An experienced realtor is going to bring a lot of value to the table during the construction process, and here are the three largest benefits they provide.
1. Find Buildable Land for Your New Home
The age-old adage, "location, location, location" isn't just relevant when purchasing an existing home. It's also a key piece of building a custom home. A true custom home builder builds your plans on your land, and working with a realtor can be beneficial when searching for the perfect piece of land to call home:
When choosing a realtor for your new home's construction, they should:
- Have extensive knowledge about the area
- Be well connected in the community
- Have access to listings before they hit the MLS
- Understand due diligence for land development.
With a good realtor on your side, you have a better chance of finding the best possible location for building your dream home. In many cases, it takes both the buyer and a realtor actively searching for land to find the winning lot. As noted above, your realtor will likely have access to listings that haven't been made available on the MLS yet, which allows you to broaden your search.
Three important things only a realtor can bring to the land search process are:
- Understanding Your Land Investment Budget vs Building Costs: Your land budget not exceed 25% of your total build budget. In most cases, anything over that percentage won't be approved for a construction loan.
- Identifying Tear-Down Opportunities: Many people assume a tear-down project will be too expensive but it doesn't add as much to your cost to build as you may think. Your realtor will be able to help you find those properties that are primed for tear-down/build projects.
- Homesite Evaluations: An experienced realtor will know what to look for when assessing the land and how it may impact the land budget. For example, if a lot doesn't have easy access to public utilities, we may need to look at additional line items in the budget for a well and septic. Likewise, a lot covered in mature trees or with a slope will require additional expenses to clear it and possibly add retaining walls.
2. Navigating Financing and the Closing Process
Once the best lot has been found, a realtor can help secure it and navigate the financing process. They'll develop a contract that contains a contingency that gives the buyer an out while they do their due diligence. This allows the builder time to assess the property's topography and utilities to ensure the land is buildable within your budget.
If you've already chosen a home builder, your realtor should bring them in to evaluate a potential lot during your due diligence phase and before you begin design. The builder can offer additional guidance on what needs to be done to prepare a lot for construction and how it may influence the design and overall budget.
In addition, the realtor should share a copy of the neighborhood's indentures with the builder right away. Some communities will require builders to follow certain guidelines like meeting square footage minimums or using certain materials — both of which may impact a your budget.
If the builder finds cause for concern, the realtor can help you get out of the contract and begin the search for a new lot. If the property is determined suitable, they can help you move forward with closing on the homesite.
3. Coordinating Timelines
Timing is everything, and that couldn't be more true when selling an existing home. A skilled realtor can take the builder's estimated construction timeline and use it to coordinate the sale of your existing home. That way you can ensure your new home is ready and you have ample time to move before you close on the sale of your existing home.
The relationship between your realtor and home builder is a collaborative one. Together they can ensure you find the best location for you dream home and that you receive the care and attention they deserve.