OPTING FOR NEW HOME CONSTRUCTION

Buying an existing home or having one built is yet another decision to make during the home-buying process. If you decide to go with new construction, a real estate agent can be a powerful advocate in your corner as you negotiate upgrades, a move-in date and other terms with the home builder.

Below are some basic pointers to prepare you for the journey ahead:

Selecting a builder

Shopping for a large production or custom home builder can be a daunting task. Start by defining what architectural styles appeal to you and then seek out the builders in your area who offer those styles. Due diligence is essential. Ask friends for referrals to get firsthand accounts; verify the builder’s state license status, if applicable; and check whether they’re certified by the National Association of Home Builders.

The builder representative and your real estate agent

A builder representative’s ultimate goal is to sell you a home. His or her role is to provide a wide range of information to help you to make your decision. Their representative informs you about; building restrictions, roads and easements, inspections, warranties, rebates and upgrades. A real estate agent knowledgeable in new-home construction will be able to help you wade through all the data and point out the downsides and upsides of each line through all the data and point out the downsides and upsides of each line item. Your agent also can look out for your interests in reviewing the builder’s contract, which often contains more legal jargon than consumer-friendly language.

It’s all about timing

Market conditions greatly dictate a builder’s incentive to offer a deal. When a builder has inventory on his hands, his carrying costs start adding up. When this happens, a builder might be more amenable to strike a favorable deal; whether it’s throwing in upgrades or taking a bit off the asking price. A real estate agent can help you know when market conditions are right for these benefits. Also, watch for builder close-out sales. Builders promote these special events when a new subdivision is near completion but empty inventory still remains.

A word about paying up

While there are always exceptions, most builders require a hefty deposit when a purchase agreement is signed. They also require that the buyer pay for any upgrades prior to closing. If you back out prior to closing, unless the agreement states otherwise, you will lost that money. Make sure that you understand every detail in the builder’s contract before signing it. 

Logistics and Inspections

Recently we have seen many home builds delayed. Builders are subject to the logistics of receiving building materials and furnishings in a timely manner. Delays can be expected and, per contract builders are not responsible for any of these delays.

You should hire a third party inspector (your Realtor® can recommend one) to review the home both before drywall and at final stage. Since builders are realizing delays, some cut corners to assure delivery times. You want to be sure that your home is truly well constructed and move-in ready.