Denver Real Estate Blog

Denver Master Planned Community Builders

Master Planned Communities are large new home communities that typically feature community entries, parks, recreational areas, schools and community shopping. Within a planned community there are smaller communities offering a variety of home styles and price levels to choose from. In most cases you will have a number of experienced builders each featuring a number of floor plans and price points.

Denver has a number of really awesome master planned communities, but just what is a master planned community? A perfect example and one of the most successful not only in the Denver Colorado metropolitan area but also considered to be one of the finest is the nation is Highlands Ranch.

Many new home buyers believe if they buy directly from the builder they will save money. This generally is not the case. Most new home builders are members of the Builder Realtor Council. The BRC’s builder members agree to pay Realtors a selling commission if they are involved in the transaction on behalf of a buyer. If a Realtor is not involved in the purchase transaction, the builder retains that commission money. That money is not offered to the buyer in the form of a credit or a reduction in purchase price. Therefore, there is no financial savings for the buyer by not using a Realtor in the transaction.

More important is the fact that the buyer is negotiating with the builder without representation. In Colorado, the Colorado Real Estate Commission prepares and approves purchase contracts that are intended to protect the rights of both the buyer and seller. New home builders do not fall under the rules and regulations of the Colorado Real Estate Commission, and as a result, do not have to comply with standard regulations including the preparation and use of commission-approved forms. The builder purchase contract forms are traditionally worded to favor the builder – they are not drafted with the intent to protect the interests of the buyer.

Use a Realtor

Building a new home is a major event. Undertaking this event without the benefit of the representation and expertise of a Realtor is not a wise decision. Realtors can minimize the problems involved and can provide peace of mind for the new home buyer – making the new home building process a more pleasant experience.
Surprisingly, most buyers who attempt to save money by negotiating directly with the builder without the expertise and guidance of a Realtor also choose not to retain an attorney to review the builder purchase contract. Usually, the attorney and the Realtor are contacted after problems are discovered – often when it is too late to eliminate the problem. This “after-the-fact” approach can be very costly to the buyer.

Understanding that there is no financial savings to negotiate with the builder without a Realtor, it is important to know that Realtors are familiar with new home construction and are accustomed to working with builders and their purchase contracts. Realtors can recommend the inclusion of language in builder purchase contracts that protect the buyer. For example, most Realtors recommend to buyers that they retain the services of an expert (i.e., architect, building inspector, engineer) and have them visit the property while it is under construction and following the completion of construction to insure that any problems are addressed properly. The Realtor will often recommend the inclusion of language that provides for these inspections as well as “walk through” of the property as a contingency to closing.

Realtors can also address other concerns that protect the buyer’s interest (i.e., receipt, review and approval of title work and homeowner association bylaws and covenants) so that the buyer can terminate the builder purchase contract in the event conditions in any of the documents do not meet with their approval.

Realtors may also be able to negotiate upgrades at no additional costs, closing extensions without penalty, recommendations of experts, other improvements (i.e., landscaping, security systems, sprinkler systems), radon mitigation before and following the purchase of the property, and address a number of other significant issues that directly impact the buyer’s purchase and eventual resale of the property.

Realtor – Not a synonym for real estate agent

A quick reminder that a person who is a real estate agent is not necessarily a Realtor. A Realtor is a real estate agent who is a member of the National Association of Realtors and who subscribes to NAR’s strict Code of Ethics. This, code provides guidelines and rules for Realtors to practice real estate in an ethical manner, ensuring the safety of both the seller and buyer. Being a Realtor is voluntary, but those who choose to belong demonstrate an unwavering desire to provide the best services for their clients. Only real estate agents who are members of NAR can use the term “Realtor.”

If you would like additional information about real estate in Denver Colorado as well as anywhere in Denver Metro Area contact us at 1-800-791-3990 ext 232.

Jeffery McClintock, is a real estate broker in Denver and prides himself on providing clients with professional guidance in all phases of residential new construction, including market research, product development, consulting, marketing and advertising. His personal mission is to bring to you a level of knowledge, experience, commitment, high standards and results to answer your real estate needs. He believes, the most effective way to provide superior service is to build a strong working relationship with you. His system includes regular consultations and feedback, which is the best tool for identifying and clarifying your real estate objectives and help define strategic solutions.