Buying a new construction home is nothing at all like buying a resale property. In fact, the process is replete with intricate details and potential pitfalls. Even if you’re making an offer on a recently completed structure, the process is tricky. These are but a few reasons why your best interests are represented by an agent who knows new construction from the inside out.
WHEN BUYING A NEWLY-CONSTRUCTED HOME, YOU SHOULD. . . .
Scrutinize the builder
Ask for references. Knock on the doors of potential new neighbors. How do they rate their building experience? How does the builder interact with his buyers? It’s essential to know what trends and specifics you should be aware of during the building process.
When you decide to build a home, plan ahead. Work out as many details as possible before signing a contract. Doing this in advance will accelerate construction and save you money.
How to spend
Choose square footage and location over upgrades. When you eventually sell the property, you will not get the value of such upgrades as countertops and tile, among others.
Get it in writing
Regardless of how modest, get every promise in writing. It’s not unusual for builders to forget what they promised you, especially when they’re building other homes at the same time.
Just because you noticed a feature or standard in a model home–or another by the same builder–doesn’t mean it is usual or even being offered anymore. Builders frequently change their standard elements without notice.
Include as much information as possible in your original contract. Be as detailed as you can, and include pictures. It’s best to make all your selections before breaking ground on the home.
Hire an inspector
Hire a professional inspector. Newly-built homes have flaws too. It’s not uncommon for an inspection report on a new home to be much longer than one on a resale.
Visit the worksite
Visit worksite frequently. Some builders do not allow such visits during construction, but when yours does, visit anytime you want. Your goal is to catch potential issues now that could cost you in the future.
did you know. . . .
You cannot sue the builder. Most have clauses in contracts that prevent lawsuits by dissatisfied buyers.
You pay all the closing costs on a new home. When builders agree to pay closing costs, they often fold these expenses into the purchase price of the house. Additionally, when builder’s lender offers special credits, these costs are often rolled into your loan.
Warranties are not created equally. Every builder offers a different home warranty–and most don’t cover appliances. Make sure your home warranty is included in the sales contract.
When completed, your home will not be perfect. You’re sure to find some digs and scrapes in the house and property. Most builders use what they call the “6-foot rule”–if you can’t see a ding, scrape, or mark from 6 feet away, they won’t correct it. Your response is to get the best home built that you can.
Forget the room dimensions. Most builders view room dimensions as the threat that they may be inaccurate after construction is completed.
Some builders refuse to include garage remotes and other common-sense items. This scheme is precisely the reason to keep asking questions and never assume anything.
Working for the builder
Remember: The agent on the new construction sign works for the builder, not you. It costs you no more for an agent to represent your best interests, not those of the builder.
Don't go on your own
DO NOT visit a new-construction neighborhood without your agent. Many builders will not pay your agent’s commission if you are not onsite in person. This concept does not reduce the price of the home–it’s lose-lose for all but the builder’s agent.
Most builders make you pay for any changes you make during the building process–even those that save them money. In fact, many builders will not give you credit for items you remove!
Rarely are new homes completed on time. Almost always, closings are delayed.
You must pay for the house, even if it does not appraise.
No Due Diligence
There is no due diligence. When you purchase a newly- constructed home, you do not receive a period of due diligence. Which means? Once you sign the contract, you must buy the house.
No Financing Contingencies. Many builders will not build a home if you have any contingencies. This arrangement means that if you’re unable to obtain a loan to finance the house, you lose any down payment you made.
So? It’s crucial to be represented by the savvy of an accomplished new-construction real estate agent. If you’re thinking about building a new home, contact us at your convenience.