SELLING NEW HOMES VS. RESALE It’s not apples to apples

Laura Kelly Mance
CRB, REALTOR® / President
Long Realty


You would think that selling newly built homes and resale in Arizona would be a similar process…a) they’re houses and b) there’s Buyer and a Seller. That’s about where the similarity ends. If you want to practice “within your area of expertise” you’ll need to do your homework. It’s well worth it though. Selling new homes can be lots of fun. Your Buyers typically get to select their finishes and end up being the very first owners of the home. Everyone should do it at least once!

How can you help the new home Buyer? By reading the contract and pointing out possible obstacles, arranging inspections during the building process, helping them make design choices that will make it easier to sell down the road and helping the Buyer negotiate effectively. Also, bring a yellow pad to that final walk through and help them find even the tiniest flaws so they can be addressed right away.

When you’re selling resale homes in Arizona, you’re using the Residential Resale Real Estate Purchase Contract each time. When selling new homes you’re using whatever contract the Seller provides, and the terms are not only different from the resale contract but typically different from each other. Yep, you have to read them. Ask for a copy of the contract when you first show the property so you have time to study it. Recently we’ve seen that some builders add a clause that states if the purchaser wants to sell in the future 12 months they must offer it to the builder first for the price they paid. Earnest money is not as easily refunded in the typical builder contract either. Educate your Buyers so they know what to expect.

Let your Buyer know that in order to represent them, you have to accompany and register them the first time they see the property. Find out what the builder is offering for compensation too. Some aren’t “cooperating” these days. In order to represent your Buyer in that event you will need a Buyer Broker agreement and remember, they can’t pay a commission if they are VA Buyers. It gets complicated but your Broker/Manager can help you.

Let’s talk about negotiating. In a former life, I was a new home sales manager for a Tucson developer. I can’t tell you how many times agents would advise their Buyers to offer below the base price of the house and they were setting their Buyers up for disappointment. Think about it this way. If a builder “breaks his price” he’s creating lower comparables that will negatively impact future appraisals. I always said that if a builder breaks price you should consider running away. Discounts on upgrades, appliance credits or lower lot premiums are more likely.

Let the on-site salesperson do their job! They only have one product to sell and they’re good at it. My salespeople used to complain that the Buyer’s agent “rushed them on to their next appointment while the Buyers were mentally choosing floor tile, kitchen cabinets and arranging their furniture.” 

Even if you’re not currently working with a new home Buyer, I encourage you to be familiar with the inventory in your area. Check in with your favorite sites regularly and develop good relationships with the on-site salespeople. Some days are pretty quiet on site and they’d welcome the company. Not all builders will allow their salespeople to accept referral fees but mine did and the agents our salespeople knew and liked got the listing referrals for prospective Buyers who needed to sell first. There is a symbiotic relationship here that few take advantage of.

Right now in Arizona new home permits are up over a year ago but closings are down. That’s the result of supply chain delays and a lack of good building trades. If you have a good knowledge of the new home options in your market area, you’ll be at the head of the line. Becoming proficient at new home sales is a great way to give yourself a raise in 2022.

Laura Kelly Mance, CRB
President, Long Realty Company
(520) 918-3846