You may assume that buying a brand new home is a way to avoid the problems sometimes found in a previously owned home – but that’s not always the case. Builders can cut corners and create issues anyway. Add in that construction of any kind can both take longer and cost more than expected. Negotiating when buying the home from the persons building it rather than someone who has owned it is very different. So how do you navigate this perhaps less familiar territory and still end up very happy with your new construction home? AHRN.com has got your back with the key elements to cover!
From the beginning, purchasing a brand new home is an entirely difference experience. Finding a realtor who specializes in new construction means you have a guide through the incredible array of options and decisions. You’re likely to meet the building company’s real estate agent when you first inquire into model homes. They will be so friendly and excited you might be tempted to utilize their services. Resist that impulse and get yourself an agent who will serve your interests alone, collecting info on your behalf, advising and representing you.
Beware the Model!
When touring model homes, remember they are of course presented with all the bells and whistles so you will fall in love with it. Yours would likely have to be upgraded to be like that — and it can be costly. Also, the features you see in it might be a mix of styles they don’t normally package together. Finishers like appliances, landscaping, deck/patios, etc may not come with the completed house, so figure those into the purchase price. Have your agent procure an itemized list of common features and upgrades and their costs. Bottom line – you will need to be clear as well as make clear exactly what you’ll be getting and what it will cost. Prices can change between the time you ask and the time you sign, so check the numbers again before you finally lock in a contract. If you can’t agree on what you want, be prepared to walk away and keep looking for a home that includes what you need. If you absolutely must have an upgrade that’s pricey, find out how much it would cost to have an outside contractor purchase and install it after the close of escrow. You might be able to save quite a bit of money!
Working With Your Builder
Do research on any potential builder. Look for reviews, ask your realtor about them, Google for whatever you can find. As with anything, some reviews are great, some not, but focus instead on the overall picture you’re gathering. If you have any concerns, be sure to have that addressed in writing. When buying a home that is not yet complete, you must spell out how the home will be finished, what will happen if construction is not completed on time and the deadlines for decisions that will occur through the process. Get every step in writing and signed by all parties involved.
When you negotiate, it’s not so much a bidding banter as bartering. The builder may not shift their price as an owner would – but you can ask for certain upgrades to be included and/or to have them cover some of the closing costs. Again, an agent who knows this kind of sale is going to be invaluable during this part of the process. Ask your agent to get the builder’s warranty info early on in the process and read it very carefully. Incorporate any concerns you have in your offer documents to get those addressed from the get go. And it’s smart to check into getting extra on your own to cover what you builder’s does not.
Some builders require that you get pre-approved by the lender they work with, so they can feel assured… It can be a good deal for you, but you will only know that if you also shop for your own lenders and compare. Definitely ask your agent to help you find out what promotions or deals you may get if you do use the builder’s lender.
Get it all in writing
Delays can be expensive and frustrating for you – possibly including hotel costs, storage costs, etc. Your builder or contractors can say that permits or suppliers are holding them up – and that may be. Spell out in the contract what will happen if there are delays as specifically as possible. Definitely have your own, independent inspection with someone who does not have a relationship with the builder. And do that before the home in completed which actually can make it easier to see problems in process – a good thing because your homeowners insurance may not cover it. Have an inspection done in two parts: before construction is completed, so things can be caught and done properly, and after. This also helps to keep the specifics of both the features and schedule agreed upon in your contract on track.
If new construction is what you seek, there are unknowns going in. You are going to need to educate yourself. Besides the above, the entire housing development may not yet be built or be in the midst of construction. You may have no idea of who your neighbors will be, the flavor of the area and how it will grow, how traffic may increase, what views you might lose. So do your research, find the sharpest and most knowledgeable agent you can, be careful and methodical in your choices and negotiations, and get it all in writing. Make last checks on prices and details before you sign, protect yourself with mid as well as post-construction inspections, and get the proper warranty coverage. Before you know it, you will be an expert and be able to help friends or family who are considering the same thing! And that might get you invited over to their new home for a BBQ!
Meet Your Contributor:
Rochelle Joseph is a Writer and Image Consultant who has had experience marketing, renting and buying/selling her properties for over 20 years. She has written and edited for several publications, including the Boston Book Review,The Emerson Review, ZooBorns.com, WildLife Magazine, the Houston Zoo, The Wildlife Center of Texas, One Spirit Interfaith Seminary as well as AHRN.com. She currently writes at her great gifts blog at http://lookyhereu.blogspot.com and her animal blog at http://naturegirrrl.blogspot.com.