Top 10 Tips for Buying New Construction
Purchasing new home construction requires a more thoughtful approach than typically associated with buying an already-established dwelling. This is because there are many diverse factors a buyer must take into account to ensure they are fully satisfied with the acquisition. Everything from the area where a property is located to selecting an experienced agent should be considered before making any lasting decisions.
A bit of planning and forethought will help virtually all buyers obtain the property of their dreams. Employing the following tips can lead buyers on the road to their new home, while also assuring they receive the best possible value for their money.
- Prior Research Is Crucial
Getting a read on your builder’s reputation is a must, which requires doing a bit of research. Online reviews are ideal in this case, because they can allow you to identify trends in your builder’s previous working relationships. Also, be sure to ask your agent if they are aware of any concerns. Agents may be privy to certain information due to their industry connections.
If you should uncover any troubling developments within your builder’s past, be sure they are addressed in writing. This will make certain you remain covered should your builder fail to deliver as expected.
- Initiate a Thorough Home Inspection
While permit inspections are required when building new homes, buyers should also insist on having an independent inspector look at the property. This process can serve as reassurance that the home is truly up to code, while also giving the buyer a bit of leverage if issues are found.
Additionally, agents should include a section in the purchase agreement that explains code issues must be repaired or the agreement will be terminated. In most cases, purchase agreements derived from builders will provide no such language.
- Read Up On the Area Surrounding Your Home
Though the overall state of your new home is certainly important, the area surrounding it is equally so. In the event that you someday plan on selling your home, the neighborhood where you live can play a large role in the selling price.
A comprehensive investigation of the neighborhood is typically the responsibility of the buyer. To further assuage concerns, buyers can even request a review period in writing to help determine whether new home construction makes sense in a given area.
- Look for an Experienced Agent
Finding an agent well-versed in new construction sales is essential to navigating the process with ease. The right agent will take many complex factors into consideration when negotiating a sale, most of which are not present when buying an already completed home. It’s also highly recommended that buyers choose an agent that is in no way associated with the builder. This can cause a conflict down the line, especially when an agent prioritizes the best interests of a builder over your own.
A good agent can be extremely helpful in many areas. For instance, one must consider a home’s potential resale value, which can be directly influenced by a builder’s choices during initial construction. An agent can also help sort out other important details, such as determining site registration policies for a given development. In most cases, it’s a good idea to have an agent accompany you when visiting a prospective property to afford deeper insight into the construction.
- Take a Creative Approach to Negotiations
Negotiating with builders can be quite difficult, particularly for those new to the task. That’s why it’s important to employ a creative approach to the negotiation process. This includes researching a builder’s negotiation style in previous transactions to establish the best possible method for getting what you need out of a contract.
Most builders are reluctant to decrease prices because this can affect future dealings. If a builder affords one buyer a special deal or discount, subsequent buyers may expect the same. Despite this, many builders are willing to include things like upgrades or closing costs without expecting an added charge. This can ensure all parties are happy with the established deal.
- Shop Around to Secure the Best Lender
Selecting a lender can be difficult for many reasons, but it is extremely important to make a thoughtful decision to achieve the best results. While many builders have a preferred lender, buyers should not automatically accept this loan option before comparing it to other lending companies.
However, buyers must be aware that the preferred lender may be their only recourse in some cases. In addition, a buyer may be required to be pre-approved by the preferred lender, as well as the lender they’ve selected. This serves to reassure the builder, which is important for forging a strong working relationship.
- Don’t Sign Until Contracts Are Complete
While some buyers may believe that verbal agreements are sufficient for unfinished construction, this is far from true. When it comes to works in progress, all remaining construction must be dutifully spelled out in writing before a buyer signs. Buyers should also include amendments related to missed deadlines, which can often result in exorbitant fees for all involved.
In those instances where a builder utilizes a customized purchase agreement, it’s helpful to receive those documents before getting into the specifics of your potential purchase. This provides buyers and agents a chance to review forms, which can greatly benefit the negotiating process.
- Receive Warranty Information As Soon As Possible
Knowing your warranty inside and out is an essential part of protecting your new investment. This is especially true in cases where builders use third-party warranty companies, who may arbitrarily decide what should and should not be covered.
The best method of fully understanding your warranty is receiving it as soon as possible. This will allow you and your agent to evaluate it thoroughly, which will then help determine what issues need to be addressed.
- Be Aware of Exactly What You Are Getting
Model home tours are often used to give a buyer an idea of the finished product, but even these may not showcase all the standard features included in your completed home. In this case, it’s important to fully understand the difference between what are considered standard features as opposed to the upgrades which can be included to entice possible buyers. This will ensure you receive an accurate perspective on what you’re actually getting, as well as the final cost.
In some instances, a builder will provide a list of such features and their price tag, as well as the cost of upgrades. Additionally, buyers should remember that these costs can fluctuate from the initial quote to completed construction.
- Include Guarantees in Agreement
In most instances, buying new home construction means that property will not be completed by the time contracts are signed. This can be a source of great stress for buyers, as there is no definitive way to tell if your home will be finished by the allotted deadline.
That’s why all agreements should include a guarantee regarding the established completion date. Doing so will make certain that you are protected if a builder fails to finish your home on time. Contract portions relating to completion date should also reference other events, including what will occur if a lender is unprepared to close in the agreed upon time period.
A Worthy Investment in Your future
New home construction allows buyers the ability to determine exactly what their future homes will look and feel like. Accordingly, the above tips can help ensure that buyers are completely satisfied with the finished product, as well as guaranteeing that the investment in their future remains sound.