Redfin’s
New Construction Class
Hosts: Janet Erickson, Tamaira Devany and Daria Kurkjy
Redfin’s Issaquah – Sammamish Team
...
Agenda
●
●
●
●
●
●
●
●
●

Slide 2 of 33

Finding New Construction
Pros & Cons
New Construction Types
Process
Upgrades & Ch...
A Little Bit About Redfin
Redfin is a real estate brokerage on a mission to make
buying and selling a home better for you....
Your Agent. A Good Fit?
Click here
when you
decide

See all
deals &
reviews

Slide 4 of 33
We Share Our Commission With You

 Applied to closing costs
 Refund is tax-free

Slide 5 of 33
Finding New Construction

Slide 6 of 33
How To Locate New Construction

Slide 7 of 33
Is it a Home or Condo?
● Condo – Typically one floor attached or
not attached.
● Town Home – Typically two floors and
can ...
“Pre-Sale” or “Under Construction”
Pictures from the MLS

Slide 9 of 33
“Pre-Sale” or “Under Construction”

Actually…

Slide 10 of 33
Finding New Home Listings
● Builders may not list every home in a development on the MLS –
your agent can inquire about ot...
Registration Policies
● Site Agents/Brokers may ask you to register your name especially if you visit the site without you...
Builder Websites
Local Builders
•
•
•
•
•
•
•
•
•
•
•

Slide 13 of 33

National Builders
•
•
•
•
•
•

American Classic
Buc...
Pros & Cons

Slide 14 of 33
New Construction Pros
● Home built with “green materials” which saves you
money and help the environment.
● Upgrades – you...
New Construction Cons
●
●
●
●
●
●
●
●

Smaller lot sizes depending on the community.
Look the same or may lack character
P...
The Process

Slide 17 of 33
How far along is it?

• City permits
• Most options for
changes and
upgrades
• Longest timeline

“Presale”
Home

Slide 18 ...
Builder Contracts
Builders have a package of documents:

●
●
●
●
●

Builder addendum
Full builder purchase agreement
Neigh...
Common Provisions
● No inspection contingency – inspections are allowed
and builder must fix code issues but you can’t wal...
Upgrades & Changes

Slide 21 of 33
Specifications List
Builders generally provide you:
● A standard list of specifications.
● A list of what upgrades which m...
Paying For Upgrades
Every builder has different rules:

● Roll it into the purchase price
● Upfront deposit.
● Some upgrad...
Negotiating

Slide 24 of 33
Front End vs. Back End
Front End means on the purchase price:
● An offer of $540,000 on a list price of $550,000 a builder...
What works best?
Most builders prefer to negotiate on the back end.
Why?

● Avoid setting a precedent of discounting for f...
Negotiation Factors
●
●
●
●
●

Slide 27 of 33

Market demand
Phase of construction
Willingness to use a “preferred lender”...
Financing

Slide 28 of 33
Preferred Lenders
Many builders will have a relationship with a lender:

● Ownership – may be owned by the same parent
com...
Questions?

Slide 30 of 33
Thank you for attending!
Redfin Hosts: Janet Erickson, janet.erickson@redfin.com
Tamaira Devany, tamaira.devany@redfin.com...
Thanks for attending!

Slide 32 of 33
Upcoming SlideShare
Loading in …5
×

Redfin's Free New Construction Class - Issaquah, WA

457 views
189 views

Published on

Published in: Real Estate
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
457
On SlideShare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
4
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Redfin's Free New Construction Class - Issaquah, WA

  1. 1. Redfin’s New Construction Class Hosts: Janet Erickson, Tamaira Devany and Daria Kurkjy Redfin’s Issaquah – Sammamish Team February 25, 2014 Issaquah, WA @Redfin Facebook.com/Redfin Slide 1 of 33
  2. 2. Agenda ● ● ● ● ● ● ● ● ● Slide 2 of 33 Finding New Construction Pros & Cons New Construction Types Process Upgrades & Changes Negotiating Financing FAQ Q&A
  3. 3. A Little Bit About Redfin Redfin is a real estate brokerage on a mission to make buying and selling a home better for you. ● Accountability: we’re on your side, giving you honest advice ● Technology: sellers get more traffic; buyers tour homes first ● Value: a full-service brokerage that saves you thousands  No obligation  Get back a portion of the commission Slide 3 of 33
  4. 4. Your Agent. A Good Fit? Click here when you decide See all deals & reviews Slide 4 of 33
  5. 5. We Share Our Commission With You  Applied to closing costs  Refund is tax-free Slide 5 of 33
  6. 6. Finding New Construction Slide 6 of 33
  7. 7. How To Locate New Construction Slide 7 of 33
  8. 8. Is it a Home or Condo? ● Condo – Typically one floor attached or not attached. ● Town Home – Typically two floors and can be attached or stand alone home. ● Single Family – Stand alone home. What’s the difference? ● The way the property was developed. ● Costs for financing may be different, ask your lender. Slide 8 of 33
  9. 9. “Pre-Sale” or “Under Construction” Pictures from the MLS Slide 9 of 33
  10. 10. “Pre-Sale” or “Under Construction” Actually… Slide 10 of 33
  11. 11. Finding New Home Listings ● Builders may not list every home in a development on the MLS – your agent can inquire about other homes ● Notice of “Proposed Land Use” sign ● Builder websites, newspapers on Saturdays ● A neighborhood may become available in phases – sign up to be on a notification list with builder photo: vintageseattle.org Slide 11 of 33
  12. 12. Registration Policies ● Site Agents/Brokers may ask you to register your name especially if you visit the site without your broker. ● Some builders have Registration Policies that require broker to attend with buyer on the first or second visit. ● Commission and Redfin Rebate ● What should you do? Provide Broker information to site agent and carry Broker business card to show them. ● Let them know that your broker will be in touch with them as you may have questions. Slide 12 of 33
  13. 13. Builder Websites Local Builders • • • • • • • • • • • Slide 13 of 33 National Builders • • • • • • American Classic Buchan Homes Burnstead Conner JayMarc Homes Lozier Murray Franklin Select Homes, Inc. Polygon Quadrant Village Life Centex Homes - Pulte DR Horton Ichijo USA Lennar Pulte Homes Toll Bros / CamWest
  14. 14. Pros & Cons Slide 14 of 33
  15. 15. New Construction Pros ● Home built with “green materials” which saves you money and help the environment. ● Upgrades – you can pick your upgrades and colors. ● Pick the location in the community. ● Modern floor plans, open family and kitchen area, spacious closets and bonus/media rooms. ● Planned communities can include parks, new retails and planned infrastructure. ● Home Owner Associations help maintain value by having rules and regulations in place. ● It is all new and comes with warranties. Slide 15 of 33
  16. 16. New Construction Cons ● ● ● ● ● ● ● ● Smaller lot sizes depending on the community. Look the same or may lack character Price - Typically are more expensive Builders may not be negotiable on price, depending on market. Additional expenses, appliances, window screens or garage door openers may not be included. Long closing dates, pre-sale, can take a long time – up to 7 months, typically 4-5 mo. Landscaping isn’t mature yet. Builders may change the spec level, materials or prices. Slide 16 of 33
  17. 17. The Process Slide 17 of 33
  18. 18. How far along is it? • City permits • Most options for changes and upgrades • Longest timeline “Presale” Home Slide 18 of 33 Under Construction • Limited changes • Pick colors possibly • Timeline varies • No changes • Upgrades limited • Close quickly, like a resale home Completed “Spec” Home
  19. 19. Builder Contracts Builders have a package of documents: ● ● ● ● ● Builder addendum Full builder purchase agreement Neighborhood description documents Warranty information HOA documentation These are non-standard forms that will override standard purchase agreement documents and must be read carefully. Slide 19 of 33
  20. 20. Common Provisions ● No inspection contingency – inspections are allowed and builder must fix code issues but you can’t walk away. ● Builder walk through – “blue tape walk through or Home Orientation Tour (HOT)” to create a “punch list”. ● Closing delays – builder may automatically extend closing with no penalty if the process is delayed. ● Repairs after closing – builder may be allowed to finish things after closing within a certain timeline. ● Earnest money non-refundable – after a certain period your earnest money may go “hard”. Slide 20 of 33
  21. 21. Upgrades & Changes Slide 21 of 33
  22. 22. Specifications List Builders generally provide you: ● A standard list of specifications. ● A list of what upgrades which may be shown in the model home. ● Pre-built home – May include upgrades that were preselected and are included in the price of the home. Prior to writing a contract, builder may not have: ● A price list or master list of options you can choose from. ● A cost associated with quoting custom finishes. ● Limits on changes that they are willing to make. Slide 22 of 33
  23. 23. Paying For Upgrades Every builder has different rules: ● Roll it into the purchase price ● Upfront deposit. ● Some upgrade deposits may be nonrefundable. ● May be fees for getting quotes or making changes. Every builder has a deadline specific to a certain house after which changes cannot be made. Slide 23 of 33
  24. 24. Negotiating Slide 24 of 33
  25. 25. Front End vs. Back End Front End means on the purchase price: ● An offer of $540,000 on a list price of $550,000 a builder may not negotiate to maintain the value of the community. Back End means concessions or upgrades: ● An offer of $550,000 on a list price of $550,000 ● Asking for the builder to include upgrades or credits towards options or closing costs. Slide 25 of 33
  26. 26. What works best? Most builders prefer to negotiate on the back end. Why? ● Avoid setting a precedent of discounting for future sales ● Avoid upsetting prior purchasers who paid full price ● May be able to control material and labor costs The best approach varies case by case. Builders often have certain styles. An experienced agent can lay out your options and make a recommendation. Slide 26 of 33
  27. 27. Negotiation Factors ● ● ● ● ● Slide 27 of 33 Market demand Phase of construction Willingness to use a “preferred lender” Number of requested upgrades Style varies from builder to builder
  28. 28. Financing Slide 28 of 33
  29. 29. Preferred Lenders Many builders will have a relationship with a lender: ● Ownership – may be owned by the same parent company, or may just be an institution the builder likes. ● Concessions – certain “specials” may be linked to you agreeing to use the specific lender. ● Rates – usually comparable, maybe not the very best deal you can find, may have longer term rate lock products. ● Process – may be contractual provisions that are easier if you use the preferred lender. Slide 29 of 33
  30. 30. Questions? Slide 30 of 33
  31. 31. Thank you for attending! Redfin Hosts: Janet Erickson, janet.erickson@redfin.com Tamaira Devany, tamaira.devany@redfin.com Daria Kurkjy, daria.kurkjy@redfin.com Please fill out the survey. We’d love to get your feedback so we can improve our classes. We will also send you this slide deck. Check out our home buying guide: Redfin.com/home-buying-guide Check out our schedule of upcoming classes at Redfin.com/events Slide 31 of 33
  32. 32. Thanks for attending! Slide 32 of 33

×