June 2021

6 ways to help new construction homebuyers

It's peak home buying season, and buyers are looking for options. New construction homes can be a great opportunity for buyers to get a home that is literally built to meet their needs. But the process can be complicated. Here are six ways you can help smooth the way.

Be your buyer’s advocate.

The builder's sales agent is friendly and helpful, but in the end, the sales agent is looking out for the builder's best interests. You clients need someone who’s on their side and is dedicated to making sure they get the best possible deal.

Steer them toward quality homebuilders.

If you've been working in your market for a while, you probably know which builders have a good reputation for quality, timeliness and flexibility about options. If you're new to the area, make it your business to find out which builders you can rely on to treat your clients right.

Be sure they're prequalified or preapproved.

As with any home purchase, prequalificationFootnote1 or preapprovalFootnote2 is important so your clients have an idea of their price range. In addition, the builder's preferred lender may not be the best choice for your client. You can advise them based on your experience with lenders who understand new construction. If possible, their chosen lender should offer an extended rate lock to protect their rate while the home is being built.

Help them understand their choices.

Buyers need to look at more than a well-staged model and some glossy site renderings. Review the site plan with them to be sure their chosen lot isn't on a steep grade and there's no drainage ditch or other unsightly feature in or near their yard. You can also help them understand which features are part of the base home package and which are (possibly expensive) add-ons.

Negotiate where it makes sense.

When it comes to negotiation, builders are unlikely to budge on the base price of a home, but there is usually flexibility regarding upgrades and extras. Your know-how can help clients choose features that will both enhance their lives and add value to the home.

Don’t let them skip the home inspection.

Even the best builders make mistakes, so a home inspection is just as important with new construction as it is with existing homes. In this case, you want to be sure the home is up to code and that everything the client asked for has been done. If possible, plan for two inspections, one before the walls are in and one just before the final walk-through, to make sure the home is built well inside and out.

A note from your lending specialist:

If your buyers are looking at new construction, I can tell them about Bank of America's Builder Rate Lock AdvantageFootnoteTM, which lets them lock in their rate for up to 12 months while their home is being built.Footnote3

1 Prequalification is neither preapproval nor a commitment to lend; borrower must submit additional information for review and approval.

2 Final loan approval is subject to satisfactory appraisal and title review and no change in borrower credit and financial condition. Preapproval is subject to terms and conditions and timely submission of required documentation; ask your Lending Specialist for details. Preapproval does not commit to the continued availability of the loan program. The interest rate shown in a preapproval is based on current market rates and is not locked. You may choose to lock an interest rate after we receive the complete and executed purchase contract. Borrower must submit purchase contract within 90 days of preapproval. If the rate at time of lock is higher, or a rate lock expires prior to funding, or for adjustable-rate loan programs when the index value rises, we must determine your ability to repay the loan at the higher rate, which may lower the loan amount or invalidate the pre-approval. Not available on all loan products. Not available on refinance loans.

3 A lock-in fee applies. A portion of the lock-in fee may be applied to closing costs at loan closing. If the loan does not close, the lock-in fee may be refunded in full when certain conditions are met and required documentation is timely provided. See the Interest Rate Lock-in Agreement, Confirmation, and Float Down Addendum for details. Time period of the initial rate lock may affect interest rate pricing. Extended rate lock options include 120 days, 180 days, 270 days and 360 days. Buyers should consult with their home builder to help them choose a reasonable closing date when construction will be completed. Float-down option is subject to time limits, other restrictions apply. Not available for all loan programs.

MAP3562093 | 04/2021

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