Top 7 Tips for Buying New Construction Homes

Top 7 Tips for Buying New Construction Homes
By Eric Bramlett


New home communities are more popular than ever! With good reason – new home builders are using popular, open floor-plans, including appliances, sod, and blinds, and helping make it easier than ever to get into a new home with little or no money. New home transactions typically seem a lot easier, as well. If a buyer chose to, they could get through a new home transaction without contacting anyone except the on-site sales agent! However, this would open you up to HUGE losses. Take these simple steps to protect yourself in a new home transaction, and to ensure that yours is a success.

Use a Realtor Who Has New Home Sales Experience

Many people think that they can save money by not using, or don’t need the services of a Realtor when buying a new construction home. This couldn’t be further from the truth! New homebuilders typically try to monopolize a transaction – they only give you their attractive incentive packages if you agree, in writing, to use their lender, their title company, and sometimes even their insurance company! A Realtor will walk you through the transaction and will make sure that you’re protected every step of the way. If you’ve agreed to use the builder’s lender, your Realtor will make sure that you get a fair interest rate & fair closing costs. Your Realtor will know what the industry standards are, and will make sure that the builder doesn’t try and stretch beyond these. And best of all, a Realtor with a lot of new home transactions under their belt will have established relationships with your homebuilder. Because of this, the homebuilder will be on their “best behavior.” The homebuilder doesn’t want to run the risk of getting a bad reputation in the Realtor community, who can potentially bring the builder lots of homebuyers in the future. It really just comes down to the trust level you do or don't build with the realtor's in the subdivisions.


Don’t Sign ANYTHING Until You’ve Worked Out Every Detail of the Sale

Buying a home can be very emotional – and it should be. You’re not simply picking out a house; you’re picking out where you’ll spend the holidays next year, where your parents will come visit you, and where you might raise your children. However, the on-site sales agent will try and play on this emotion and get you to “write up the contract so that no one else can get your house.” That’s just fine, as long as you understand what you’re signing, and everything is okay with you. Just remember – no matter what is said, everything will be done as it is outlined in the contract.


GET A HOME INSPECTION!!!

Most people who buy new construction homes don’t bother to get a home inspection. Most new homes come with a one year “bumper to bumper” warranty that includes everything, and many homebuyers feel that they can find out if there are any construction flaws during those 12 months. The problem with this mindset is that many problems won’t surface until well after the 12 months. Remember, your home was built by humans, and humans make mistakes. And, no matter how much experience and reputation a builder brings to the table, it’s still next to impossible for that builder to double check every part of the job their subcontractors have completed. A licensed inspector will go through a very thorough checklist to make sure that everything has been accounted for. At the very least, get an inspection so that you can sleep soundly at night, knowing that an independent third party has given your new home their stamp of approval.


(Preferred Lenders

A lot of builders offer incentives for using preferred lenders. Make sure you check into the details of what it will cost YOU to use that lender, and weigh out your options of benefit versus cost. As always... do your research!)



Research the Builder
Most builders are “good” builders. They take simple steps to protect their neighborhoods. Research your builder, or ask your Realtor if your builder takes these simple steps to make sure that your neighborhood won’t instantly go down in value:

1) Limit the # of investor purchases – this makes sure that the neighborhood doesn’t turn into a “rental” neighborhood & allows the “pride of ownership” to shine through.

2) Continues to build equal or greater value homes in the same and surrounding neighborhoods. Builders who avoid doing this create a “vacuum” in home prices and instantly devalue new home purchases.


Choose Your Appraiser

You’re going to pay for an appraisal one way or another! The lender will require that you have an appraisal in order to loan you the money for the home! Additionally, most appraisers charge about the same of money for the service – so why not choose your appraiser? Ask around until you’ve been referred to a good appraiser and request that they perform the service. Ask for a copy of it and read it! Call your appraiser if you have any questions. This will give you an in-depth knowledge of the market area – and it’s something you would pay for, regardless!


Research City Plans

New neighborhoods are typically on the outskirts of town – the land is readily available and less expensive, which means that you can buy a bigger house for the same amount of money. In these outskirt communities, it’s very important to know what the city has in store in the way of roads, zoning, public transportation, parks, and schools. These factors will dictate whether your new neighborhood will become the next “big thing,” or the next “cheap thing.” If you’ve decided to use a reputable Realtor, your job will be easy! Simply ask your Realtor and he/she will be able to provide you with lots of information about city plans that have been approved, and city plans that are still being talked about.


Happy House Hunting!
~Blalock & Associates
www.gohomesearching.com