Tips on Buying a New Construction Home in Pennsylvania
Thinking of buying a new construction home in Pennsylvania? That thought should be both exciting and terrifying at the same time, even if this is not your first home. Below are a few tips that will make this home buying process less stressful, and, ultimately, more enjoyable.
Do Not Allow the Builder's Representative to Represent You.This section should be self-evident and completely unnecessary for folks who are thinking about making one of the largest purchases in their lifetimes - especially where the home is not yet built. Unfortunately, my experience tells me that a large number of buyers in a new construction development do not consider obtaining their own representation until after they have signed the legal papers and run into trouble. The usual explanations sound something like one or a combination of these: the on-site salesperson assured the buyer that the agent would take care of everything for the buyer; the on-site salesperson suggested that outside representation was not necessary and would cost extra; the on-site salesperson suggested that all of the contract documents were standard and could not be changed anyway; or the on-site salesperson told the buyer that outside representation could only be used IF that person came with the buyer to their first visit to the development site. The truth is, the builder's real estate agent, or possibly worse, the builder's own salesperson works for the builder, not the buyer, and it is simpler to just deal with an unrepresented buyer. I cannot stress this point enough, for peace of mind throughout the transaction and beyond, obtain your own representative whose loyalties are to you alone and not to the builder, however reputable it may be. As explained below, this may cost you a little more to buy the new home, but in the grand scheme of things is well worth the price.
Hire a Real Estate Attorney, Not Just a Real Estate Agent, to Represent YouOk, this point may seem self-serving at first glance, but it is extremely relevant when dealing with new construction in Pennsylvania. Think about it, you do not need anyone to open any doors for you here, or to fill out a standard agreement of sale for you, or even to arrange for inspections - the on-site salesperson will do that and more. What you need is someone to read, interpret, negotiate, revise and possibly fight over the builder's own contracts for you (that their own attorneys have created). In Pennsylvania (as most other states) real estate agents and brokers (licensees) are prohibited from doing those types of things as they constitute the practice of law. Only an experienced Real Estate Attorney can represent your interests in this situation. However, as I fully am aware, this can be fairly time-consuming and costly considering the fact that the builder will most likely offer to pay a portion of a real estate agent's commission but not legal fees (most builders would rather deal with buyers' real estate agents than with buyers' attorneys). A great solution in Pennsylvania is to hire an experienced Real Estate Attorney who also is a licensed Pennsylvania Real Estate Broker, that way the real estate commissions offered by the builder to the real estate broker can offset the legal fees otherwise due. I am, like some other Real Estate Attorneys on Avvo are, so dually licensed in Pennsylvania and would be happy to discuss this option with you.
Choose Your Representative Before You Visit the DevelopmentOne final point which is not readily known until it seems too late is to choose your representative before you visit the new construction site. Many builders, especially larger builders, have a strict policy that they will only pay real estate commissions IF the representative is present at the buyer's first visit to the site. Usually there is some wiggle room if the buyer notifies the builder of the representative's name and the representative contacts the builder within a set number of days. While it still is imperative that you hire your own representative no matter what, it always is better in a real estate transaction to get the seller to pay at least a portion of those fees (especially when the purchase price reflects that reality). My suggestion is to find a dually licensed Pennsylvania Real Estate Attorney/Broker that you like, and keep his information handy just in case you find yourself pulling into a new construction open house some sunny day. Happy new construction hunting.