New Homes Tips

When buying a new home many buyers are tempted to avoid hiring a real estate agent and instead try to do their own negotiations directly. They think they are saving themselves money by doing this. Don't believe it. Better yet, don't repeat the mistake by doing it yourself.

It is a wise move to engage the services of a real estate agent when purchasing a new home. Professional real estate agents have many years of experience buying and selling houses. Because of this experience there are many pitfalls they know to avoid. Many real estate agents have experience dealing with builders and developers. That experience can save you a costly mistake.

Consider the case of Dick and Jane (not their real names). Dick and Jane negotiated directly with a builder and contracted with the builder to build them a custom new house. The house would cost over $525,000 and would be located in one of the best parts of the United States. The contract called for progressive payments as the builder completed work.

When work reached the 90% level Dick and Jane made the progressive payment. They never saw the builder again. Wait, it gets better. Not only did the builder not finish the house but the builder didn't bother to pay the subcontractors like the electricians, plumbers and carpenters. So they all filed liens on the property and they won't finish the house until the back wages are paid.

Its not over. The mortgage bank wants Dick and Jane to make payments of $3,100 a month on a house they can't live in. Because of the liens they can't sell the house until the subcontractors are paid.

Hire yourself a real estate agent who knows how to deal with builders. Hire one that knows how to get you a bond to complete the construction and pay off subcontractors when something like this happens.