which indemnifies against damage while a home is being built. A reputable insurance agent can advise you on what you need, then ease you into a proper homeowner’s policy once construction has wrapped.

Now that you know who should be on your team, you need to decide how to choose them. The good news? Builders can often recommend preferred providers.

Brian Brunhofer, president of Deerfield, Illinois-based Meritus Homes, sums it up nicely: “We have relationships with a number of providers who are well-respected and provide great service in these areas, so we typically give recommendations on these auxiliary services. If our customer uses one of those recommendations, it is great for us since we have confidence that those service providers will do a nice job and will communicate with us on status and any issues that arise.”

But don’t be afraid to build your own Dream Team; in the case of your home-buying team, their knowledge and trust are your most valuable assets.