Working with builders in Charleston
One of my favorite aspects of working with buyers is the excitement clients experience when looking at new construction. I have helped many home buyers purchase new construction homes and I have worked with many different . For a few years, I specialized in new construction, with over 90% of my sales involving new homes. There is a lot to know about purchasing new construction. Yes, you can buy a new home without your own representation - but you probably shouldn't.
Have your own agent. Believing they might get a bet
ter deal, many buyers use the builder’s sales agent to "represent" them - or that is what they assume.
Agents for builders represent the builders only. This means that buyers who do not have representation via their own agent have no representation.
The comfortable feeling of a new home sales center and the friendly agents who are quite knowledgeable and courteous do not replace having a real estate professional looking out for your best interests. Be wise - have representation. It is free and it is important.
Having you own agent is free to you – the builder pays for our services.
Pick the right builder. Not every builder is the same and not every community is developed the same way. Investigate other communities that this builder has built in your area. Ask other people who have worked with the builder what sort of experiences they have had. Ask your agent about the builder because your agent has no loyalty but to you and should be willing to give you information about the builder that may be important to you. Ask about known issues such as lawsuits or publicized complaints. Google your builder.
Working with the builder is like a short-term marriage so is very important to know who you are choosing to go into business with.
Other things to consider
Resale is always an important consideration. You may be purchasing a home in a brand-new community with little if any resale history. There are ways to make a fair guess about how well your home will resell. Talk to your agent about this. Important factors include location, location, location - of course - and other issues such as the quality of the construction, projected area demand and supply, desirability of the particular home design, lot size and much more.
Builder’s contracts favor the builder and are different from our standard local real estate board approved contract. Builders usually require buyers to use builder pre-printed contracts. Have a real estate attorney review all builder contracts. Your real estate agent can help you identify qualified local attorneys.
Don't be surprised by property taxes. You will have property taxes, of course, but you may be surprised at how much they are. The actual property taxes can only be estimated as the current property taxes are 
based on the lot rather than the lot with a home on it. Developers can underestimate property taxes so it's a good idea to talk to your local taxing authority for guidance.
Have a home inspection done. Yes, new construction has the benefit of builder and manufacturer warranties that are not necessarily available for a resale home a purchase. Still, the value of a home inspection is clear for new construction as well as for a resale home. Avoid unnecessary headaches and know exactly what you are buying. A home is an expensive purchase so it is well worth having the eyes of a professional accustomed to doing home inspections give you their insight. Perform the inspection at least seven days prior to closing.
Models can be filled with every upgrade the developer offers as an example for buyers. Buyers should ask about how much the model costs as they see it. Typically, this cost is much higher than the advertised base prices for a development. Avoid getting awed by what you see in the model home. See beyond the illusion. Picture your furnishings in the home.
Most builders will provide a long list of available upgrades. Many upgrades can raise the price of a home significantly. If you expect to make upgrades that might be unusual, the builder will probably ask you to pay for them in advance. Some upgrades that go beyond the bounds of normalcy, ones that the builder may consider to be a problem should you end up not purchasing the home (because they could prevent others from purchasing the home), such as an unusual carpet color, will probably be denied by the builder.
Making changes after a certain date on a planned build of a home will result in additional charges to the buyer if they are permitted in all. Builders purchase large quantities of materials in advance based on contracts they have with their buyers. Once builders have put in purchase orders, a step that happens early on in the process, sometimes before the ground is broken, it is difficult to get agreement from the builder to make changes.
Research warranties on structure, finishes and appliances. Developers typically offer ten year warranties on structural elements of a home and rely on manufacturers warranties for appliances, furnaces, windows and overhead garage doors.
Ask about how many homes in the development are being purchased as primary residences and how many are being purchased to be rental units. In order for a community to retain its value, there needs to be a careful balance between owner occupied properties and rental properties. The overabundance of rental properties tends to lower home values. Some new construction communities are seen as excellent investment areas by investors looking for rental property. Be aware of this.
You should have a final walk-through before closing on your new home. Create a punch list of all uncompleted or unfinished items. Punch lists can also call attention to items that need to be repainted or need additional attention. Both the developer and the buyers should sign the final punch list in agreement. Developers should complete punch lists within 30 days of closing.
Proactive buyers can catch design mistakes or irregular materials by visiting the job site on a regular basis. For insurance purposes some developers limit access to construction sites or require that you wear protective clothing, such as a construction helmet.
There can be a large difference in quality and useful life spans between builder grade and upgraded finishes and fixtures. It could be worth the additional expense to install better carpet, cabinets and faucets. Cross-check builder prices for upgrades at your local home center.
Do not buy appliances from builders that are optional. In our area, refrigerators, which are not required for a certificate of occupancy, are offered by builders; but, should be purchased from builders. Save some money - buy from a dealer.
Builders of new construction homes usually do not negotiate on unit prices (although this has been less true in this buyer's market). However, sometimes a builder will throw in upgraded appliances or hardwood floors in place of standard carpet. Ask.
Pre-construction pricing (‘muddy boot” pricing) can attract value-driven buyers. There is some risk entering into a project before it has started. Verify that the developer has received a green light from local building authorities and has a proven track record of timely completion in the 
community.
Large national builders rarely make changes in floor plans of homes to accommodate individual buyers. Buyers are often surprised to find out that, even if they are willing to pay for changes to floor plans, it is rare that they can get builders to agree to do so. If you're interested in a custom style home, go to a custom builder. Custom builders are more than happy to make changes that you are willing to pay for.
Building your home in Charleston
Walking into a brand new home with new home buyers and watching their expressions they take in the moment is a great pleasure for me.
A brand new home is indeed a beautiful thing. And, buying a new home can be one of life's most enjoyable experiences.
Sparkling new appliances, fresh paint, shining hardwoods and bright carpets, stylish new hardware and even the latest bathroom fixtures all come together to create an amazing picture of perfection. Even the smell of new construction is enticing.
Building your dream home or purchasing a home that is under construction, or that has been just finished, is always exciting. Purchasing new construction brings with it numerous advantages (and perhaps a few disadvantages as well).
Advantages of new construction homes in Charleston
Having the opportunity to select a home from a menu of homes offer by a builder, tailored to meet your lifestyle needs, is a very big plus. Being able to move right into a home that is in turn key, "perfect" condition, without the need to make any upgrades or improvements, is another reason new home purchases are selected over re-sales.
Of course, with new construction, you often have the opportunity to be involved in the selection of options for the home - and even choose colors. Being directly involved in the entire process is one reason so many people enjoy the new-home building and buying experience in the Charleston home market.
Significant protection in the form of warranties is available to the new home buyer anywhere in South Carolina. Charleston area new construction homes are sold with home warranties from the builder, warranties from vendors for the mechanicals and warranties from the manufacturers of the appliances themselves. If you have a problem after you move in related to construction, you can usually get it fixed at no cost. Charleston area home builders are required to provide a "bumper to bumper" warranty for the first year. Some builders even extend that warranty beyond the first year. All builders are required to provide extended structural warranties to protect new home buyers agains structural defects.
Over the past several years, new construction has been extremely popular among home buyers in South Carolina for many good reasons. One major advantage of purchasing new construction in South Carolina
is that the home will be up to the latest codes for safety and for efficiency, meaning that you will likely pay lower bills for utilities and for home owners' insurance.
An advantage that people don't often consider, unless you have purchased a new construction home before, is that you are probably moving into the neighborhood where your neighbors are also going through the same experience. While this may seem relatively trivial at first, this community experience creates a bond among neighbors and encourages community activities, such as cookouts. It helps people get to know their neighbors quickly and more thoroughly.
This common experience can make important connections among long-term neighbors and can help create an atmosphere of cooperation and a positive sense of belonging. Not only is this important to many home buyers themselves, this can also turn out to be very important to other members of the family. Teenagers, in particular, seem to find this common experience to be an advantage in developing friendships.
Disadvantages when buying new construction in Charleston
When you ponder purchasing a new home in a new home community in Charleston, don't forget that there also some disadvantages to consider.
First, you will probably have to deal with ongoing construction and the noise, traffic and the inconvenience that new home construction brings. Next, you may encounter additional expenses, such as in adding fencing, buying window treatments and other items, that you did not give much thought to before closing.
New homes typically have very limited landscaping. If you want to have a beautifully landscaped yard, you may have to do that yourself or pay a professional to do it for you after the close.
For in neighborhoods in Charleston, Summerville or Goose Creek, or any of the other surrounding areas, a built in sprinkler system can make a big difference in how your yard will look in the long run. Although some builders now offer sprinkler systems, these are still rare with new construction; and, you will be charged an additional fee to have one installed by the builder.
How about gutters? Frequently, buyers remark to me that they are surprised that new construction homes in Charleston typically do not come with gutters. That's right, if you want gutters on your new home, it will usually be an aftermarket expense.
With new construction, it is difficult to tell how the community will turn out as it matures. With home purchases in established Charleston communities, what you see is what you get. The majority of new construction communities in Charleston have very few mature trees. So, it is difficult to judge how things will look just a few years down the road. Charleston buyers who want a more mature looking neighborhood with large trees and established yards will need to consider resale homes.
Some real estate experts contend that resale homes in Charleston are a better value than new construction homes because most resale homes have had owner added home improvements that are not necessarily reflected in the MLS list price.
Some of such home improvements that I see frequently inlude: closet organizing systems, swimming pools, decks, fences, upgraded lighting, landscaping, ceiling fans, gutter systems, sprinkler systems, and upgraded flooring. While some of these items do help raise the value of a home, they usually do not raise it by the amount of the investment. For something like an in-ground swimming pool that might cost $25,000 or $35,000 for example, it is amazing how little a value is added to the resale market value of the home.
How to begin your search for new home communities in Charleston
When you begin the process of looking for a new construction home in Charleston, if you're like most people, you might go online and began browsing through various new home builders in the Charleston area (list on the right). Most home builders do provide extensive information online.
Before you meet with any Charleston area home builder or visit Charleston area new home community, you should meet first with your buyer's agent. If you want to have representation through the process, a very good idea, you need to begin by having a buyer's agent at your side from day #1. The builder will pay your agent but only if that agent is there from the beginning.
Important! Many builders require that your agent accompanies you during the first time you visit a sales center - or your agent may not get paid - and you may not get your own representation through closing. Be fair to everyone involved. Your agent invests significant time helping you. Be sure you provide your agent this courtsey and this protection so they may be paid by the builder for helping you. Be sure you have an agent on your side until the day you get the key to your new home!
As you might expect, builders look at selling a home from a very different perspective than that of individual home sellers. Builders are business people and selling is a full time business - not an occasional necessity. Builders recognize that agents are important to selling their product. They are willing to pay for the services agents’ offer you. That's a great deal for you!
In most circumstances, the listing agent (site agent) receives equal compensation whether a buyer comes with a buyer’s agent or not. That is to say, that just because a buyer comes with an agent does not mean that the site agent is paid less. And, conversely, when a buyer purchases a home from new home community without an agent, the site agent is typically compensated the same amount as if the buyer had an agent. Why does this matter? The site agent has no motivation to discourage you from having your own agent. In fact, most site agent want you to bring your own agent. Remember, the site agent does NOT reprsent you - only the builder. Most builders employ this equivalent compensation to the site agents to promote cooperation among site agents and buyers’ agents.
Procuring cause issues (determining who helped the buyer locate the home to buy) frequently involve new construction. This is because it is so easy for buyers to locate new home communities on their own. It is easy for buyers just to drop by to preview models and to speak with site agents about the community and the offerings.
Why would a builder be concerned about procuring cause? Money retained = improved profit margins. These are business people. Any money not paid out to the buyer's agent remains with the builder as profit. If you are looking at new construction, you have seen builders advertise. You may have heard builders’ advertisements on the radio. You may have seen numerous promotions conducted by builders such as specials that are being run for particular weekend to draw in buyers. These and other promotions cost a lot of money.
While builders look favorably at paying commissions to buyers agents who promote their properties, builders avoid paying commissions when the buyer is generated, not by the effort of their real estate agent, but as the result of other promotional activities. In essence, buyers consider real estate agents commissions as an advertising expense. They're happy to pay for this advertising expense as long as they can track that the advertising expense generated the resulting sale. So for Charleston area builders, as well as for Charleston area real estate agents, procuring cause is critical.
Registration is important
One way that many South Carolina builders handle this concern is through a registration process. If you register with a builder, you will be asked to verify that you have a real estate agent representing you or to verify that you are unrepresented at the time of registration. If you are unrepresented at the time of registration, your agent may be barred from receiving a commission.
Again, builders do hope to foster a cooperative relationship with agents. The registration process is one way to eliminate friction between builders and agents because everyone understands the expectations. Registration creates clarity as to procuring cause. Everyone understands that an unrepresented buyer cannot justifiably claim that their agent was the procuring cause of discovering a particular community or a particular home within that community. This registration process also prevents a buyer from bringing in an agent after the fact just to claim a commission.
Best practices tips for you, the new home buyer
1.Select your buyer's agent before you begin previewing properties
2.Avoid house hunting without your agent by your side
3.Once you have hired an agent, if you decide to view property without your agent present, inform anyone who needs to know, such as an on-site agent or an agent conducting an open house, that you are already represented by your own agent. Ask your agent to provide you with a few of his or her business card to offer to agents that you meet.
Bottom line: Even experienced home buyers need representation – an agent looking out for their interests. The builder’s agent is looking out for the builder’s interests. Don’t give up a chance to have your own representation – it’s free and it will make a positive difference for you. Hire your own agent. It's free.
Note: House Plan Realty has no affilliation with any builder.