Home Buying in San Antonio>Question Details

Jeremy, Home Buyer in San Antonio, TX

What are some things to look out for/insist on when buying a new/inventory home that has already been built?

Asked by Jeremy, San Antonio, TX Sun Jul 13, 2008

What are some things to look out for/insist on when buying a new/inventory home that has already been built by a production builder? In this case, it is a Ryland home in San Antonio. I have only purchased "lived in" homes in the past, so I am not spun up on what I should look for, insist on etc...considering the home is already built, but has never had occupants. Thanks, Jeremy

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I presumed my advice in reference to NOT using a real estate agent would not go over so well....I was just trying to be helpful...I am a licensed real estate agent, as well as my sisiter, brother, mother, father, brother-in law, wife..basically I come from a family of real estate agents...I also owned my own mortgage brokerage company for 12 years...I am not trying in any way to beliitle a realtors "job". However, the MAIN purpose for a real estate agent is to help you find a home....New home builders have on-site counselors to do that??? The contracts are written up by the builder & are RARELY reviewed by any team from the realtor...other than confirming that their 3% commision is accurate??? there is not much to buying a home...A new home should come with a standard 10 year warranty on the structure...So youir covered there??? You have to have insurance, so your covered there?? A question to ask yourself is ..did you take an agent with you when you bought your last car??? The real estate business is hard work...but I like to work for my pay...When I've helped a client find their dream home and help them negotiate a good price then I sleep good at night knowing that I've helped someone....BUT, to claim that you need a real estate agent when you've already decided on a home, builder and location is rediculous to say the least...a real estate agent AT THIS POINT can do nothing for you other than possibly ruin your chances of geting a lower price on your home....and yes I do expect this response not to go over to well either...But it's true...When determining an incentive on an inventory home or an offer the first question asked by the builder is "Is there a realtor on the deal"...because if not ...there is more room to negotiate alower price...Sorry...BUT true
2 votes Thank Flag Link Sun Jul 13, 2008

Jeremy I've sold a couple Ryland homes and will stand behind their product and their customer service! All of my clients have loved Ryland's quick response to every request before and after they were in the home!

I hope I don't dirty up this forum too much and get away from your question, but I've been compelled to respond to our "beloved neighborhood KB hero" Noel. Noel, I will ask you a simple question and would hopefully get an answer from you; do you believe your employer KB would share the same views as you do? If so, please answer it here! I'm sure me and about all the other 7600 Realtors in this city would like to hear your answer.

BOTTOMLINE: There are crooks and then their are saints in every business. Unfortunately, their are also agents that dropped out of this business because they truly could not figure out what their "value" was to their clients beyond clicking some buttons and finding homes on the MLS and so they then decided to take up a JOB. Not saying that's Noel's story as I do not know him at all, but it's still a fact and it's also better they do leave this business because those are notoriously the agents that give all the Good agents a bad name!

I've personally experienced several dealings with builders that flat out were not giving my clients the best deal or looking out for their best interests (intentionally or not.. that's always up for debate), so I had to step in and fix issues before it was too late. A few examples: (Quoting a higher spec home price to my client than what was advertised in Realtypak, and then only giving them $4,000 of incentives when there was advertised $7500, or Trying to convince my clients w/ low credit scores & low income that they should do a 15 yr Mortgage on their first home so it would "trick" the automated system and let them buy the house after all..... then when they told the builder that they didn't think they could afford the payment; they were told "no problem.. you can always refinance if you can't make the payment".) - My examples could go on and on as I'm sure the other 490 GREAT agents in my office could also add to that list!

So, please Noel.. before you start unleashing statements that a real estate agent "can do nothing for you other than possibly ruin your chances of geting a lower price on your home"; please consider that there still are excellent professional Realtors out there that do care and will MOST CERTAINLY bring more value to their clients than for what it's worth in commissions!
Web Reference: http://www.eXposedhomes.com
1 vote Thank Flag Link Thu Aug 14, 2008
Jeremy, there are a number of things you need to watch out for, and the list would be far too long for this answer box. YOU NEED REPRSENTATION! Most people do not realize that the sales reps for builders are not licensed or held to any standard. They work for the builder and represent them, NOT YOU!!!! I have had several clients that I picked up either in the middle of or just after a nasty deal with a builder. I have seen cases where they tell you they will do stuff, never put it in writting and so they never have to do it. Inspections is a big deal, it may cost a few hundred dollars, but it is well worth the money! We pay for our clients "new home inspections" as a complimentary service to them. Some folks give fancy gifts, I belive a home inspeciton is more valuable. Please Please Please get representation. If not me, then someone.
0 votes Thank Flag Link Thu Aug 21, 2008
As a real estate broker and appraiser, I would like to answer this question from both perspectives. First, consider the neighborhood. Are there similar subdivisions nearby? If not, the builder's appraiser had to go some distance to find homes to compare to yours to determine the value. Also, this means that the builder is speculating on future growth in the area and this has not yet been proven. If the market changes as it did last year the growth will slow and affect your ability to sell in the short term.

As for the lot, builders sell certain lots at a premium if it is larger, on a corner, or has a special view. I have gone out to advise young couples, one couple in particular comes to mind. Builders often buy cheap land to develop, sometimes it runs along power lines. These properties later are harder to sell. I advised the couple to offer less for the property. Remember to always consider the surroundings at the property.

A "spec" home as these are called, are usually built for a specific person from among a list of builder plans. The homes have certain paint colors, carpeting or tile that was chosen by the original buyer. Try to impress on them that these would not have necessarily been your choices.

Shop for financing, builder's often offer "incentives for using their affiliate mortgage or title companies offering free title policies (usually paid by the seller anyway) or extra appliances. Do a cost analysis to see if you are paying thousand more in interest for that $300 refrigerator.
Web Reference: http://www.netbreal.com
0 votes Thank Flag Link Wed Aug 13, 2008
You might also make certain that they've hooked up the dishwasher- I've seen more than once a flooded kitchen (after closing) due to this forgotten element. The builders have always done the repairs afterwards, but it's a hassle for the new homeowner.
Web Reference: http://optionsrealty.com
0 votes Thank Flag Link Thu Jul 17, 2008
Ask to review the builders warranty before signing on "the bottom line." Confirm that the warranty covers all of the aspects that your state requires for homeowners. I have been in situations where the builder did not offer the minimum protection that state laws require.
0 votes Thank Flag Link Thu Jul 17, 2008

I am a REALTOR and I just recently built/refurbished and home myself. The house we reconstructed had completely burned down the ground so it was a big job, to say the least! I have to encourage to use a REALTOR on this one. Although, you may feel that the contractor may give you a better deal w/o using one. But here is a question I pose to you. Who will have your and your family's best interest at heart when building a home? I can for warn you, based on my experiaces in this business contractors usually do not. You need someone that you can trust to help guide you along the way. In all the aspects of building. For instance when it comes to paper work a REALTOR can represent you and handle most of this for you. That way you are assured of number one exactly what you are signing. Also, we all know that contractors can be very unrealiable to the time-line put fourth. With proper reprenstation you are more capable to keep them on track. The second most important things to do is make sure that you are able to request either the materials that are creating your home or see them. You want to make sure especially on insulation that your contractor uses a good quality insulation not only in the walls but also blown insulation in the attic/ceiling. This will be very important not only to your wallet but to your energy comsumption as well. You should never, never, never buy any home new or otherwise w/o an inspection. ps make sure you have a pest inspection, I tell all my clients there are two types of homes those with pest and those who don't have them yet. Sounds funny but it is ever so true. Pest inspections are usually under 100.00 and it can save you thousands. Also, you should push for an insured closing on your property that you plan to purchase. This will show that the property if free from liens, easements, or any other encumberances. These are all things that a licensed professional REALTOR can help you through. The cost of using a REALTOR should not detour you. Most REALTORs only charge a nominal fee for a service such as this. I have seen many people go into this alone and wish they had help from "someone who just knew" I wish you the best of luck in this exciting journey you are about to take. Believe me, I know this will be a great journey and you will love the process of customizing your new home!
0 votes Thank Flag Link Wed Jul 16, 2008
Another thing you might want to look at is insulation; how much, where, what kind; that can make a huge difference in your utility bills.
Type of windows ditto.
Do you get appliances with the house?
Is there a low-flow toilet?
You should be able to have an inspection by an inspector of your choosing (at your expense)
You also have the right to be represented by your own buyer's agent who can help you with all of the above and everything Nai ma and Options said, too.
Congratulations on your new home; may you have many happy years there.
0 votes Thank Flag Link Wed Jul 16, 2008
These answers seem to get off the subject of the original question.

Jeremy, First, Ryland is a reputable builder with a pretty good reputation in the Dallas are, not sure about San Antonio. Some things that can be forgotten are:

All rooms blocked for a ceiling fan and light kit
Kick plate on front door - may be a peephole too
Blinds for the house (could be pretty expensive but builders get a wholesale price)
Outlet in the laundry room or garage for a freezer or second refrigerator
Gutters are a must
Sod in the backyard... yes some of them put sod in the front and side
check that exhaust fans are in the rooms you want.
Is the AC compressor big enough for the size of the house
Have them stain the fence especially if the house has been in inventory for a while

Yes you will be doing a walk through with the builder about 10 days before closing and go through the house room by room, and mark items that need attention. Then you return the day before closing and meet again to make sure those items have been addressed. This is pretty much your last chance to report what you want done, so be very thourough about everything, paint touch up, scratched walls, open all the windows, check the outlets, check the water pressure in the kitchen and all baths

Yes as it was mentioned below you will get a 1 or 2 year warranty from the builder. When it's about to expire, about 11 months into it , get a home inspection, well worth the peace of mind, and turn the report to the builder along with other items you want done.

Good luck to you,

Web Reference: http://www.sumnerrealty.com
0 votes Thank Flag Link Wed Jul 16, 2008
One thing that I'd suggest is that you sit down with the on site person and real estate agent, if applicable, and go through the upgrades that are either in or planned for your home. Once you're aware of the individual cost of things, you can assess those which matter, and those that, to you, don't. It's easier to formulate your offer with clarity on exactly what you're paying for (and would prefer not to).
If you can get an inspector through (some builders absolutely hate that), that would be smart. I'd also check with the neighbors to see how completed their houses were at the walk-through, and how long items are taking to get fixed. That way, you know how hard to dig in your heels at the w/t- some minor items should be expected.
I've heard really good things about Ryland, but the same construction crew can vary from site to site- people living in the community are a great resource. Congratulations, and best wishes.
Web Reference: http://optionsrealty.com
0 votes Thank Flag Link Wed Jul 16, 2008
I've obviously hurt someone's feelings...I was just trying to be helpful...."Nuts & Bolts"...."Bumper to bumber"??? Sounds to me that someone perhaps is or was a used car salesman...FYI...Most NEW car salesman ARE licensed.... More food for thought...A realtor only gets paid if you buy a house....I work in the HOME FINDING CENTER...I am paid a salary for helping buyers...not commision on any sold home...I also have over 12 years in the mortgage & real estate business. I already know your buying a home from another builder other than the one I so happen to work for...I have nothing to gain, therefore from my advice & OPINION, which I guess Steve is wecome to have his own.....Thanks for your personal e-mail, congratulations on your new home & best of luck....Bottom line ...people are people...and no oath or code of ethics will ever change who a person is...and most information you need in reference to buying a new home, whether it be about the area, schools or the builder is available to the public....I have met in my lifetime crooked realtors and honest car salesman...So please don't believe that any oath taken actually better's a person or make one better than another...
0 votes Thank Flag Link Wed Jul 16, 2008
I would have an inspector check it out. The nice thing is if you buy from a new home builder then you will get a great warranty.
If you have any questions please email me.
0 votes Thank Flag Link Mon Jul 14, 2008
Jeremy, some of these answers are incorrect. From what I understand, it is ILLEGAL for a builder to offer a lower price to a buyer if they aren't using an agent. As a case in point, I recently sold a 200K new / inventory home, that put forth 21K in buyer's incentives. Noel, who currently works for KB (according to his bio), should check with his management to see if they would sell a house for less if there wasn't a realtor involved. The intention of this is to protect realtors from a potential builder making a backdoor deal with a buyer directly, or vice versa, thus cutting out the realtor. In other words, let's say commission was 4,000. if there wasn't some form of protection for the realtor, what is to stop a builder from approaching the buyer and saying "we'll give you an extra 2K in incentives if you cut out the realtor and buy direct". Often, the situation is just the opposite of what Noel suggests, in that buyers usually don't know that builders are "negotiable", but realtors do...Because of this, even though I work in San Antonio, i've sold 3 new homes in Houston, and 1 in Austin, along with 2 in San Antonio.

All of that being said, it is partially correct in that part of a realtor's job is to find a house for their client. Assuming the job of a buyer's agent is in 2 halves - find a house, and negotiate / complete the deal - then you've already got 1/2 done. Maybe a realtor, who has been through this process several dozen times, will know what to look for more effectively than someone buying maybe their first or second house ever. If Jeremy were to come to me to ask for representation on a home he has already found, I'd cut my commission in 1/2. I think that would be fair - 1/2 the job is done, 1/2 the job isn't.

Fact is, people seldom buy or sell more than a few houses in their lifetimes. A decent realtor should be running 20 transactions or so each year, so the quality of knowledge, compared to a buyer who at best is a novice, is significant.

Another fact is that typically the builder's 10 year warranty applies to STRUCTURE. The nuts and bolts of the house are warrantied for a MUCH shorter amount of time - maybe 1 or 2 years. The warranty is prorated - it might be 1-2 years "bumper to bumper", then another couple of years for electrical and plumbing, then the remainder of the 10 years mentioned earlier for structure.

Another fact, making a comparison of buying a car to buying a house is quite simply foolish. Car saleman aren't licensed, and not required to be ethical in dealings with the public, etc. Same is true for NEW home counselors / salespeople. Realtors are LEGALLY AND ETHICALLY held to a higher standard of knowledge than non-realtors, including those that work for the builder.

Also, often sales counselors are bonused on each sale. Thus, it is in their best interest to sell the house. Much like car salesman, they will do whatever it takes to sell a house. HOWEVER, their loyalty rides with those who sign their checks - the builder. Also, if their bonus for the sale is in any way tied to the amount someone pays for the house, add this to the fact that they're not required to be up front, ethical, honest and forthright, and you've got someone that gives the appearance that they are on your side, when they are actually not.

Food for thought. If, there was another builder 2 blocks away, that had a similar house, for 5K less, do you think your "sales counselor" would tell you about it? if you had a realtor, they would. Or, if the same builder had complaints filed against them, that the realtor knew about, and the sales person knew about as well, would you find out from the sales person? You'd certainly find out from the realtor.

Another fact - not all inventory homes were built for someone else. Some builders do build inventory homes, and their sales counselors pick the most popular options to put in the homes. Recently, though, since sales have fallen, this tendancy has diminshed some. However, it is not fair to assume that just because a home is in fact an inventory home, that someone ordered it, had it 1/2 built, and then cancelled his contract. Some builders will change their terminology a bit - they might call a home built by them with nobody in it a "spec home" instead of an inventory home. Typically, this happens when a builder has a particular lot that, for whatever reason, choices as to what type of floorplan fit on that lot, are limited.

If you believe Noel's statement that you can get a better price without a realtor, give the builder a call, and ask them if the incentive amounts or sales price changes if you have a realtor. They'll tell you the answer.

Jeremy, if you need assistance, call me, and I'll help you any way that I can. 210 521 0068. or email at stevemalinoff@aol.com
0 votes Thank Flag Link Mon Jul 14, 2008
The incentives CAN be used towards the closing costs...Most builders also have CCA's (Closing Cost Assistance Programs)....during the walk thru...be very picky...insist that the home is perfect..in reference to "upgrades" normally there are none, unless your having a home built from scratch...the reason for the incentives IS that your buying the home as is very much like buying a "resale" home the only difference is that noone has ever lived in this one...an inspector is not a bad idea...BUT remember you covered by the warranty...normally 10 years....Feel fre to contact me directly for some additional free advice...210-430-2055
0 votes Thank Flag Link Sun Jul 13, 2008
Yes, there are incentives with the home. I am not so much interested in the cost of the house right now, but more on what games might be played by new builders, or what are common issues with a new home. If I move forward on the home, I will have the home inspected for sure. On top of that, I assume there is a "walk-thru" the an agent and I would do to ensure things are in order. During the walk-thru, what are some things I should look for? For instance, do a lot of people forget to check something...and then 6 months later after moving in, find something that should have been found during the walk thru. Also, other than incentive pricing, do I have any ground to request that the builder pay part of the closing costs, or upgrade fixtures etc???
0 votes Thank Flag Link Sun Jul 13, 2008

Yes, please use a real estate agent to guide and assist you. You will not regret it!

Second, insist on a home inspector. You pick whomever you want. Even new homes have problems.

Let me know if I can be of any other service.

Good luck!

Dominick Dina, Broker/Owner
Christian Realty San Antonio
0 votes Thank Flag Link Sun Jul 13, 2008
An inventory home has & was built for someone...and for whatever reason they did not & are not closing. There should be an "incentive" to buy an already built home from a builder and also inquire about a "community incentive".... And finally, unfortunately, the truth is that if you DO NOT have a realtor you are more likely to get greater incentives due to the fact that the builder is not having to pay for their services...
0 votes Thank Flag Link Sun Jul 13, 2008
1st never purchase a home w/o a realtor who represents you, you don't know contract law for real estate transactions, and realtor has a team of people who work in concert with them to effectively assist you in purchasing a home. If anything does happen you are covered under the realtor WHO represents you their e & o insurance. http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sun Jul 13, 2008
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