Guide To Buying New Construction

What makes buying new construction different from buying an existing house? A newly constructed home will likely include the most up-to-date design and latest construction standards, as well as new appliances. You may also have the chance to choose the color of the carpeting or upgrade tile since most new construction homes are sold before their completion. On the other hand, it is unlikely that you will be moving into a house with a long list of repairs and projects.

These are some tips that will help you choose and purchase new construction.

Find A New Home

How do you find a new or under-construction property? Good real estate agents will be aware of new developments in your local area. New construction doesn't always happen in a new community. Builders may choose to build a few homes per lot. Keep an eye out for potential new construction areas in your neighborhood. Ask your agent to get in touch with the developer or contractor.

Pros On Your Team

Many builders of large developments have their own sales team, which often bypasses traditional agents. Sometimes, they work with a real agent to manage their listings. You will need your own agent in either case.

Lenders are the same. Builders may require that you are pre-approved by their preferred lender. They want to make sure you're a serious buyer so that the deal doesn't fall through. You can use any lender that you like in most cases. However, if the development is not finished yet, it may be difficult to find another lender who will lend you the money.

Do Your Research On The Builder

If you want to find out who your money will be, go online and read reviews about builders. Are they known for delivering quality work? Are they more well-known for building shoddy homes that quickly crumble? Are they financially sound? It's not worth paying a deposit to have the builder go bankrupt before you get your home finished. Ask about the warranty that is included with your home.

Be Aware Of What You Are Buying

You may buy your new home before it is finished. How do you see it? A model home or two will be shown to you. You can get a sense of the layout and options for display finishes by touring models. Be careful! Model homes often have a mixture of standard and custom finishes. It's not a good idea to fall for a model's backsplash only to discover later that it is a costly add-on. Ask for a complete list of the standard and upgraded features as well as their prices. It is important to know what you are getting.

Are You Able To Negotiate

Builders don't feel emotionally attached to the homes that they build. They aren't interested in negotiating prices because it's their business. One, they will cut the price for you. Then, the next buyer will expect the same discount. They must also prove to their lender that they are getting the homes they want.

What can you negotiate? All other things.

You will also find that many big developments are in stages. Sometimes buyers who act quickly to get into the first available homes often get a better deal. Why? The builder wants to increase interest in the development and start cash flow to finish the next phase. Builders can increase the price of each phase if the housing market is strong. You don't have to buy late to get a bargain. It's possible to negotiate sweet upgrades with a builder who wants the development to be completed and moved on to the next.

Jumping in too early can be risky. You could lose your down payment if the developer doesn't sell the remaining development and runs out of funds to finish your home. You might find that your neighbors move in a few months later, paying significantly less than you paid. There is always a chance that you might be disappointed by the outcome of your purchase, regardless of what type of home it was.

Contracts and Deposits

You may find that your new home is still under construction at the time you sign the contract. Therefore, a deposit will be required, ranging from a few thousand dollars up to 10% of the home's cost. Make sure that your agent clearly explains the contract. Your agent will be able to tell you if and when your deposit can be refunded. Although the contract should specify a completion date, many builders allow flexibility in case permits or materials cause delays.

Who Pays For Delays?

The contract should outline your rights if your home is not ready in time. Make sure you get everything in writing. Do not assume that just because you spoke to the builder, that it is good enough. Even the most honest builder will forget some things. It's much easier to forget details if they are written down in a contract. Ask your agent for assistance.

Warranty Inspections

You don't have to skip inspection just because your house is new. You can get an independent and trained eye to make sure everything is in order. You can work with the builder before closing to fix any problems. Your rights should be explained to you by your agent. While most builders will correct any code violations, you cannot simply walk away from an inspection result.

Manufacturer warranties are not only for appliances. New homes often include a builder warranty. This is usually through a third-party warranty company. The agent will be able to explain the terms and length of the warranty. Before signing your contract, you should ensure that you fully understand all details.