New Construction Or Resale In Georgetown, Texas? What Buyers Should Weigh Right Now

Buyers in Georgetown, Texas, and across Williamson County have plenty of new construction to choose from right now. According to Realtor Tanya Kerr of T Kerr Property Group, builder incentives are giving new homes a clear edge over many resale listings, but buyers need to look past the advertised monthly payment before deciding.

Many buyers also walk into a model home without their own agent, assuming the builder’s sales rep has them covered. Kerr says that assumption can cost them.

Why Builder Incentives Are Hard To Beat Right Now

Builders are using incentives such as interest rate buy-downs, closing cost help and price reductions to attract buyers. A rate buy-down lowers the buyer’s mortgage rate, which can shrink the monthly payment even on a more expensive home.

Kerr says that in some scenarios, a $650,000 new home with a rate buy-down can come with a lower monthly payment than a $500,000 resale home financed at today’s rates. Add a builder warranty and the appeal of a brand-new house, and many buyers lean toward new construction.

Timing matters too. Builders tend to get more aggressive with incentives toward the end of the year, which is when Kerr often sees buyers gravitate toward new homes.

“Those incentives make it very difficult for resale homes to compete with builders right now,” Kerr says. Resale sellers who want to stay competitive need to understand the market and price with it in mind.

Who Is Representing You In The Model Home?

Kerr says builder sales reps are great to work with, but the builder signs their paycheck. Their job is to sell homes, not to check whether a house is built correctly or make sure the buyer gets everything they’re paying for.

On one purchase, tile in a new home was laid with uneven grout lines, some nearly touching and some about half an inch wide. The builder and sales rep didn’t see a problem. Kerr kept pushing, even tracking the builder down directly, and her buyer received a substantial credit to have the tile redone after closing.

“Without an agent willing to advocate for them, those buyers likely would have been told the work was fine and expected to close as is,” Kerr says.

Relationships also matter. Because Kerr’s team sells a lot of new construction and brings builders repeat business, builders tend to move quickly to their best numbers on incentives, closing costs, rate buy-downs and price. That experience is a big part of how the team represents buyers on new construction.

“When builders know you and have worked with you over time, negotiations get to the best numbers much faster,” she says.

Kerr also recommends an independent inspection on every new home. Builders have city inspections and their own quality control process, but those inspectors don’t work for the buyer.

Costs New Construction Buyers Often Miss

The monthly payment a builder shows isn’t always the full picture. Kerr points to a few costs buyers tend to overlook:

• HOA dues. Lenders generally don’t include HOA dues in their fee worksheet, so buyers can forget an extra $35 to $100 a month, or more.

• Property tax estimates. Special district costs, such as MUDs and PIDs, are usually built into the tax rate. But to show a lower payment, a builder may estimate taxes on 70% to 85% of the sales price instead of the full price, which can lead to an escrow shortage once the home is assessed. Kerr says these district taxes can change a payment by hundreds of dollars a month.

• Move-in items. A washer, dryer, refrigerator and window blinds may not be included, but they may be able to be negotiated into the sale. 

• Paint. Builders often use an economical flat paint that shows fingerprints and dings, so plan to repaint within about five years.

When A Resale Home Makes More Sense

A resale home can be the better choice, especially for buyers who care more about the purchase price than the interest rate. Inside a new construction community, Kerr says a resale home is often priced lower than a comparable new build.

Resale homes also offer advantages a new build can’t match yet. Landscaping is more mature, and the previous owner may have already fixed early issues, like a noisy air conditioner. Resale homes may also include upgrades the first owner added and sit on more desirable lots, since those often sell first.

Whichever route a buyer takes, Kerr’s advice is the same: compare the full monthly cost, not just the price, and have someone in the transaction who works for you.

About T Kerr Property Group

T Kerr Property Group is a real estate team founded by Tanya Kerr, serving Georgetown, Round Rock, Liberty Hill, and the greater Williamson County and Central Texas market. The team focuses on luxury homes, 1+ acre homesites, and buyers relocating to the area, and is affiliated with Keller Williams Realty Lone Star.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.