Chris DeLoach

Your Charleston Realtor
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 Building your home in Charleston

 
One of my favorite experiences is walking into a brand new home with new home buyers and watching their expressions they take in the moment. 

A brand new home is indeed a beautiful thing. And, buying a new home can be one of life's most pleasurable 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.

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.
4.Do not register on line with any builder. Do not register in person with any builder without your agent present even if you are already represented by an agent.
5.Sign a buyers agency agreement with your agent

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.
 
 
 
Chris DeLoach, ABR