The Top 5 Tips to Buying New Construction
By Jeff Cook | February 22nd, 2017
So you’ve decided that you want to buy a home. But the decision isn’t over yet! Will you be buying an established house or new construction? If you’re having trouble weighing the pros and cons, or even if you’ve decided to go the new construction route, hire an agent! Not only can they help steer you through one of the biggest moments of your life, as a buyer, an agent comes at no cost to you!
Now you’re probably wondering why you would even need an agent when you can just walk into the model home of a new development and sign on the dotted line. The on-site agent in the model home or new construction office is hired by the builder and may not always have your best interest in mind. The builder is financially responsible for the cost of the home until it sells and will be trying to unload it as quick as possible. Therefore the builder’s agent will be less inclined, or able, to negotiate as you would normally see in a purchase of an established home. However, that is where your own agent can come in handy discussing incentives if the builder is unable to decrease the purchase price.
If you get a little antsy about checking out new construction, and do so without your agent in tow, make sure you let the salesperson know you have already signed with a real estate agent. If not, you might get stuck in a dual agency situation, where the on-site agent will be representing both sides of the transaction, if you sign any paperwork that day. You may also want to do some research on the builders in the area before you head out to the sites. A buyer’s agent can find some of the builders’ older homes and show you how they’ve weathered over the years. Also, when you’re going through that model home, be attentive to what exactly is included in the floor plan you choose. The model home may have upgrades that aren’t normally included and priced for in the brochures.
When you buy an established home, you only have to put a small amount of earnest money down when you send in an offer. If that offer is accepted and you enter into a contract, if you change your mind about buying that home, you can lose that earnest money to the seller. When you decide to go the new construction route, most builders require a 10% deposit, which is almost as much as a normal down payment. If you cancel, there’s a big chance you might lose that entire deposit. Deposits for new construction are much larger than earnest money for established homes, therefore the decision is something that needs to be highly thought out.
Unlike an established home, there are so many options for you to pick out when building a new home. Flooring, paint, fixtures, upgrades, etc. Your first design appointment can be very overwhelming. Try to sit down with your family a few times before your appointment to make sure everyone is on the same page of what they want. Sign up for Pinterest where you can find a wide variety of home decor styles to look at and visualize. Check out kitchen displays at home improvement stores. Narrow down the look you want before you sit down at the design center.
The biggest misconception about new construction is that you can skip the home inspection before closing. Yes, a city building inspector combs through the house throughout different stages of the construction process to make sure the home is up to code and everything works correctly. But once the drywall is up, components of the HVAC, plumbing, and electrical systems aren’t seen again by the building inspector. Unlike a home inspector, a building inspector will not climb into attics and crawlspaces to make sure system are still intact. If they’re functioning during the final inspection, they are assumed good to go, although there may be a hidden issue that could cause problems after the property is sold. Play it safe and get a home inspection!
If you’re ready to tour some new construction homes and check out your options, give us a call today!
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