2 Reasons First-Time Home Buyers Are Choosing New Builds Right Now

CHAPTER 1: INTRODUCTION AND OVERVIEW (0:00) Patriot Nation, there's a time and a season for everything. And I think now is the time and the season to be considering new builds in the new build community, especially if you're a first-time home buyer or second-time home buyer. So, in this video, we're going to talk about where the market is right now with respect to buying homes, period, much less new builds. We'll talk about the advantages and disadvantages of new builds. I'm going to wrap up with an example of how negotiating is so important, especially in the new build community, and how someone like myself can save you quite a bit of money, with a real life example. So, all the best adventures to you. Hit the like and subscribe, share with your family and friends as always, and let's kick off this rodeo right now. Hi folks, I'm Kevin Fagan, The Mortgage Patriot, on your side, nestled here in the Hill Country above San Antonio, Texas, serving all you proud Texans and all you great folks all around the country. We're shooting this in October of 2026. Now is the time to really be considering new builds over other entry-level, first-time and second-time home buyer purchases. Again, hit the like and subscribe, and let's get into that content right now. CHAPTER 2: MARKET TIMING AND CONDITIONS (1:07) Let's talk a little bit about the national market, because the national market, as you know, has softened tremendously. I put out a video back, I think in February of this year, saying it's happening. It's happening now. And what I was discussing in that video, if you check it out, is the consolidation period that we're in. Housing prices typically rise, and then they have a consolidation period where prices either stabilize for two, three, or four years, or even slightly go down, and then they ratchet up again for a five to eight year period, and then they have a consolidation period again. Well, here we are in the consolidation period. So why is that important to you? Because this is the time to be buying. You don't want to be buying as rates come back down and prices start to escalate again. You want to be buying in that softening period. This is where we are now. We have a balanced market right now, meaning it's not a seller's market. They cannot dictate the terms like they could before. We're in a balanced market, such that buyers have equal opportunity to negotiate with the sellers in terms of getting seller concessions, better pricing, and so forth. So now is the time. And the second reason is we have a seasonal factor. I also did a video on when is the best time to be buying during any point in the year. And guess what? Voila. We're in October. As I said, we're shooting this film in October. October, November, December, and the first part of January is the sweet spot of when to be buying. So, we have the seasonality of the calendar, and we have the consolidation phase of the current market we're in overall. Now is the time to be buying a home. And let's get into the reasons why new builds are probably your best bet. CHAPTER 3: ADVANTAGES: INTEREST RATES (2:36) So, let's apply all this to the new build community and buying a new build. Because of the consolidation period that we're in, because of higher interest rates, and because of the seasonality in the calendar that we've entered into, builders are having a hard time moving their inventory. And they have to move inventory, because they have to keep producing. They can't just stop building. So, in order to move their inventory, what do they have to do? They have to provide enormous incentives. And that comes in two very big advantages to you as a new or second-time home buyer: entry-level interest rates, which are very low, and significant seller concessions to lower your closing costs. Both of those are tremendous advantages. Let's talk about the interest rates first. I looked back on a chart. This is a chart from way back beyond 2007. But we're in the highest interest rate environment we've seen since 2007. Right now, our present interest rates are the highest they've been in almost 20 years. Unbelievable to say that. So, for example, on an FHA loan, if you have about a 700-plus score, buying a $300,000 house, the interest rate I'd be quoting is about 6.25% on FHA. It's pretty high. But with the incentives from the builder on the new build side, they might even be lower, but you could easily see 4.25% as a 2-1 buydown, for example. The second year would be 5.25%, and then 6.25% after that. So, what does that save you? Well, 6.25% versus 4.25%, that saves you about $360 and some change per month for the entire year. Incredible. And 5.25% versus 6.25%, that's about $180 per month. So these are big numbers, my friends. That's just one reason why there's a giant advantage right now for buying a new build, and that's the interest rate that you walk into on day one. CHAPTER 4: BUILDER CONCESSIONS AND HELP (4:14) The second big advantage of buying new builds now, in addition to the lower interest rate entry point, is seller concessions, or in this case, builder concessions. So what am I talking about here? Well, again, because of the nature of the phase that we're in, builders are sweating. Listen very carefully. They're sweating. They act like everything's peachy keen, but it's not. They're having trouble moving their inventory. So they've got to give you not only a good interest rate, but they've also got to give you closing cost coverage. They're called builder incentives or builder concessions. So, in terms of putting numbers to it, let's take a $300,000 house. In the state of Texas, it costs about, let's call it, $22,000 to write the check on an FHA loan on a $300,000 house. That includes the down payment, that includes transaction costs, that includes your prepaids and all your escrow accounts. All in, you're going to write a check for about $22,000. So, in the builder world, again, because they need to move that inventory, they're going to give you that nice 2-1 buydown, or maybe a permanent buydown with the lower rate, and this is all negotiated. That's why I've got to help you out. Now, you might get $12,000 worth of builder concessions. So, your $22,000 check that you would have written, minus 12, suddenly you're writing a $10,000 check at closing. That's a pretty dang good deal, folks. But it does require some negotiation. Look very closely at the video I did at the beginning of the year on why not to sign with your builder. It talks about how to negotiate these things, because again, they're going to tell you everything's fine and dandy. They're not going to offer all these things right up front. They don't show you their full hand up front. Why would they? So, you've got to have somebody, a savvy negotiator like myself, who can get you that lower interest rate and get you those incentives to write a low check at closing. Hopefully that all makes sense, because it's important. Let me direct you to this website while I'm thinking about it: webinar.themortgagepatriot.com. You're going to want to check that out, because typically about once a month I do a Thursday evening webinar for first-time home buyers. And I cover everything. And I mean everything. I take you from the pre-approval stage all the way to getting your keys at closing. We go over the six important milestones of that whole journey: getting pre-approved, engaging your loan officer, engaging your realtor, looking for homes, making offers, what to do once you're under contract, and then finally all the things you've got to worry about at closing. So, all the way down the road, you're going to learn a lot. It's a lot of fun, and it's on Thursday evening. So check out webinar.themortgagepatriot.com, see when the next webinar is coming up, and hopefully you can be a part of it and we'll share some fun time together. CHAPTER 5: NEW BUILD PROS AND CONS (6:48) Let's talk briefly about the advantages and disadvantages of new builds right now. I did a video some time ago on that very subject, so I won't get into much detail, but the main thing is customization, right? You're getting the floor plan that you want. You typically get your choice of color schemes, tile and/or flooring types, countertop surfaces. So, you're walking into an environment that's basically of your choosing. That's always a big advantage. The second big advantage, of course, is the warranty. There's a builder warranty, and it's typically bigger than the home warranty that you can buy on an existing home. That's usually a one-year deal. You can buy it every year, but with a new build, the builder's paying for that. And you have different warranty periods on different aspects of the home. So, for example, on the electrical, they might have a five to seven-year builder warranty. The roof might be a 10-year warranty. The foundation might be 10 years. The plumbing systems might be 8 to 10 years. So, there are expanded warranties. It gives you peace of mind when you're buying a new build. Can't argue with that at all. Now, some of the downfalls. Unfortunately, the builder community is a little bit greedy. The lots are getting smaller and smaller, and even though the homes are staying roughly the same size, they're squeezing certain aspects. You want big living areas, which look very modern and are convenient for you. Where it suffers is the bedrooms. Bedrooms are smaller. Certainly outside of the master, your bedrooms are quite a bit smaller than maybe in an existing home. And your garages are smaller. You can fit two cars in it, but it's a squeeze, my friends. And suddenly that nice big backyard is gone. And of course, the neighborhood is strewn with homes in different phases of being built. Some homes have just a foundation, some have sticks going up. So, the neighborhood looks like a wreck at first, and there are no mature trees. That's a downside in my mind. But if you're doing all this for the purpose of living in a home for three or four years, then by all means. Hopefully this video has given you a reason to check out the new build. CHAPTER 6: NEGOTIATION STRATEGY (8:54) So, let's give you one more bit of strategy before I go. I really want to stress this last point again, and that is you have to be able to negotiate with a new build. When you go to their sales office without an agent with you, one of the first questions they're going to ask is, "Are you being represented by an agent?" And under all circumstances, always, always say, "Yes, I am." Even if you haven't signed anything with anybody, just say yes. And if they ask for a name, well, give them my name: Patrick Fagan, Patrick Kevin Fagan, or just make up a name. But say you are represented, because otherwise they're going to be licking their lips. They're going to be showing you all around, giving you all their wonderful deals, knowing that they're going to take advantage of you. You're going up against a major corporation, a deep-pocketed builder that knows how to negotiate and make you feel good about having a lesser position. The sales office people are representing the builder, not you. You've got to be represented. They're not going to show their full hand. I negotiated a deal, for example, in Austin, Texas. This wasn't a first-time home. This was the forever home, a $975,000 listed new build. We got that down to $925,000, we got the interest rate brought down, and we got about $25,000 of seller concessions. So, incredible. On a $300,000 house, which would be more in line with a first or second-time buyer, there's plenty of room to negotiate that they're not going to be telling you about. So, bring someone like myself who's savvy on board with you. Call me up, text me, and let me know if you're looking at a certain community, or I can help you find a community, because these deals are sometimes hard to find on an internet search. I have a particular website that I can show you new builds on. So, with all that in mind, remember webinar.themortgagepatriot.com. Join me on my webinar. We'll go over everything start to finish, and we'll talk about new builds as well. I'm Kevin Fagan, The Mortgage Patriot, on your side. Make it a great one. END OF TRANSCRIPT