VIDEO: New construction including builder contracts and Inspections

Transcription below

Hi, everybody, and welcome to today’s edition of Ask The Colorado Dream House Team. I’m Dan Polimino. If you’re new to the show, welcome. We’re glad to have you. If you watch it each week, well, again, we’re happy to have you. All you have to do on this is ask real estate questions, and we answer them for you. That’s what Ask The Colorado Dream House Team is all about.

A couple of ways you can ask questions, you can obviously leave a comment or a question here on Facebook, or you can email us at Team@ColoradoDreamHouse.com, or even call us. Two things we always want to get accomplished in this show, which is to give you some market information that you can use and to answer your questions. Again, this information that we pass along about real estate really applies no matter where you live, even though we’re in Denver, Colorado.

All right. Let’s talk about market news. Today, we’re going to talk about luxury. If you are a luxury home seller, this one is for you. A lot of luxury home sellers feel like they need international marketing. I know it sounds cool, and it sounds sexy that your house is being marketed across the pond or in Asia, and you feel like you really need that for your two, three, four-million-dollar home, but the truth of the matter is that the statistics are not really in your favor. The odds of you getting the foreign investor to buy your home and the percentages are actually really, really small. In fact, I read some statistics that say that 80% of all of the buyers for your luxury home are going to come from within a five-mile radius of your home. Moreover, 92% of all the buyers for your home are going to come from within the same state.

Again, I’ll ask you … I know it sounds nice that you have international marketing, but how much money and time do you really want to spend going after a foreign investor when 92% of the buyers are going to come from your own state or within a five-mile radius of your house? Just keep that in mind because we hear that a lot. We meet with a lot of sellers that say, “Oh, we need international marketing.” Really, it’s only about 8%. The other thing that you need to know is that if you don’t live in Los Angeles or New York, again, not a huge influx of foreign investment outside of those two major cities.

All right. That’s good market information that you can use. Let’s move onto your questions.

“Dear Colorado Dream House Team, can you tell me about builder contracts?” Yes, and I could do it for about an hour. There’s a lot to know about builder contracts. The most important thing that you need to know is that they are not in your favor, meaning you, the consumer. They are in favor of the builder. That’s why they’re a builder contract, so be very, very careful when entering into a builder contract. Make sure you bring a real estate agent or a professional with you to go through that contract very closely and know what you’re getting into.

Many times, there are no contingencies for you in that contract. There’s no inspection, no appraisal, no loan contingency. Once you lay down that earnest money, you are locked in, and that is just the tip of the iceberg. Again, if you want more information about builder contracts, contact us at Team@ColoradoDreamHouse.com.

Number two. “Dear Colorado Dream House Team, do I need a real estate agent if I’m buying new construction?” Yes, you do. You need somebody with experience, who’s done a lot of new construction to help ask all the right questions and to help navigate you through the process. I know a lot of people out there say, “Well, I’ll just go through the sales person at the site, maybe because I’m going to save some money.” Listen. That almost never happens. You don’t save any money by going through the sales person and not using the agent, and here’s why.

When the builder starts putting together the pricing for all of his homes, he builds into the price a commission for his sales person and a commission for the agent bringing the buyer. It’s already built into the price. If you don’t use a real estate agent in your purchase and you just go through the sales person, the builder just pockets that extra money. It’s just more profit for him. He doesn’t give you a break on the price. All right? Important to know.

“Dear Colorado Dream House Team, should I have an inspection on a brand-new home with a builder warranty?

Great question. The answer is yes, but you don’t need the inspection actually upfront. Since most builders are giving you a one-year home warranty, I tell people to go ahead and close on the house, move in, live in it for about 10 months, because during the course of that time, you’re going to find all kinds of things that are wrong, that need to be fixed. Make a list of those. Then order a full inspection and have an inspector come in and see what he finds, and then take his list and your list and present that to the builder in about month 10, just before your warranty expires, and have it all fixed at once. All right?

Featured property of the week. I want to tell you about 24480 East Glasgow. All right. Go to ColoradoDreamHouse.com/Glasgow. Here’s what I love about this house. Not only is it all brick and in a great location, over in Tallyn’s Reach, but it is a walk-out ranch. Walk-out ranches are one of the most popular floor models out there today. It is just a fantastic house. It’s over 8,000 square feet finished, a five bed, six baths with great views and really, really nice finishes. Again, I’ve provided the link here in the description. You can just click on the link, which is ColoradoDreamHouse.com/Glasgow, or you can look it up.

That’s our featured property of the week. That’s the market update and your questions. I hope you have a great weekend, everybody, and thanks for joining us. We’re back on Tuesday.

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