Chris Dunham~The Real Estate Guy!: Buying a house - the Rules of Engagement

Buying a house - the Rules of Engagement

The rules of engagement when pursuing a brand new home


Don't be fooled, the on site sales agent(s) represent the seller, which is in fact, the Builder. So there role is to convince the buyer to spend as much money as possibly-selling the American Dream of "Consumerism". Consumer is a very interesting word isn't it? We've been led to believe over our lives that we are consumers, that is we purchase products, invest in our communities by doing so-whether a mom and pop shop or a big box store. We are making the world go round. (My opinion of course).

Its not different when we see a new car advertised, if it appeals to us, regardless of our "means" most would go out and purchase, new or  new for the most part as what we see, we want. We must Consume this. When searching for a new home, as I have done recently, I have paid closer attention this time, as I am "representing myself" as opposed to representing a client. When we represent our clients, I always do so with a few things in mind: 1) Resale, what is the resale appeal of the home they are looking at (new or older). 2) Price range. what are they spending. If they are buying new, what is the cost of upgrades while building relative vs. the cost of upgrades once moved in? IE, if it costs $20k to upgrade the carpet and pad while the home is being built, can they upgrade the carpet and pad after the home is completed, prior to moving in for less?

Now, most buyers would rather have all the options and upgrades done on move in, it's a convenience thing, I get it, but if this convenience is costing you $20-30k or even more, and you have the means to purchase outside the purchase of the home and complete prior to moving in-I think it would be a better option. Remember, all the options and upgrades in a NEW home are financed. You're financing that wood plank tile flooring, amortizing it over 30 years. You're financing those window coverings, upgraded appliances and so on. Not saying this is a bad deal, but something to be considered when building a new home.


So here are my rules of engagement.


1) Never step foot into a new home community without representation.Buyers agents represent the buyer, they ensure the buyers rights are protected. remember, the on-site agent works for the builder, all you are to them is a number.  I could tell you stories that prove this point, but I'd rather not throw people under the bus.

2) Know your buying power. Too many times I have seen a buyer thinking they are able to get approved for X Amount of money, find a new home they love (online) then reach out to me to begin walking the process. I suggest they get approved, they decline as they want to use the Builders lender, only to discover they cannot be approved and they are emotionally crushed. Getting approved with an outside lender is best, get a full underwritten approval, then you'll know and the peace of mind knowing is worth its weight in gold.

3) Choose the right Realtor to represent you. Don't just randomly choose someone you don't know. At the same time, choose someone with experience. IE, if your girlfriend's BFF Is a Realtor, probably not a good choice unless he/she has been selling homes for a few years and has at least 50 transactions under their belt. Experience counts here. No different than you getting a wisdom tooth pulled. Are you going to a dentist who's been in business for 2 days or one who's been in business for 2 years. After all, this person you choose is going to be standing next to you, from start to finish (well, at least they should be) and getting paid to do so, so make sure they know what they're doing, have your best interest in mind and will stand up and fight for you when the builder falls short of expectations and/or promises made.

4) Control yourself at the design center.During my 20 years of selling homes in Arizona. I have always made ita point, to keep my clients "level headed" while at the design center. Its extremely easy to walk in and spend $100k without even realizing it. Know what you're spending as you choose the item(s). Know the upgrade costs associated with the actual upgrade. Did you know the difference in the elevation is a cost? Typically, builders will offer 3 different elevations (how it looks from the street) first one is always "Free" while the next two, cost more. Lot size costs. Most home builders in Arizona have small lots nowadays, 6500-7500 max. But, they will have larger lot options, and those are pricey. A recent community we looked at, offered a 14,500 square foot lot, with a $15,000 premium, yet their 12,000 square foot lot (standard for the larger foot print home we were looking at) was zero premium. This builder did/does, dictate the style of home to be built on specific lots. And of course, the base price for the homes on the 12k lots, about $50k more than those on the traditional lot (6500-7500 total square feet).


At the end of the day, everyone begin their search online (well, maybe not everyone, but a high percentage of home buyers do). Be prepared is my advice. Having yourself approved for a mortgage will go a long way in alleviating any stress associated with the bottom line. A big misconception is "my credit score will drop if I have two or three lenders pull it" this is untrue, I've done this, when I purchased, my score didn't change. What I have been told over the years by my preferred lenders, if a buyer talks to one back, a credit union and a broker (as an example) the credit bureaus recognize the buyer is shopping for a mortgage, looking at rates, cost and fees associated with 3 different companies....its called being a good "Consumer" (there's that word again).

Just remember, when you're online shopping for houses, I see you:



Chris Dunham
The Real Estate Guy™


"Equal Housing Opportunity"

Brokered by eXp Realty Arizona

Comment balloon 1 commentChris Dunham • August 06 2019 06:03PM


Chris Dunham very valuable report for buying a house - the rules of engagement.

Posted by John Pusa, Your All Time Realtor With Exceptional Service (Berkshire Hathaway Home Services Crest) 11 months ago