What is a New Home Development Specialist? New Home Consstruction: Things To Watch Out For, and Why you should seek Representation... There are many good reasons to hire a Buyer's agent, yet someone who is a new construction specialist, will have the experience and aptitude to help you navigate the process of buying inside a new development, so that you will know what to expect before you get into a multi-month contract and potentially save money along the way.  New home developers are required to have their purchase contracts reviewed and approved by the state of California, but that doesn’t mean that the contracts have all of the safeguards that our CAR or SFAR contracts contain. The contracts are created by lawyers that represent the developer and are typically biased to the developer’s advantage.   Here is a short list of issues you should know before you book a tour:   You must elect representation BEFORE you book a tour. Otherwise, the developer may not allow you to elect a representative agent. Buyer’s approval of unit Does the contract allow the buyer to do a ‘punch list’ inspection to determine whether all of the work expected on the unit was completed? Some contracts allow the buyer to inspect but do not create a real contingency that would allow for the buyer to terminate based on the findings of the final walkthrough inspection without loss of deposit funds. The language in the SFAR contract allows the buyer to terminate at “buyer’s sole discretion”. Remember, in some circumstances, the buyer can add an addendum to the stock contract that the developer is using that can create contingencies for the buyer that they would not have without it. Passive contingencies Does the contract have language that automatically assumes buyers approval if the deadline for review is reached and no objection is made? If you pass a deadline with this kind of contingency arrangement then you are no longer capable of objecting to any issues discovered... Signing for Documents Received The majority of new home contracts call for buyers to acknowledge receipt of a list of documents (i.e. Certificate of Final Completion, Title Report, CC & Rs, Budget, etc). Often these documents have not yet been completed and are not part of the disclosure package that is provided. It is not reasonable for the developer’s sales office to expect your client to sign for documents they have not yet received. Just leave the initial line blank for documents not included. Loan Approval Does the buyer have a loan condition? As with the inspection language, just because the buyer is entitled to apply for a loan doesn’t mean that there is a contingency that allows termination without loss of deposit. Additionally, many times the buyer will be required to submit an application to a lender that has been selected by the developer for pre-approval of all buyers. It is not uncommon for the buyer to have an opportunity to work with other lenders, but this does not relieve them of the requirement to submit a loan application to the lender on-site. Transfer Tax Who is expected to pay for transfer taxes? Often times the buyer is expected to pick this cost up. It CAN be negotiated for the developer to pay this fee, which in most cases is around 1% of the purchase cost(!) Parking Does the buyer own a parking space or is it leased? Is the designated spot subject to ‘reassignment’ to a new location? Watch out for parking spaces that do not conform to spaces indicated on the condo map (this is a common area of error with new developments). There may also be additional fees for parking lot maintenance, or purchase of EV chargers... Storage The same issues as you might have with parking apply to storage, and many times this perk can be negotiated into the price, based on availability. Final Walk Through New home seller’s have been known to discourage buyer’s from conducting their final walk through on their unit. Insist on the walk through for your clients. Registration and Representation of the Client The developer’s sales office may be offering a cooperating commission or they may not. If there is a cooperating commission offered it is frequently linked to a requirement that your client be accompanied by you on their first visit to the property, and that you ‘register’ with the sales office as the client’s representative. Hard Earnest Money Some new development contracts are written to require ‘hard earnest money’ deposits that are non-refundable regardless of the situation. Your clients need to know when they are putting their deposits at risk and should be absolutely sure that they are prepared to purchase without the right to the return of their deposits. Rate Locks Many developers have arranged for special financing considerations from lenders and offer long term rate locks that remain in force until the anticipated completion of construction. Look for language that clarifies who pays the fees to maintain the rate and what happens if the construction takes longer then expected. Your client needs to know that if the rate lock expires their monthly costs could go up substantially. If I can act as a resource, or answer questions about a new development, such as availability of units not included in the first phase of selling, be sure to reach out to me directly! Call me at: (415) 806-4966  

As seen in Inman, this recent article was written by Troy Palmquist and published 6/10/24   Lesson Learned: Take your fiduciary responsibility seriously   Find out how 'consummate student' and San Francisco agent Chris Jurach keeps challenging himself to 'learn new things, read and listen to books, and gather fresh ideas' The road to real estate was a long and winding one for San Francisco-area agent Chris Jurach. After a past in media as a field producer traveling to Africa, and in hospitality, working on-camera with star chefs in New York City, Jurach transitioned into real estate, first by managing his family’s investment property in San Francisco. “Becoming a real estate agent has made me a better person, all around,” said Jurach. “It set me on a lifelong path of personal growth. Growing up as a latchkey kid in California, I felt like I was constantly moving. This has embedded a deep understanding of the long-term value of homeownership.” Since meeting his wife at Burning Man, Jurach has been happily married for a decade and is the father of a 7-year-old daughter. “These two inspire me every single day,” he said.   Name: Chris Jurach Title: Real estate advisor Experience: Licensed 8+ years Location: San Francisco and Marin County Brokerage name: Engel & Völkers Rankings: Top 10 percent Realtor (SF) 2018-2021 Transaction sides: 125+ Sales volume: $150 million-plus Awards: Top Producer Marin (2021) What’s the best advice you ever got from a mentor? Practice the highest standard of care as a fiduciary. Know your product. Know what you know, and know what you don’t know. Know when to ask and whom to ask for what you or your client may need. Get to know your market inside and out. The information that you provide should be more specific, more actionable than any information a client could obtain from any online article or a quick answer from one of your competitors. What’s one big lesson you’ve learned in real estate? Your business is your reputation. Agent-to-agent relationships are equal to client relationships — maybe more so since you work with each other and see each other frequently. I learned this through selling listings in high volume. What would you tell a new agent before they start out in the business? Be prepared to adapt and change constantly. You will need to adapt to the cycles of your local market as well as to the evolution of your clients’ needs. Your clients want the most efficient process possible, and they are not going to wait for you to learn it. Don’t waste your client’s time trying to figure something out when you could simply make a referral or bring in the right partner. What podcast has taught you the most? GSD Mode podcast with Joshua Smith. I started listening to every show 10 years ago because his delivery resonated with me. This led me to learn about Russell Shaw, Pat Hiban, Leo Pareja and Jack Cotton, gaining respect and awareness for many of the best brokers from across the country from the 1980s and 1990s on into 2000s, including those who have been through four or five different expansions, two or three major recessions, working in all kinds of markets. Essentially, this opened my mind up to real estate as entrepreneurship, from books like Poor Charlie’s Almanac by Charlie Munger to studying Warren Buffet and Benjamin Hardy. Ultimately, this made me a student of the game and constantly, always leveling up. Being comfortable being uncomfortable.

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The housing market continues to be influenced by the direction of mortgage interest rates and home affordability. As rates decrease, affordability will improve, eventually stimulating more demand. Mortgage rates are expected to gradually decline as the economy slows this year and inflation continues to decrease.     Thinking about buying or selling a home? Contact me 📞  415-806-4966