Demand for housing has created opportunities for homebuilders — and many buyers love the idea of customizing and living in a brand new home. But supply chain slowdowns, material shortages, construction delays and complex contracts can cause some hurdles along the way. Here are a few ways you can help guide and prepare clients for the new construction realities of today.
Weigh the pros and cons with clients
First off — before you start the search process in earnest — make sure a new build is the right choice for your clients. Of course, it’s important to be understanding of their desires and goals, but your responsibility as their agent is to also be a resource and a strategic guide.
Discuss their financial parameters, outline their ideal move-in timeline, and when or if they will need to sell their current home before closing on the new build.
Get to know local (regional or national) builders and developers
Understand — as best you can — what shortages or slowdowns are impacting new construction right now. Things can shift quickly, so stay on top of the market. Consider building relationships with professionals at local new build communities to ensure you are up-to-date on the local market, restrictions, and zoning and permitting laws.
Another tip: Reach out to developers you respect, and ask for their insight on the construction-centric progress (and delays) they are currently experiencing. The idea here is to tap into the knowledge of folks who are dealing with this specific facet of the real estate market every day.
Speak with past and current developer clients
To help vet developers and homebuilders, it’s important to get first-hand feedback from those who have already been through the new build process with them. Reading online reviews is helpful, but getting in touch individually might yield more candid conversations.
The goal in seeking out current and past clients of a builder is to understand how they handled construction setbacks, roadblocks and design details. Were they helpful or rigid? What was the quality level of the result? The more you know, the better you can advise your clients when they’re deciding who to build with.
Educate yourself on the nuances of new build contracts
To best serve your clients seeking a new construction home, familiarize yourself with the nuances of local, regional, and national new construction contracts and understand how they compare to resale contracts. Broadly speaking, compared to a resale contract, a new construction contract will specify a number of specific dates and deadlines.
For example, there may be dates defined for when the buyer needs to finalize their design decisions, a date for when they need to have financing approved and a proposed closing date. Knowing these parameters will also help you guide your client in planning out the sale of their current home and interim accommodations.
Plan for interim housing
If your clients need to sell their current home before closing on a new build — as is typically the case — interim housing will need to be arranged. Building a new home can take anywhere from seven months to 12 months, so it’s important to budget for the cost of a short-term rental.
Helping a buyer prepare for the purchase and development of a new construction home is a nuanced task. As with any home search, it’s essential to do your own research in advance to best guide and advise your clients through every step of the process.