Welcome to the Reno Real Estate Blog, your ultimate source for insights, trends, and expert opinions on the vibrant real estate market in Reno, Nevada. I'm Joshua Skroch, and I'm thrilled to be your guide through the exciting world of Reno's property landscape. Stay tuned for valuable insights and expert advice that will help you make informed decisions in Reno's ever-evolving real estate world.
With today’s limited inventory, new home builds are on the rise, and are a great option. With a new build you can pick the lot, the model and the upgrades you want, everything is under warranty, and you get to be the first person to live somewhere. Additionally, with new homes, the process seems pretty straight forward, you pick your property, you sign a contract, select your features, and wait for it to get done. Because of this perception, many buyers go at it alone and don’t use an agent to help them through the process. However, in reality, stepping into that builder’s sales office could feel very much like walking into a car dealership, you find yourself on guard at every turn, and all you hope for is making sure you don’t get a bad deal. By the time something goes wrong, and you realize that you want someone to help you through the process, it might be too late.
There is a lot more to buying a new home than what was mentioned above, and having someone that can guide you through the building process all while looking out for your interests will make your home buying experience a great one. With that being said, I have put a list of reasons why you should have an agent working for you when buying a new home.
Bonus:
Accompany you on your final walkthrough. These walkthroughs are usually a couple of hours, and builders will overwhelm you with information. In this environment, it is easy for important items to get overlooked. Your agent will take pictures of items that need attention, and make sure all items are checked.
The above list is not by any means complete, but it should give you a general idea why having an agent work for you is a great choice.
If you have interest in new homes, feel free to reach out, and I can help you out.
When it comes to buying a home, a lot of people aren’t quite sure what an agent does for them. Especially if it’s their first time buying. Many times, people just think that an agent just shows them the property, and fills out a form so they can buy it. And truth be told, there are agents out there, that all they do is pretty much that. However, buying a home is a complicated and involved process, and most people don’t know what services they should be getting when they hire an agent to bring them through that process. So, with that in mind, I’ve decided to put together a list of 30 things agents should be doing when helping people buy homes, which I have shared it below.
30 Things Your Agent Should Be Doing for You When Buying a Home:
Again, not all agents provide these services, but when you decide to embark on what is going to be the most expensive investment of your life, you want to make sure you are getting all the help you can. It will give you confidence when buying your home, and ensure
In today’s low inventory real estate market, I find a lot of my clients are beginning to look at buying a new home versus a resale. New homes are a great option. With a new home, you can have a lot of flexibility with regards to where the home is located, what model you want, and what upgrades you’ll need. When it comes to your list of wants and needs, you can most likely get everything you need as well as most of your wants, as long as you’re willing to pay for it. New home communities also provide a lot peace of mind, to you as a buyer. It is helps knowing that any issues with the property will be taken care of by the developer. Also, depending on the developer and on the market, there might be buyer incentives and/or discounts that will help with financing, upgrades, etc. a lot of my clients have found new homes as a good option that was able to fulfill their needs, and it might be the right move for you as well. But, before scheduling an appointment at your new home community of choice, there are a few things that I have learned over the years that you may want to be aware of. Things that, if my clients and I would have known sooner, we would have approached the transaction very differently. So, here are a few things to look out for when buying a new home.
High-Pressure Sales Environment
New home sales is a high-pressure sales environment, and this is why. The developer doesn’t have a pot of money that they use to build all the homes in the development, they actually need to borrow the money. They go to the bank and get a construction loan. In general, these loans are short-term with high interest rates, and are very expensive for the developer. So, once they sell a home, they immediately use the proceeds to pay down the loan, all while racking up new debt to build the next house. This business model puts developers under a lot of pressure to get homes sold, so they can get out from underneath the bank. They will pass this pressure along to you in the form of sales.
Since the developer has a lot of motivation to sell their properties, they impress upon their sales people that same motivation. So, while in the sales office, it is not uncommon for the person behind the desk representing the builder to steer you towards homes that are more advantageous for them to sell. For instance, the house on the corner is the one you like, but they may give you a “special deal” on the one with the smaller lot located a few doors down. And the reason they are doing this is because they have had a hard time getting that home sold, and the loan for it is coming due in the next month.
These salespeople have been trained and are excellent at creating urgency. They’ll tell you stories of a home that just fell out of escrow and needs a new buyer, or one that is almost complete and they have to sell at a discount, or that the specific model you’re interested is very popular, and won’t be available for long, and so on and so forth. Although these statements may be true, they imply that there is a line of buyers standing out the door, and if you don’t act right away, you will miss out. Take it from me, who has represented many clients in new home sales. These stories always come up at every visit with every client, and without an agent there to help you sift through their high-pressured sales pitches, you can find yourself experiencing a lot of pressure to buy, and in some cases even worse, you may experience buyer’s remorse.
Developers Write the Rules
In addition to the high-pressure sales reps, the developer has created an environment that gives them the upper hand at every turn. Their lawyers write the contracts with their interests in mind. This means that everything in the contract favors the builder over you. For instance, a lot of builders use the excuse of construction delays, and can have up to two years to finish a home. If you’re tired of waiting and decide to cancel the contract, you’ll lose your deposits. Another way builders protect themselves is through the appraisal. Let’s say you have a home built, and by the time it’s finished, the market may have leveled out a bit, maybe went down, or the cost of the upgrades pushed it to a point where it doesn’t appraise; the builder is not required to renegotiate the price, and even worse, in most cases you either need to come up with the difference or back out of the deal, in which case you’ll lose all your deposit money. Many times, the sales reps in the office just gloss over these nuances when going over the contract, and most consumers are aware of these potential pitfalls. This is why, having an agent with you when going through the contract is extremely important.
Developers Have a Home Court Advantage
the moment when you get your keys, every person you’ve interacted with works for the developer. The sales agent works for them. The preferred lender works for them, and is usually a subsidiary of the developer’s parent company. The title and escrow company (who is supposed to be neutral third-party) is all picked by the developer, and is likely a company owned by them as well. The design center is hired by the builder to push the upgrades they want you buy. It’s very similar to a car dealership when you have to go through the salesperson, then the finance officer, and then the extended warranty rep before being able to drive off the lot. Everybody there is trying to sell you something.
It’s for these reasons that having an agent represent you is so important, and the builder knows that. That is why they require agents to be present at a buyers first visit. If an agent isn’t there at the beginning, they’ll refuse to pay that agent a commission putting the buyer in a position to either pay their agent on their own, or proceed without any representation. Which brings me to my biggest piece of advice when it comes to buying a new home. Always have your agent present. Whether it’s your first visit or your seventeenth visit, have your representation present. This way your agent can ask all the right questions, take extensive notes, keep the sales agents accountable, and make sure any promises made by the sales team are put into writing, ensuring you have a smooth transaction.
Key Point
Again, new homes are a great option for many, and having something that is built to your liking is unmatched. It’s just important to know what you are walking into before you do.
Finding a home can be quite the emotional rollercoaster. There’ll be many homes you’ll see and love, but for one reason or another, a home that you were excited about seeing online, just isn’t that great in real life. Maybe the yard is too small, or the layout is weird. Maybe it feels closed in or possibly the neighborhood seems too crowded. Sometimes you can be overwhelmed by what’s out there as well. Do you want a big yard or a small one? Are you looking for a home or a condo? What type of flooring are you wanting? What area do you want to live in? So many things to consider. Knowing that a home is a long-term commitment, you definitely want to make the best choice when it comes to selecting a home.
Because there are so many variables that go into selecting a home, it’s important to put together a list of what you’re looking for. This list would include the area, the type of home, what features and amenities you need, the price range, school districts, etc. Once you’ve written all this down, start to separate these items into two categories; needs and wants. Your needs list should consist of all the non-negotiables. Let’s say you need a home with RV parking so you have a place to park your trailer, this may be a non-negotiable. Another example would be school zones. Maybe you want to make sure that your kids can attend the school of your choice. This list should be short by design, and usually include what I call the big three:
1 - Location/Area
2 - Size/Home Type
3 - Budget
Having this list put together is the best way to know what is most important to you and what shouldn’t bend on. Let’s go a little deeper into the big three.
Location is going to be the most important thing when looking for a home. You want to take into consideration all aspects of different locations. Here are ten questions you may want to ask yourself when considering location:
Finding the area, you want might be difficult at first, and depending on the market conditions, you might have to be flexible on some of the above items, but this list will help guide you when determining a location to live in.
Once you’ve selected your area, you now want to select what type of home you need. How big does it need to be? Do you need land? How many bedrooms and bathrooms do you need? These are all questions you’ll need to answer based on your family’s needs. In addition, you’ll need to know what type of home you’re looking for. Answers to the above questions should help you narrow that down. For instance, if you need a place to park your RV, a condo or townhome are not going to work out very well. You’ll most likely be looking at a stick built or manufactured home.
When buying a home, there are four basic types of homes to choose from, and each with their own set of pros and cons. Let’s take a look:
Stick Built - This is your standard home. It has a foundation and is built from the ground up. You own the home and the land. It is a single unit and isn’t attached to any other homes.
Pros - More privacy, you don't share a wall with a neighbor, there is yard space, greater potential for growth in value.
Cons - Maintenance costs are higher (roofs, siding, HVAC, landscaping, etc.), higher priced.
Manufactured Home - This is when a home is built in a factory, and then delivered to an empty lot. Once there it is put together and placed on a permanent foundation. Just like stick built homes, you would own the home and the land.
Pros - Usually they’re less expensive. It’s common for these homes to be on larger lots. You’re not attached to a neighbor.
Cons - Because these homes have to be delivered from a factory, they are built in a manner that makes them lite-weight and are not as sturdy as your typical stick built home. They don’t hold their value as well as a stick built home.
Townhomes- These are homes that are attached to other homes and share various elements in common, such as roofs, siding and foundations. Even though your home is attached to your neighbor, you still own the land that your home sits on.
Pros - Maintenance costs are low because the outside is maintained by a homeowners’ association. More affordable than a stick built or manufactured home. Because townhomes come with land, they’re more likely to have a small yard. Townhomes are single units that don’t have units above or below.
Cons - HOA fees can get pretty high, the land attached to the property can be small. They share a wall with at least one neighbor, possibly two.
Condominiums - Much like townhomes where there will be units on both sides, they can also be stacked. And this because with a condo, you only own the air space. The land under the building is owned by the HOA. So, everything inside your unit is your property, everything else property of the home owner’s association. Many condos have decks or patios that are part of the units and can be used for outdoor space.
Pros - Less expensive than most other forms of real estate. Maintenance costs are low. A lot of condos have community pools, parks, gyms, etc.
Cons - HOA fees can be expensive. There can be neighbors above, below and on both sides. Due to various lending guidelines, it can be hard to get financing for a condominium.
The type of home you want will tie into the area as well. Many towns and cities are sectioned off into different zones that only allow one type of housing or another. For instance, a suburban part of town may only allow stick built homes while the downtown area may only allow condominiums. You’ll find similar styles of homes will be clustered together in different areas.
Area will also tie into budget. The number one determinant of any piece of real estate is its location. Therefore, you’ll need to find a location that fits your budget. When deciding on a budget to look for homes, it’s always best to look for homes just a little bit below your top end budget. For instance, if the high end of your budget is $450,000, it would be a good idea to look at homes in the $420,000 to $430,000 range. This way, you’ll have some wiggle room in case you have to go over the list price, or in case you need to save money to do upgrades like new paint or flooring. In a seller’s market, starting in a lower price range is a great way to get ahead of the market. It’s common for many buyers to start at the top of their budget, only to be let down when they get beat out by other buyers with more purchasing power. The other danger of chasing homes that are at the top of your budget and slightly out of reach is; the homes in the lower price range are quickly moving up in value and will soon be in the price range where you are stuck spinning your wheels. It would’ve been easier to purchase a similar home a couple months earlier when it was $10,000 to $20,000 cheaper.
In a buyer’s market, your budget strategy would be different. You could start your home search at a price that is a little bit above your budget. The reason being is because in a buyer’s market, there is a lot more inventory available than there are buyers, this causes homes to sit on the market longer, and in turn, sellers will drop their prices. When looking at homes in a buyer’s market, if it’s a little bit above your price range, and the home has been on the market for a while, there is a good chance that you can talk the seller down on price, therefore getting more home for your money. Also, when homes are overpriced, a lot of buyers ignore them. This gives you the opportunity to negotiate with the seller without any real competition. In either market, you’ll need to land on a number that you feel comfortable with, since buying a home is a long-term commitment.
The next list is your wants list. This list consists of all the items you want in a home, but don’t necessarily have to have. Where the needs list consists of items that can’t be changed, items like type of home, size of home, and location, the wants list can be more fluid. They can be things that depending on the circumstance, you’d be willing to compromise on them. For example, something you really want is wood floors, but you found a home that is in the neighborhood you love, but it’s carpeted throughout. Even though it’s not something you want, you’ll definitely consider it since it is $20,000 less than the other homes you’ve looked at. It might be worth it to you to buy the less expensive home and put the wood flooring in afterward.
Another situation could be that in a low inventory market, there just aren’t enough homes available, so waiting for the perfect home that has everything you want could be detrimental. In the time you spend looking for a home that has it all, prices will rise, and you’ll find it harder and harder to find anything that will work. On the other hand, in a high inventory market, there may be so many options that you may feel like there is a more perfect home out there, and you pass over many great opportunities in search of it.
In a lot of cases, buyers get about eighty percent of all their wants, and then have to compromise on the rest. Whether it be painting the home new color, adding hardwood floors, relandscaping, etc. Unfortunately, unless you build a custom home, getting one-hundred percent of what you want is unlikely, and even then, there are things that homeowners want to change over time. With that in mind, you’ll want to write down all your wants on a list and put them into two categories, love to have, and like to have. This will help you prioritize what is most important, and will give you clarity when looking at different homes.
Whether this is your first home buying experience, or your tenth, the process for buying a home is very emotional and can cause a lot of stress. Taking the time to evaluate your needs and your wants, and deciding what is and isn’t negotiable, will not only save you time, but it will make your decision-making process easier.
