Buying a newly built home provides some exciting options that may not be available to you when purchasing an existing home. But it also creates some additional challenges, including making sure your builder is reputable, the community is the right fit for your family and that your home will be ready when you are.
In this guide, I will touch on some of the most important factors to consider when buying your new home. I know you are busy so let’s get started with the first thing you must know.
Use a Real Estate Agent.
Understand that the sales reps you meet at a new construction community are likely really representatives of the Seller – the Builder, corporate owners, developers, whomever. At the end of the day, they are paid to represent THEIR clients’ interest, not yours. You should always have an expert in your corner who has YOUR sole interest in mind. Since the seller usually pays the commission, it costs a buyer nothing to represented by a real estate agent.
A good agent is well versed in the hyperlocal market and can help advise you from cell phone reception to the quality of schools. The right agent will be a resource for financing, which improvements will be the most effective as well as how the entire process works.
It is essential that your Realtor accompanies you on your first visit to the New Construction Community. Often the policies at a community require that your agent be present at the first showing and then at every showing. If they’re not, you may find yourself working with the site rep even if you didn’t intend to do so. And your agent, who comes along later, may not be able to represent you. Bottom line, talk to an agent BEFORE going to tour new construction sites.
Know the Community
Start with studying the new construction community carefully. This can be a very intensive part of your preparation. Some things that you would want to look at are commute times, home value trends, schools, crime and recreational facilities, to name a few. This is where an expert will save you many hours and provide you with accurate information.
Check Out the Builder.
Most new construction builders have been in the business for years and produce a quality product. However, there are a few that do not. New construction quality can even vary from site to site within the same city. Check review sites, state licensing boards and local court records to see whether the builder you’re considering has run into any trouble to include lawsuits, complaints with licensing agencies and disciplinary actions by state and local agencies
Choose Square Footage and Location Over Upgrades.
Plan how you want to spend your limited budget. You can never change your home’s location, but you can upgrade flooring later. Apply that logic to other choices as well. If you’re choosing between a fourth bedroom and granite countertops, you probably should choose the extra bedroom, which is much more expensive to add later. In that first new construction house that you buy, get as much as you can, but don’t do the upgrades. Select the locale to include where your lot is. Pay special attention to the positioning of the sun, especially here in Las Vegas. You will thank me in July on this one!
Don’t Over Improve.
Choose a new construction home size and options comparable to those of your neighbors. Keep up with the Joneses but not get too far ahead of them. You don’t want to price yourself out of the neighborhood with things that no one else has. Don’t be the only house in your neighborhood with a pool. You will never get your money back when you go to sell.
Understand the Floorplan.
Most new construction floor plans include room sizes, and if you don’t understand those, take a measuring tape to your current home. Many builders offer the home with the floor plan you want as a model, even if it’s still under construction or in a different community. You really should physically walk the floorplan to get a feel for it.
Vet the Contracts.
Contracts for new construction are complex. In almost every case, new construction homes require the use of a Builder’s contract or at least a lengthy addendum in addition to the typical purchase forms used by your Realtor. Generally, those Builder forms include language specific to the terms of the building process and can be many pages long full of tightly packed terms. While much of the language is common sense, be sure to read the contract thoroughly yourself (as will your Agent) and then consult with a qualified real estate attorney if you have questions or concerns. Agents, even those sales reps for the Seller, aren’t allowed to (and shouldn’t) attempt to advise you or interpret what those custom forms really say.
Ask About Warranties.
Most new construction builders offer warranties on materials and workmanship. Pulte in Inspirada, for example, offers a one-year warranty on workmanship, a two-year warranty on mechanical and electrical elements, five years on water leaks and 10 years on structure. Make sure you understand what is and isn’t covered and what process you need to follow to get something fixed.
Get a Home Inspection.
This can be a tricky matter, depending on the builder. For insurance reasons, most new construction builders will not allow an independent home inspector to complete a full inspection. If the home inspector falls off the roof or gets hurt, the builder could get sued. Get a home inspection within the first year of occupancy. I would suggest near the end of your one-year warranty (see #8.) This way you can give the builder a punch list of items to fix under warranty.
Get Multiple Bids from Lenders for Your New Construction.
Your new construction builder may have a preferred lender and you may be offered discounts along with other incentives to use those professionals. They may or may not be your best choice. Often, those incentives are wrapped into the mortgage disguised as hidden fees. I have never seen any lender give their best quote on the initial offer. Get 2 additional quotes from other lenders. Be transparent and let all three agents see what you have been offered. The lenders WILL come back with better offers and then decide which is the best option for you.
Move-in day on your new construction home is the sweetest day on earth. Well, of course, it is for every Buyer for every home … but there’s just nothing like the unparalleled excitement that seems to surround moving into a brand-new home in which you made all your own choices. On the day before the furniture arrives, buy a roll or two of that tacky carpet protector stuff or paper to cover the walking paths on the rugs and floors so that you and the movers don’t track the great outdoors into your new home.
… And then take a moment for a big smile! Take a few minutes to sit on the floor, on the deck, on the sofa in the middle of the room (because you can’t figure out where to exactly position it) and reflect on what you’ve accomplished. This was a BIG deal!
Looking for new construction in the greater Henderson or Las Vegas area? Give me a call. I specialize in representing Buyers of New Construction. I have helped many homebuyers with the new construction process and would love to offer my experience and expertise as a resource for your new adventure! Call TODAY and let’s have a no obligation chat about what you want to accomplish.
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