New Home Construction Buying Tips
Buying a newly constructed house can be overwhelming and exciting at the same time. For some prospective home buyers, the thought of inheriting someone else’s dilapidated walls or worn-out tiles is distasteful when looking at pre-owned homes.
There can be pitfalls and some nasty surprises involved in buying new home construction directly from the builder. So before you purchase that brand new home, you may want to tread lightly and do your due diligence first. We’ll outline some new home construction buying tips that you should consider to land that brand new home that’s in line with the latest trends in design and construction.
Consider Hiring an Agent
Hiring an agent isn’t necessarily needed when buying new home construction, especially if you’re experienced in real estate. But being experienced isn’t always a guarantee that you’ll do well at the negotiating table. First-time buyers should head into the sale with an agent beside them.
When you go out to meet the builder or visit a model home, you’ll likely encounter the builder’s sales agent. That sales agent is being paid by and represents the builder. The agent may also earn a commission from each property they sell, so they may not be looking out for your best interests.
You don’t want to be outsmarted or pressured by them when you’re on your own. Many builders use robust marketing techniques. If you’re inexperienced in the real estate market, how would you know what they are touting as a special deal is the same thing offered by all builders? If you have an agent representing you, they’ll do the negotiating for you and weed out bad deals. They’ll look out for your best interests and will even search for better deals proactively.
Research the Builder’s Reputation
A builder’s reputation is always indicative of the quality of service they provide. With research, you can piece together the builder’s reputation in detail, including their level of customer service, competitive properties, and the best deals they have offered.
You should look for pending or previous lawsuits and check online reviews. You can also talk to people who bought from the same builder. Ask them if they encountered problems such as construction delays, hidden costs, or late turnover of property.
Check if their sold properties had construction quality issues. Do so by asking previous buyers about how often they have repairs. Delving more in-depth, you can look at previous inspection reports. These reports will tell you a great deal about hidden defects and construction quality.
Check for Incentives
Builders always offer a variety of incentives as a way of enticing prospective buyers or to finish off unsold properties in a development. Ask them about any incentives they offer. You can save money doing so and can even get free upgrades. Here are some of the most frequent incentives offered:
- Green features
- Price discounts
- Discounted or free upgrades on flooring, cabinets, or countertops
- Contribution towards closing cost
Consider Hiring a Home Inspector
Not all new home construction is without flaws. It’s very wrong to assume that everything brand new is perfect. You’ll be surprised that almost half of new home construction are noted to have significant defects. Hence, hiring a home inspector is your best bet in finding out whether the home you are considering is in good condition. The inspector can see hidden flaws that would’ve been otherwise hidden from the untrained eye.
A home inspection can cost you around $500 to $1000 on average. But don’t fret. This small payment will save you thousands in the long run that would’ve been spent in meaningless repairs.
The home inspection report can also be leveraged to your benefit by asking the builder to make repairs before closing out the deal. If they refuse, argue to lower the sales price instead. And with the right agent beside you, your negotiating power becomes more well-grounded.
All Agreements Should be in Writing
A verbal agreement is not a guarantee. With so much at stake, including large sums of money or perhaps years of inconvenience living in an undesirable home — insist on having written agreements. It protects you so when promises made by the builder are forgotten. Also, any changes made after the initial written agreement should be amended in writing. Verbal agreements do not hold up in court.
Team up with the Right Lender
Builders have their own recommended mortgage lenders for their benefit. But that doesn’t mean they’re teamed-up against you and will rip you off. There are merits in choosing the builder’s lender, such as buy-down interest rates from a fraction or two percentage points or even a significant discount from the sales price.
Though quite enticing terms, you should also research the lender’s ratings, credit values, and customer service. Get quotes from other lenders and study their policies, interest rates, and hidden fees. You’ll then have a good reason to choose the right lender for you in terms of potential savings and more — whether it be the builder’s lender or not.
For more information of how a Realtor can help you contact Rich Realty Group.
Rich Realty Group is the premier boutique residential real estate firm serving the greater Raleigh area. We are very knowledgeable about the unique neighborhoods of Raleigh as well as the market and future trends. Our expertise and attention to detail will help you find your dream home and invest for the future.
