19 tips for buying a newly constructed home
Like many people who are looking to buy their own home, you probably have a vision of what your ideal home would look like and what it would include. This includes things like the size of the house, the colors of the walls and floors, the way the bedrooms are set up, what the living room area will look like, and cooking in a spacious, gourmet chef’s kitchen.
If you’re scrolling through Zillow hoping to find what you’re looking for, you may be wasting your time. Buying a newly constructed home will allow the new owner to have more control over what the interior will look like, giving it their own personal touch. They will get to choose their own style of countertops, cabinets, flooring, and much more. Remember, if you are looking for new Fremont homes, you are welcome to check out our link.
Today’s home plans have flexibility built-in so that buyers can choose a home that works best for them and their families, and a community that will suit their needs. Below are 19 helpful tips to consider when you are going to buy a newly constructed home:
1. Prequalify with the builder’s preferred lender
Most of the time, this step is necessary because a builder’s preferred lender will assure a streamlined closing process. The preferred lender is there because they have a good relationship with the builder, and they will make sure to have the closing process finished on time. Builders are extremely cautious when using unfamiliar lenders. The reason for this is that if the buyers are not able to obtain financing by the final construction date, the builders will have to put the house on the market and will lose money by continuing to pay interest on construction loans.
2. Educate yourself on the whole process
The new home constuction process can be overwhelming. Ongoing delays and new challenges will always arise. It’s good to have a solid understanding of the entire process, the home building lingo, and the unexpected costs that might come with buying a newly constructed home.
3. Find an agent who specializes in newly constructed home sales
Research agents until you find the one who you know is right for you. A realtor who specializes in new construction will know the right questions to ask and will represent you during this process. Your agent will help you get the most value for your money, negotiate with the builder, and handle other things like overseeing home inspections. Agents know the ins-and-outs of the industry and can give more instructions on the right direction to take.
4. Understand the contract
A new home sale contract will show the projected closing date, the terms of the contract, who pays which expenses, and the obligations of both parties. As a buyer, you need to know exactly what these obligations are.
You will also need the know what the contingencies and repercussions will be if you or the builder do not meet those obligations. Once the contract is signed, it can be very difficult to change. This is why you and your agent will need to read through the entire contract thoroughly and carefully so that you both understand everything.
5. Research the builders
Regardless of the area you’re looking to build in, you should research every builder that offers new construction. Review their social media outlets, recently built homes and neighborhoods, and talk with several of their past buyers if possible.
Read all of the reviews you can find, see if there were problems and how they were handled. All reputable builders will have a website with an ‘About Me’ section that states their credentials, how long they’ve been in service and other essential materials you’ll need to know.
6. Find out what your new community’s plans are for the future
Before choosing a spot for your newly constructed home with a beautiful view, for example, consider that that view may not be there next year. You do not want to pay a premium for a house with a view in a new development when some new trees that were planted grow tall in the next few years and block the view.
If you are choosing a community because of its quiet setting, as in the case of retirement or those without families, find out if it will still be peaceful in five years. Do the research to see if the community plans on rezoning the area. If your new home is scheduled for a rezone, you could be looking at a new school system in the future. That would mean more noise and more traffic. Ask your agent to investigate if you don’t have the time to do it yourself.
7. Is there an HOA? If so, what are their rules and regulations?
Knowing if your community has a Homeowner’s Association or not can make your new life a lot easier, or harder depending on the rules and regulations they have in place. If you neglect those rules and regulations, large fees and possible lawsuits are possible. On the other hand, there are great advantages like maintenance services, parks and community pools, and the high standards for appearances will keep properties from declining in value.
8. Shop for lenders
From the beginning, if you went through the pre-approval process, then you have probably found a lender you’re interested in. However, some builders will require you to be pre-approved by their preferred lenders. Ask your agent for advice on offers and promotions. It never hurts to shop around and find different rates. For new home buyers, you will have more time to shop around. There is usually a 3 - 6 month window, as compared to resale homes that have 30 days.
9. Learn what the standards are and what upgrades are
Some builders advertise low home prices, but everything you want in your new home is considered an upgrade, which would result in thousands of extra dollars flying out of your pocket. Features such as granite countertops, tile, cabinets, light fixtures, even room layouts can be regarded as an upgrade.
Kitchen upgrades that should not be overlooked include quiet dishwashers, microwave drawers and under-counter lights. Cabinets also deserve extra attention in terms of details, such as divided drawers and extra storage. Energy saving upgrades such as tankless water heaters, plumbing, and air conditioning units with high-efficiency ratings can make a huge difference in your power bill every month.
10. Ask about incentives
Builders are always offering incentives like paying closing costs or upgrading packages for no additional cost. This is a skill that your real estate agent will excel at. One of their main jobs is to negotiate with the builder to get you the very best deal possible. When purchasing a newly constructed home, you will see builders advertise not only upgrade incentives, but luxury freebies and enticements as well. This can include free vacations, free cars, free entertainment centers, etc.
If a builder is offering these amazing incentives, have your agent negotiate those items for profitable incentives that truly benefit you. Examples of these are prepaid property taxes, prepaid associate dues, interest rate buy downs, or prepaid closing costs.
11. Realize that your new floor plan is not final
The floor plan outline that you see will not be the exact duplicate of your home. The measurements will probably be off and there may be some added modifications that need to be made.
12. Get the home inspected
Receiving periodic inspections throughout the construction process will guarantee that your new home is in tip-top shape. Even newly constructed homes have their problems. An inspector will make sure that everything is safe. Know your rights in case any code violations occur or any part of the inspection goes wrong.
New homes are designed to concentrate rain water from several roof surfaces to a small area, which increases the chances of water problems near the foundation and basement. Another common problem with new homes is improper deck and stair installation. Often, the wrong size nails are used, causing openings and premature deterioration.
There are several small mistakes that can be made inside and out of a newly constructed house. Having a home inspected periodically will ensure that your home is safe to move into and there are no unexpected problems.
13. Learn what your warranty covers
Every builder’s warranty is different. Most warranties on new construction will cover siding, doors and trim, drywall, and paint during the first year. Coverage for HVAC, plumbing and electrical systems are usually for two years. Some builders provide coverage for up to 10 years for major structural defects that might put the homeowner in danger.
14. Include your agent in all conversations
Your agent needs to know every thought, concern, and question you have. Any conversations you have about your home with the builder, lender, or anyone else should include your agent, since he/she is the expert advocating for you.
15. Don’t expect a perfect house when it’s complete
In our minds, we expect a gorgeous, perfect home after all the effort and details that were put into this piece of art. In the end, there will be details that you notice aren’t quite ideal. Maybe it’s a board that is not perfectly straight, trim that doesn’t match, or possibly knot holes in the wood framing. Bring it to the attention of your realtor, but if the house already passed inspection, then nothing will likely be done about it.
16. Do a walkthrough and take lots of pictures
A great part of the experience of buying a new home is that you get to see it built from the ground up. During the construction, most of the builders will allow you to tour your home whenever you make such a request.
Every chance that you get to see your home or the site, take a camera and take pictures of everything. Not only will you be able to document the construction of your home, but you can see exactly what is under your home and behind the walls. If any questions or problems arise in the future, you will have proper documentation to back you up.
17. Ask for the leftover materials
Accidents will happen, even in brand new homes. Having the materials available for exact matching countertops, carpet and hardwood flooring will be more than helpful when you need replacements. Most builders will supply a box of touch-up paint, but if they don’t offer it, be sure to ask!
18. Beef up your insurance
Your new home will be your largest investment and you want to take extra precautions to protect that investment. Carefully review your homeowner’s insurance policy and make sure there are no gaps, like lack of flood and fire protection. If you’re not sure what you should be looking for, or want a second set of eyes, hire a professional. This is not something you want to skimp on.
There are simple policies, known as builder’s risk insurance, that will insure the progress on your home. If a fire strikes or the home is destroyed by weather, the insurance allows you to recover the cost to rebuild up to the point where the home was damaged. You can also look into getting liability insurance.
19. Protect the walls and floors on move-in day
The day everyone has been waiting for…move-in day! Before the movers arrive, roll plastic or carpet protectors on the floors to cover the walking paths. The last thing you want your new home to have is carpet stains from dirty shoes. If possible, line the walls with plastic as well to protect them from possible bumps and scratches after furniture hits them. Scuffs are sure to happen, but on move-in day, they seem to sting a little more!
The most important tip of all, when it comes to buying a newly constructed home, is to educate yourself as much as possible. When it comes to finding the perfect new place to call home, buying a newly constructed home offers many benefits.
These benefits include the builder being able to customize the home before the construction is complete. That means everything from colors to walk-in closets to suite bathrooms and professional kitchens, among many other personal touches.
Financially, buying a brand new home versus a previously-owned home, is a more economically responsible option, due to the fact that new homes won’t need costly repairs for years to come! Also, most new homes now are more energy-efficient, resulting in lower utility bills. Maintenance costs are also lower because of new appliances, plumbing, wiring, heating, and air.
These tips are just a guideline to help you through the process of buying a newly constructed home. Although the process has much more depth to it and takes more time, the end result is definitely worth it!