Buying New Construction in Greater Phoenix: Why the Builder's Representative Is Not Your Agent

The sales representative is not your advocate

A model-home sales representative is friendly, knowledgeable about the product, and employed by the builder. Their job is to sell homes at the builder's price on the builder's terms. That does not make them dishonest, but it means no one in the room is advising you on whether the lot, the price, the contract or the timeline is right for you.

A buyer's agent is on your side of the table. Olga Boyke helps new-construction buyers compare communities and builders, evaluate lots and floor plans, understand the contract, negotiate incentives and terms, and coordinate inspections and closing, with the buyer's interests as her only focus.

Bring your agent to the first visit

Many builders require buyers to be accompanied by their agent on the first visit, or to register the agent before the first visit, in order for the agent to be recognized. Walking in alone and signing a guest card can limit your ability to bring representation later. If you are relocating, tell your agent before you visit a model home, even virtually, and ask about the builder's registration policy for out-of-state buyers.

Because compensation practices have changed in recent years, discuss in writing how your agent is compensated, including any builder cooperation program, before you tour.

Quick move-in, to-be-built, semi-custom or custom

New construction is not one product. A quick move-in or inventory home is already built or nearly complete and offers speed and certainty. A to-be-built home lets you choose a lot, plan and options but takes longer and exposes you to price escalations and delays. Semi-custom builders offer more flexibility in plans and finishes, and custom builders work with your architect on a unique design. In luxury areas such as North Scottsdale, custom and semi-custom construction can require design review, ESL compliance and a timeline that often runs well beyond a year.

Reading the builder's contract

Builder contracts differ from standard resale forms and are written to protect the builder. Before signing, have your agent explain and, where appropriate, have a real estate attorney review these areas:

• Deposits and refundability, including when earnest money becomes non-refundable.
• Completion date language and what happens if construction is delayed.
• Price protection and escalation for options, materials and lot premiums.
• Financing and incentive conditions, particularly requirements to use the builder's preferred lender or title company.
• Substitution rights, plan changes and square-footage tolerances.
• Warranty terms, dispute-resolution clauses and limits on assignment.

Incentives: compare the full cost

Builders frequently offer incentives such as interest-rate buydowns, closing-cost contributions or upgrade credits. They can be valuable, but they are often tied to the builder's preferred lender and title company and may be reflected in the base price. Compare the full cost: price, rate, fees, upgrades and timeline, against what an independent lender and a lower-priced option would deliver. Olga's background in banking and financial services helps buyers ask the right questions of both lenders.

Upgrades: what to buy from the builder and what to do later

Structural choices, such as lot, orientation, ceiling height, additional garage depth, extended patio, electrical rough-ins, and plumbing rough-ins for outdoor kitchens or pool equipment, are best decided at the time of building. Some finishes, landscaping, pool, window coverings and lighting can often be done aftermarket, sometimes at lower cost. Get quotes before assuming the builder's price is the best value, and keep in mind that some builders restrict outside work before closing.

Inspect at every stage

New does not mean perfect. Independent inspections at key stages, commonly before the drywall is installed, at final completion and before the first-year warranty ends, can find framing, plumbing, electrical, insulation, drainage and finish problems while they are easier and cheaper to correct. Attend the builder's orientation walk-through, document every item in writing, and track the builder's response.

Warranty and Arizona protections

Many builders offer a tiered warranty, commonly one year for workmanship, two years for major systems and ten years for structural defects, but terms vary, so read the actual document. Arizona law also provides protections for purchasers of new homes, including statutes on warranties and a notice-and-opportunity-to-repair process before certain claims are filed. You can verify a contractor's license and complaint history with the Arizona Registrar of Contractors. Ask a real estate attorney about the specifics of your situation.

Check the community, not only the house

You are buying into a neighborhood that may still be under construction for years. Ask for the HOA documents and budget, the Arizona Department of Real Estate public report for the subdivision where applicable, any Community Facilities District or special assessment, and the plans for adjacent parcels, commercial development, roads and power lines. Check how many lots remain unsold, and whether the builder will keep releasing homes at lower prices after you purchase. Visit at different times of day and in summer.

These issues are particularly relevant in fast-growing areas such as North Peoria and North Glendale. See our guide to North Peoria and North Glendale homes.

Buying new construction from out of state

Relocating buyers, such as families moving from Chicago, often like new construction because of its predictability: no deferred maintenance, modern systems and a single point of coordination. The tradeoff is timing, since a to-be-built home may not be ready for many months. Quick move-in homes can match the schedule of your Illinois sale more precisely. Your agent can attend inspections and walk-throughs on your behalf, and most paperwork can be signed electronically. For the full roadmap, read Moving from Chicago to Arizona.