While distressed properties, like foreclosed houses, may appear to come with more problems and headaches, there are still plenty of issues with the opposite end of that spectrum - new construction.
Brand-new real estate can be extremely exciting and confusing for buyers, which means that the agents tasked with helping them have to be on the ball with every subtle nuance. Many people end up spending a lot of money on new homes, but there are a number of ways to save money and speed the process along.
What buyers should pay attention to
There is a major difference between new construction and previously-owned houses. There is no current resident involved in the deal, and negotiating is typically a little more straightforward. However, other aspects can get in the way of a smooth sale.
For instance, HGTV FrontDoor.com explained that the extra expenses of new real estate can add up. There are property taxes, insurance costs, furniture, landscaping and other maintenance fees that can skew the final sale price. As a result, buyers have to be aware of these and understand how much they'll really have to pay.
In order to help them along, real estate agents should make them weigh the pros and cons of new construction. They are often in rural locations, outside of major metropolitan hubs, according to FrontDoor.com. It will take a while for the yard to look normal, and trees take a long time to grow. Many neighborhoods all look the same, and privacy is often lacking. For some people, these may be positives or negatives, but it is worth taking the time to think about it.
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The price can add up fast
One of the biggest problems buyers may have with new construction is the price. Homes themselves are in great condition. They have fantastic features and are brand new and shiny. However, there are plenty of ways buyers can end up spending too much money, and real estate agents should make sure they understand the costs.
Bernice Ross, CEO of RealEstateCoach.com, wrote in an article for Inman News that cost overruns can make buyers spend a fair chunk of change. Items like the floor plan, exterior and finishes are all expensive, and in some cases these are decided on before the final price is heard. Then, cutting back and saving money is extremely difficult. Some builders even charge change fees, in addition to material and labor. Most importantly, buyers have to be aware of these expenses beforehand.
Besides building costs, some locations require a fairly substantial property tax, Ross explained. Cities want the added money to expand infrastructure, and this can take buyers by surprise. If they haven't budgeted for it, they might not be able to afford a home they previously thought they could. Therefore, great real estate agents should be upfront with clients about the ins and outs of new construction, so everything goes off without a hitch.