February 24, 2018

Making it work for new homes

time-is-moneyRecently I was in process of selling a new home. Most people don’t realize that over 70% of new home sales are completed with a Licensed Real Estate Agent. Builders and Realtors usually work well with each other. Another little known fact is that New Home salespeople do not have to have a Real Estate license. They work directly for the builder. It is always nice to have a Licensed Real Estate Agent that has knowledge of the sale of a new homes.

Regarding new home sales it is important to point out what the tax rate is before and after the homestead exemption. In addition it is important to realize that the property tax at the time of sale is based on unimproved property(land only). The lender analysis which is usually in the first quarter of the following year, will base the value of the improved property (house and land). Often the property taxes will increase substantially after the first year.

For example: Land value could be $35,000 for a lot and the house; land could be $300,000. Your tax rate in many areas of Houston is around 2.75%. You multiply the tax rate (after exemptions) to the appraisal district valuation of the property and that is what you or your lender will be billed for each and every year.

When working with the new home sales person it is important for the Real Estate agent to understand how the system works from the builders stand point. A new home salesperson deals with many issues other than just sales. The salesperson is dealing with all of the concerns that people have during the construction of their home. If the salesperson sold ten homes that month they are handling ten families, possibly ten agents and multiple lenders. In addition they are working with the construction superintendent, the municipalities where the homes are located and the people that are above them. In other words they have a full plate. They are often too busy to take care of all of the needs of any particular buyer. That’s where the value of a Licensed Real Estate Agent comes in. As an agent representing the buyer, my concern is for only one buyer.

When you go to a crowded restaurant you can see that they are busy but you still want service. This would be an example of new home sales in our present market. Juggling the needs of all  parties is not always an easy thing to work out. The loan process in today’s world is cumbersome and that’s putting it nicely. The builders have loan payback deadlines. They often work for large corporations that are looking for shareholder profits and are always on the lookout for more land to develop. They are looking at their side.

Not all new home sales are the same. It is important to understand this and work according with each builder to get the most for the customer.

For more information on this or other topics. Just give me a call.

Thank you,

Matt