Buying New Construction 101?

C

ChiKid24

Member
Hey all.  Been lurking for awhile and figure it's time to post.  My family is looking to move to the OC and Irvine is top of list.  We've been pre-qualified with most of the homebuilders in Orchard Hills, Altair and Cadence Park.  We're in no rush to move so essentially waiting out phases to move up the priority lists and grab a lot we like.

That brings me to the question / topic for the thread.  While I have bought a house before, it wasn't new construction.  So I'm a newbie in this area and wondering if there's more to it than just getting on a list, waiting for the lot/property we want, hoping to get called, and putting down my deposit.  It feels like most of these communities don't allow any price negotiation, but potentially there are other benefits?  I've heard to ask for upgrade incentives, but is that even possible if there's others on the list that don't require?  Also I wasn't planning on using a realtor as I've basically already identified the neighborhoods and gotten on the lists.  But should I?  Are there any advantages in doing so?

Essentially I'm looking for a "Buying New Construction 101", or at least some things I need to think through so I'm prepared for when my name comes up and I'm ready to pull the trigger.  Feels like the right forum to get some thoughts, especially if there is anything unique to the Irvine new home buying experience.  Appreciate any help in advance!
 
Sign up with a realtor. Preferably one that gives rebates on new home commission. Like USCTrojanCPA (Martin). There should be a sticky post about this on the site. No sense in leaving free money on the table even if you know exactly what you want and don?t need an realtor.
 
ChiKid24 said:
Hey all.  Been lurking for awhile and figure it's time to post.  My family is looking to move to the OC and Irvine is top of list.  We've been pre-qualified with most of the homebuilders in Orchard Hills, Altair and Cadence Park.  We're in no rush to move so essentially waiting out phases to move up the priority lists and grab a lot we like.

That brings me to the question / topic for the thread.  While I have bought a house before, it wasn't new construction.  So I'm a newbie in this area and wondering if there's more to it than just getting on a list, waiting for the lot/property we want, hoping to get called, and putting down my deposit.  It feels like most of these communities don't allow any price negotiation, but potentially there are other benefits?  I've heard to ask for upgrade incentives, but is that even possible if there's others on the list that don't require?  Also I wasn't planning on using a realtor as I've basically already identified the neighborhoods and gotten on the lists.  But should I?  Are there any advantages in doing so?

Essentially I'm looking for a "Buying New Construction 101", or at least some things I need to think through so I'm prepared for when my name comes up and I'm ready to pull the trigger.  Feels like the right forum to get some thoughts, especially if there is anything unique to the Irvine new home buying experience.  Appreciate any help in advance!
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If you are waiting for an in demand lot you can forget about any negotiations or incentives. Just be happy you got the lot others wanted. Only time you can negotiate are lots that are sitting unsold.
 
Thanks for the reply Bones.  Not sure I understand what you're saying though.  What is the free money I could get?  Are you saying having a realtor would somehow lower my fees on the new home purchase?  Or are you saying a realtor would charge me a discounted commission since it's a new home.  If the latter, I'm not sure what I'd be saving since I'd still be paying the commission.  Sorry if I'm missing something...as I said I'm a newbie to new construction ;)
 
Irvinecommuter said:
MOVE TO ATLANTA!  j/k

What are you looking for in a house?  Kids?  Family, etc.?
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Looking for more space.  Currently own a 3BR vertical townhome <2000 sq ft, which has worked fine so far. but will be a challenge as the family grows.  We have a toddler and hope to have another in the next 1-2 years.  Would like 4+ BR and 3,000+ sq ft to accommodate us and an occasional visit from the grandparents.  Can sacrifice a bit on lot size / outdoor space if it's in a nice community with walking distance access to parks, pools, etc.  OH, Altair, GP all fit the bill.  Leaning towards OH due to lower MR.  Have also considered Lake Forest and Tustin, but haven't spent as much time researching those areas.  We don't HAVE to be in IUSD, as this is likely not our forever home.  Understand resell value is higher in IUSD, but you pay for it going in and with higher MRs so that feels like a wash.
 
ChiKid24 said:
Thanks for the reply Bones.  Not sure I understand what you're saying though.  What is the free money I could get?  Are you saying having a realtor would somehow lower my fees on the new home purchase?  Or are you saying a realtor would charge me a discounted commission since it's a new home.  If the latter, I'm not sure what I'd be saving since I'd still be paying the commission.  Sorry if I'm missing something...as I said I'm a newbie to new construction ;)
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http://www.talkirvine.com/index.php/topic,2690.msg40106.html

Read this. Can be a pretty sizable rebate depending on which development and which realtor.
 
Even if you are on the list, go with an agent before you make the offer.  The agent I work with has taken friends in and was able to work the commission in and rebate my friends.  I think she keeps $2000-2500 and gives the rest back.  As AW noted, check the thread and USCTrojanCPA and IrvineRealtor are the TI regulars here and both highly recommended.
 
ChiKid24 said:
Thanks for the reply Bones.  Not sure I understand what you're saying though.  What is the free money I could get?  Are you saying having a realtor would somehow lower my fees on the new home purchase?  Or are you saying a realtor would charge me a discounted commission since it's a new home.  If the latter, I'm not sure what I'd be saving since I'd still be paying the commission.  Sorry if I'm missing something...as I said I'm a newbie to new construction ;)
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The builders pay an agent a "broker co-op" or a referral fee for bringing in a buyer that buys a new home at their development.  Buyers do not pay any fees or commission to an agent whether it be a new home or a resale home.  Different builders offer different referral fees, some are flat amounts (like $10k-$20k) while others are a % of the purchase price.  There are some agents (like myself) that rebate a significant portion of the that builder referral fee to the buyer after the close of escrow.  This rebate is NOT taxable to the buyer.  The rule is that you have a register with an agent on your 1st PHYSICAL visit to the sales office...you can talk to the sales people at the builder or email them without a problem.  Most buyers are not aware of the referral fee or that there are some agents that provide rebates to buyers.
 
dude-iho-let-it-go.jpg
 
@zubs

So ironic that you posted a meme in protest of what is now a TI meme, just like ?FCBs? and ?Johns Creek?.

It even has its own rap song:

I like small lots and I cannot lie,
You TIC buyers can?t deny,
That when you go outside to dump your waste,
And the side wall is in your face...

Finish it irvinecommuter!!! :)
 
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