Home Buying in Brea>Question Details

Drumstix, Home Buyer in Brea, CA

What is the best advise if I want to buy a new home. It is not built yet but a prequal app needs to be filled out to be on priority list.

Asked by Drumstix, Brea, CA Sat Jan 28, 2012

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Steve Ornellas’ answer
Drumstix:

First of all, I want to build on Bob's point. There's a right way and a wrong way to go about buying a home and obtaining a true Pre-Approval is absolutely the best first step one can take towards accomplishing the goal of home ownership - period! Please review the following to understand what constitutes a true Pre-Approval and why it can save you from wasting $1,000+ on a cancelled transaction: http://www.Steven-Anthony.com/GettingStarted

Buying from a Builder is very different from buying an existing home from an Individual seller in many ways. In my opinion, the most concerning of these is you do not have many of the contingency protections afforded by the CAR Residential Purchase Agreement. I can't remember the number of Trulia questions I have answered where they buyer has a change in circumstances and is facing the loss of their deposit!

From your question I'm assuming you may have started off on the wrong foot by not involving a Realtor® to represent you in the purchase on your first visit to Builder’s project. Here's a bunch of reasons why you should: http://docs.Steven-Anthony.com/BuilderRealtorAgent.pdf

-Steve
1 vote Thank Flag Link Sat Jan 28, 2012
First steps:

1. Meet with a Local Mortgage Banker to get prequalified for mortgage financing. The Mortgage Banker will review all facets of your loan request to answer your questions with regards to the types of loans and maximum loan amounts you could qualify for.


2. Get a referral to a good, local, real estate attorney. Call the attorney, retain the attorney so you have her information handy when you make an offer. Having that information at time of offer helps you demonstrate to the Seller how serious you are, and they will consider your offer with more interest.

3. Line up a Home Inspector. A good home inspector will scare the heck out of you: that's what you pay him for! But you'll concentrate on the fundamentals of the property: roof free of leaks, plumbing, heating and electrical up to code and in good working order. Again, when you make an offer and you have your Home Inspector ready to go, your offer will be considered with much more interest by a Seller because you truly have your "ducks in a row" and your preparation demonstrates your serious attitude about conducting the purchase transaction in a timely manner.

4. Find an experienced Local Realtor who works in your desired shopping area. A serious pro Realtor will refuse to show you homes until you are Prequalified for mortgage financing. Don't take offense! That Realtor doesn't want you to be disappointed and wants you to have a smooth experience as you shop for your new home.

Put together your Team of real estate professionals and shop 'til you drop!

Good luck!
Trevor Curran
NMLS #40140
0 votes Thank Flag Link Mon May 14, 2012
I would be really careful on what you are paying for a new home. Sometimes the prices on new homes can be inflated and it can be like buying a new car where it loses 10% of it's value "the day you drive it off the lot". I know buyers that bought brand new homes at premiums to homes 5-10 yrs old in 2009,2010, 2011 that now find themselves upside down.
0 votes Thank Flag Link Mon May 7, 2012
I would also add that if possible, have your own buyer's agent negotiate the terms. The friendly people at the sales center work for the devleoper, not you.

Ask if the devleoper will cooperate with a buyer's agent - this is generally the term used to ask if they will pay an outside agent.

A few other thoughts on buying a new home:

They tend to take longer to build than you are initially told

You may have trouble getting financing until a certain number of homes in the development have sold

You will pay top dollar for the privilege of being the first in the home

Good luck.
0 votes Thank Flag Link Mon May 7, 2012
Get advice from a local Realtor on the value of the property. If it is good, then get a prequalification letter from your lender. Don't forget to ask your Realtor for recommendations of good LOCAL mortgage people.
0 votes Thank Flag Link Mon May 7, 2012
On properties and developments that are in process, dont always cave to their mortgage requirements. they can not force you to use their poeple and many times their contracts are not written to be set in your favor. Get a Realtor involved to help you and protect your interests. Get a TOP mortgage person involved. Do those two things and i will probably be fine :O)
0 votes Thank Flag Link Sat May 5, 2012
Hello, I love this question and buying a new home isn't that easy. But since you're home isn't built yet you need to know that alot of things can happen with the builder that can delay home being finished on time. Check with a real estate attorney to see if you can put in a stipulation to void the contract if the home is not complete within a certain time.

Also with new homes you have to get an inspection and make sure the inspector is licensed, experienced and checks everything possible. Believe it or not many new homes are not built well, many installations aren't done properly and so on.

Go through the contract with fine tooth comb at home and then bring it back to your attorney with any questions you may have. There may be hidden fees as well so don't be afraid to take your time before you sign.


Ask the builders if they are working with a particular lender to give special rates, if the seller will pay for closing costs or assist with financing in any way.

The benefit of buying a home that's not built yet is that you should get it at a discount price, and you get to work with the builder to customize it.

Good luck with your purchase.
0 votes Thank Flag Link Thu May 3, 2012
On new homes I would be careful with price. Sometimes like a new car when you "drive it off the lot" you lose some value. They usually sell at a decent premium to a used house (especially if short sale or REO) and I've seen buyers end up under water after they close. If you plan to stay put for a long time this shouldn't be an issue.
0 votes Thank Flag Link Sun Feb 5, 2012
Drumstix- As mentioned - the "Builder" wants to be certain you have the qualifications for the dollar amount needed for financing.

When you are ready to seek financing you are not "Committed" to their Lender. You may select someone else.

I suggest you gain more knowledge on financing. My "Little Mortgage Book" http://www.umboc.com will help you to easily make "Informed Decisions."

Happy Construction - Rudi Hofmann
Web Reference: http://www.RudisList.com
0 votes Thank Flag Link Sun Feb 5, 2012
Drumstix,
The builders want you to fill out the prequalification to be sure you are a serious potential buyer. Much like buying an existing home, buyers that make an offer with a prequalification letter is always taken more serious. I would encourage you to fill out the application to be taken serious. Also, if they have a list of buyers already on their priority list and they decide not to buy, you will move up the list. You don't have to use their lender when the time comes to purchase. Since the property is not built yet it allows you time to save more money and shop for the best rate. When you buy new, there is always things that will need to be done once you move in. If you want a real estate agent to represent you ( at no cost to you ) I am glad to help. I am local here in Brea.

Good luck on your plans!

If have more questions feel free to contact me.
0 votes Thank Flag Link Sun Feb 5, 2012
Drumstix, you would need to be prequalified to buy ANY property, anywhere, new or used. Even if you intended to pay cash, you would have to show them that you actually have the cash to buy the place.
Web Reference: http://SouthOC.info
0 votes Thank Flag Link Sat Jan 28, 2012
I'd encourage you to fill out the app. They want to make sure you are serious. You don't have to use their lender in the end but I have found that they do offer very competitive rates and incentives. If you want a real estate agent to represent you ( at no cost to you ) to help you through the process you can do that too.

Good luck on your plans!

If have more questions feel free to contact me.
Web Reference: http://Www.aaronzapata.com
0 votes Thank Flag Link Sat Jan 28, 2012
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