do i need a realtor when i buy new construction home? (Chicago: real estate, mortgages)

[carolmygirl]

my husband and i are in the process of purchasing our first Home. I need some inputs please. Although i have done a lot of research, i still have one big question,do i need a Realtor when i buy a New Construction Home? even if i plan to get a lawyer later on? and when is the best time to consult a Real estate lawyer???? need your inputs so much thanks

[Jimxo]

Originally Posted by carolmygirl

my husband and i are in the process of purchasing our first Home. I need some inputs please. Although i have done a lot of research, i still have one big question,do i need a Realtor when i buy a New Construction Home? even if i plan to get a lawyer later on? and when is the best time to consult a Real estate lawyer???? need your inputs so much thanks

No, but it may be a good idea. A Realtor can help you determine value, understand in and out's of buying a new home. Research the area and execute the sale.

If it's a small builder the same principles apply.

Good luck!

[chet everett]

I would be EXTREMELY reluctant to purchase new construction in almost any part of the Chicago suburbs at the present time.

The stock of existing houses in pretty much every price range and location is quite high.


That said, IF you feel YOU MUST buy in a new home development, or even from a builder that is smaller, I would spend A LOT of time looking at the existing houses and CASUALLY talking to the agents that are selling them. In your casual conversion you can sorta 'interview' them as to their experience helping people buy from builders, and if any mention that they DO have experience negotiating with builders that would be one to consider. You need to also talk to them about their knowledge of "defects" or "punch lists", how strongly they will advocate for YOUR INTERESTS in any contract with the builder, and their experience with either the exact builder, or in selling homes that have been recently built.

Similarly if you feel that the contracts for purchase are complicated enough that they should be reviewed by attorney it makes sense to talk to several WELL IN ADVANCE of getting to the point where you are going to sign ANYTHING. The key is that you want an attorney that KNOWS HOW THE BUILDERS PROTECT THEMSELVES and is willing to go to bat for you IN ANYTHING MAJOR OR MINOR -- lots of people have been burned badly by builders going BROKE, leaving half finished houses tied up in courts for months or years. You DO NOT want to end up like that!

[acdevane]

Yes, you should definitely use a Realtor. (I'm a little biased)

At the very least you should do your due diligence on the builder. In this market particularly it would be prudent to investigate how highly leveraged they are with other properties/lots. Whether they are currently building. Whether they stand behind their homes and whether they will even have the means to complete a home. In the current environment, I'd be cautious with the deposit. A local Realtor would be able to provide valuable insight.

In addition a Realtor would be able to assit you in structuring allowances for appliances, closets, lighting, landscaping etc. It would be a wise decision to use a Realtor, as they would be YOUR advocate and work in your BEST interest.

A good Realtor would also be able to recommend a good attorney that specializes in new construction.

[carolmygirl]

thanks acdevane! follow up question, as a first time home buyer, do we really need to put a downpayment?

[carolmygirl]

Thanks Chet and jimxo!

[vandre]

Originally Posted by carolmygirl

thanks acdevane! follow up question, as a first time home buyer, do we really need to put a downpayment?

Yes, you need a down payment. FHA loans have a lower downpayment requirement, but you still have to come up with at least 3.5% down.

If you are a first time homebuyer you can use the 8,000 as and *additional* downpayment above the 3.5% minimum

According to official HUD rules, you can now use the 8000 tax credit for your down payment - but only after you have paid the initial 3.5% down payment on your own. In other words, you can’t use the 8000 tax credit for the first 3.5% of the down payment, but if you wanted to use the 8000 tax credit for a down payment over and above the 3.5%, you can.

FHA Borrowers Can Use The 8000 Tax Credit As Additional Down Payment | Gold Country Homes

California Home Buyers Can Now Use 8000 Tax Credit For Down Payment and Closing Costs | California Mortgages (http://wannanetwork.com/californiamortgages/2009/05/31/california-home-buyers-can-now-use-8000-tax-credit-for-down-payment-and-closing-costs/ - broken link)