Are You Thinking About Building Or Buying New Construction?
Are you thinking of building a new home or buying a new construction home? Building a home has many unique differences to buying an existing home. It is extremely important to have your own agent to represent your best interests. The builder’s representative represents the builder. It does not cost you anymore to have your own representation. As your agent, we are paid for by the builder and that cost is already built into the cost of the home.
We have over 20 years experience and have the personal and professional experience you need when stepping into the world of new construction. Contact Leah and Nate today to see how we can help make your dream a reality.
See our Top 7 Tips for building or buying new construction.
Hire Your Own Agent at the Start of Your Hunt
It is crucial to have your own representation. Remember that the builders representative represents the builder NOT the buyer. Many builders will not allow you to hire your own agent if you wander into the new homes sales office without representation. Let your agent introduce you to the builder, and you’re generally covered. The builder’s sales agents are paid to represent the builder, regardless of what they may tell you. Many will use high pressure tactics to persuade you to sign the contract. Your agent will be paid by the seller. Your own agent will represent you and is required to disclose the positives as well as the negatives about the transaction. Builder’s agents don’t discuss drawbacks. The biggest MYTH is that you will save money using the builders agent, however this is simply not true.
Find out what finishes are standard and what is an upgrade.
The fit and finish of the model home doesn’t necessarily represent what comes standard. Often the model home reflects a mix of standard materials and fixtures, as well as a handful of upgrades. Therefore, you need to find out from the builder which options are standard, which options are upgrades, and what each upgrade costs. Keep in mind that costs can change. The price quoted at the start may not be the same when you decide to move forward. One way to cut costs: Move into the home without an upgrade, then hire a contractor to do the work. Builders charge a huge markup on certain finishes and products.
Be creative during negotiations.
Builders don’t like to drop their prices. Instead, consider asking for the builder to pay closing costs or perform upgrades at no additional charge. Builders are often reluctant to set a precedent for negotiating prices since future buyers in the development may expect similar discounts. Consequently, builders are often more likely to negotiate “on the back end” since closing costs and upgrades are a less obvious way for them to sweeten a deal.
Get a guarantee.
You’re often buying a home that is not completed. What guarantees do you have the home will be ready on time? Your purchase agreement documents should specify a completion date. However, many builders add provisions that make the completion date dependent on permit approvals from the municipality or availability of building materials from suppliers. There can also be additional charges if you’re unable to close on time if your lender isn’t ready.
Find out what warranties are provided.
Most builders offer a one-year workmanship warranty and a 10-year structural warranty. Make sure the warranties you receive explicitly state what is and isn’t covered, and what the limitations are for damages. You should also receive manufacturer’s warranties on the washer and dryer, hot water heater, air conditioner, kitchen appliances, and roof.
Get the home inspected.
New homes have problems too. Hire an inspector to make sure everything is safe and up to code. Even though most municipalities require new homes to pass permit inspections, an independent verification with a qualified inspector is money well spent. In many cases, the builder will allow buyers to conduct an independent inspection and agree to repair code compliance issues but do not include a provision that would allow the buyer to walk away and retain their deposit if they are not satisfied with the result of the inspection.
Look to the future.
Check with the city to see what is planned for the surrounding area. If you have a view, will it still be there in five years? Most builders put the responsibility on the buyer to be aware of neighborhood or community dynamics related to other development in the area like traffic planning, the development of neighboring parcels, etc. Many new communities also have homeowners associations that can impact your potential new home as well.