Buying a new home isn’t the same as buying an existing home. The more you know going in, the more prepared you’ll be to roll with the process – or run from the process.
Everything all bright, shiny, and new
No one else’s taste, no one else’s floorplan, no one else’s germs. When you buy a brand – new home, it’s built for you and hasn’t been lived in by anyone but you.
Decisions, decision, decisions
There are those who love the idea of selecting the flooring, the cabinets, the kitchen countertops, the finishes, and the myriad other choices that need to be made when building a new home – and then there are those who get the shakes just thinking about it. If you’re the latter, perhaps an already – built home is a better option for you.
What you see is not what you get
Model homes are typically decked out with beautiful upgrades and multiple options, and those upgrades and options can cost big bucks. If you want your home to look like the model, be prepared to shell out far more money than what the base price of the house indicates.
You’ll have a warranty
“Warranties for newly built homes generally offer limited coverage on workmanship and materials relating to various components of the home, such as windows, heating, ventilation and air conditioning (HVAC), plumbing, and electrical systems for specific periods. Warranties also typically define how repairs will be made,” according to the Federal Trade Commission’s Consumer Protection site.
The duration of coverage varies depending on the component of the house. Coverage is provided for workmanship and materials on most components during the first year. For example, most warranties on new construction cover siding and stucco, doors and trim, and drywall and paint during the first year. Coverage for HVAC, plumbing, and electrical systems is generally two years. Some builders provide coverage for up to 10 years for ‘major structural defects,’ sometimes defined as problems that make a home unsafe and put the owner in danger. For example, a roof that could collapse is a ‘major structural defect.’
Home warranties are typically extendable after that first year, although you’ll be responsible for the cost.
You may have to buy sight unseen
In some cases, model homes may not be built – or only a few of the floorplans will be featured as models – and you won’t have an opportunity to walk through the homes to get a feel for how they live. You should have pictures and floorplans to view, and maybe even a virtual tour, but if you’re the type that needs to be in it to get it, you may be disappointed.
The noise – and the dust
When considering which home to buy, the location of the lot is obviously important. But have you asked about how construction is going to roll out in the neighborhoods? It could be that your home is on a street that serves as a main artery for trucks and other construction traffic. Or perhaps you’re in a location where construction is going to be going on all around you for months. Yes, the noise and dust will disappear – eventually. But how long are you willing to wait?
Don’t expect a price reduction
You may be used to negotiating on the price of an existing home for sale, but new home prices aren’t typically negotiable. The builder or developer may be willing to throw in some upgrades as part of the negotiation, but, the hotter the community, the less likely you are to get anything for free.
You can still work with your real estate agent
Working with an agent who is savvy in new construction will help get you the home you want and any available extras. Keep in mind that many new – home communities today offer real estate agents a commission for bringing in a buyer, but they insist that the real estate agent register their buyer on the first visit. So don’t show up alone to tour the community for the first time! You could cost your agent money and then have to navigate the purchase on your own.
It might behoove you to work with their in – house lender
If you’re already working with a lender, you obviously don’t want to be disloyal. But, there may be financial benefits to working with the builder/developer’s in – house lender. Many times, they offer a lower rate overall, will buy down your rate, or will offer you a “teaser” rate that keeps your payments lower for the first year or first few years.
Get familiar with this term: Standing inventory
If builders have pre – built homes that are waiting to be sold, this is the one place you may have wiggle room room on price. Another advantage of standing inventory is there is no construction wait, and these homes are often nicely amenitized with upgrades.
You might not be able to buy the lot you want
New homes are typically released in phases, and it might be that the lot you have your eye on gets snapped up by someone who was prequalified before you, or higher up on a waiting list if it’s a really popular community. Or, perhaps you want a homesite that isn’t set for release until later when you’re ready to purchase now. Flexibility is the key to being able to get what you want.
Amenities might not be available or built right away
If a community’s amenities are a draw for you, be sure to ask about when they will be built. It could be that the pool and community park you’re so excited about are years out from being realized.