Walking First-Time Homebuyers through the Building Process

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1 Page 1 of 6 Welcome Rebecca Guide to New Homes Saved Listings Saved Searches My Clients Guide to New Homes The Building Process Walking First-Time Homebuyers through the Building Process Walking First-Time Homebuyers through the Building Process By Drew Knight As more Millennials hit the market, many real estate agents are now seeking the right information to help first time homebuyers get through the building process. The process of selling a new home is more than just taking a client to a homebuilder and handing them off. In fact, a Realtor s job isn t done until closing day. Have you chosen a hands on approach to selling new homes? Learn how to walk your first time homebuyers all the way through the building process! While it may be a longer process than selling a new home, the rewards are well worth the work and your first time homebuyers will thank you and maybe even refer you to their home shopping friends. Here are five steps to help you land that stellar recommendation:

2 Page 2 of 6 1. Understand Your Involvement Level Before you even begin, it s important to find out just how involved your local builders want you to be throughout the process. In some cases, the builder will rely on you to guide the buyer through the process. Other builders may want to handle it themselves. I think the Realtor should take the lead from the builder or developer, says Tripti Kasal, vice president of sales for Baird & Warner, a real estate services company representing Deerfield, Ill. based homebuilder The Jacobs Companies. They all have different resources for educating the buyer, including design centers, building experts and designers who may explain the homebuilding process themselves. Durham, N.C. based builder Garman Homes invites their local real estate agents to get very involved with their homebuyers. There are a lot of steps and a much longer relationship to develop during new construction, says Allison King, vice president of Garman Homes. We want the Realtor to really be a worthy liaison between us and the buyer and help everyone navigate through the process and celebrate the milestones. 2. Get the Buyer Organized The next step, whether you ve decided that you need to be more hands off or not, is to simply advise your first time homebuyers to get everything organized. Consider every step, every document, and all financial matters that need to be taken care of. Definitely help them get and stay organized, says King. A list or checklist of expectations and what they ll need to be doing during the process would be very helpful: inspections, documents for lenders, predetermined meetings with the builder, etc. It s important to note that because the timeline is much longer in a new construction home, it might be easy to let some important tasks fall through the cracks. It s your job to keep your buyers on top of their game, especially during the quiet period.

3 Page 3 of 6 Because it is a longer time, agents need to make sure the buyer is watching the progress of the new property, Kasal says. There still may be time to correct certain concerns and it s the broker s job to say in touch and remind them to stay on top of the process. 3. Understand the Building Timeline Which brings us to our next point: understanding the unpredictability of the homebuilding timeline. It sounds obvious, but the building process is very complex, explains Kasal. There s a lot of moving pieces and I think sometimes a Realtor who s not experienced in the process might not understand the fact that there are certain timelines. For instance, extenuating circumstances like bad weather or a last minute change like an appliance upgrade could delay the process up to a few weeks. Helping your buyers understand the importance of their selections and understanding that certain setbacks can occur will be key. You can t predict the timing, Kasal adds. Even if the builder says the closing will take about six months, it could be five or eight. Agents should (inform) the buyer that this is a normal part of buying a new home and there may be some things that need to be tweaked or changed. 4. Play the Mediator When those setbacks do occur, it s important to play a fair mediator. While you may ultimately be representing the homebuyer, you ll also want to stay in the builder s good graces in case they open new communities near you in the future. If something goes wrong, preserving a working relationship while trying to mediate a resolution where both parties can complete the transaction is an important role an agent can play, says Bruce Ailion, an attorney and Realtor with RE/MAX Town and Country in Alpharetta, Ga. Thus, it s important to understand the basics of construction and to set expectations

4 Page 4 of 6 that minor complications are normal. It s very important for the Realtor to keep a level head and attempt to bridge the gap between the two parties so the relationship is maintained and both sides move forward feeling good, adds King. Though mistakes will happen more often than not, oftentimes there are already plans in place to fix them well before the client even becomes aware of the issue. 5. Understand the Closing Process If your local builder deems it appropriate, you may also be required to advise your firsttime homebuyers on the closing process. Before the builder can hand over the keys to your clients, there are a few other steps that need to be accomplished. Ailion offers the following tips: Review the contract with your buyer. Help them go over every detail as they reach an agreement. If your clients wants an inspection of their newly built home, advise buyers to hire a home inspector with both professional certifications and certifications in building codes. During the builder walkthrough, confirm that their work was fully completed and any punch list items have been addressed. Remind the builder to explain their warranty program, obtain warranties on appliances, HVAC systems and any other devices. Obtain a survey and help the buyer understand their property lines. Discover any HOA regulations and obtain copies of the neighborhood s covenants, conditions and restrictions. Help the buyer understand the settlement statement, what to expect, and what to bring to the closing. For further information, Ailion advises agents to check with local builders and homebuilder associations for training courses that teach agents about the homebuying process, managing expectations, construction stages and making home selections.

5 Page 5 of 6 Drew Knight is the Digital Content Associate for Builders Digital Experience (BDX). You can find him online at LinkedIn. Related Articles Tips to Explain the Home Building Process Looking for tips to explain the new home building process to your clients? Here s a bit of advice on setting up communication with your local builders, understanding the construction timeline and budgeting properly. Communication is Key to the New Home Building Process Selling a home that hasn t been built yet is different than selling a standing home. Here s what you need to know about the homebuilding process and why communication between you, the builder and your client is vital. How to Sell Newly Built Homes to Millennials Millennials the up and coming generation of homebuyers are not a homogeneous group. Making the sale to this tech and energy savvy segment of the population requires a lot of individual attention. Search For New Homes All New Homes Inventory Homes Enter City, Zip Code, School District or Community Name Min Price to Max Price Beds Baths Square Feet

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