Should you buy an existing home or have a new one built is another decision you need to make during the home-buying process. If you decide to go with new home construction, a real estate agent can be a powerful advocate in your corner as you negotiate upgrades, a move-in date and other important terms with the home builder.
Below are some basic suggestions to prepare you for your journey ahead.
Selecting the right builder
Shopping for a custom home builder or a large production can be an exhausting task. Start by defining what architectural styles and layouts would appeal to you and then seek out the builders in the area you are thinking about who offer those type homes. Due diligence is essential on new construction. Ask friends for referrals; verify the builder’s state license status, if applicable; and check whether or not they’re certified by the National Association of Home Builders.
The builder representative and your real estate agent
A builder representative’s ultimate goal is to sell you a home. His or her role is to provide a wide range of information to help you in your decision-making, from building restrictions, roads and easements to inspections, warranties, rebates, HOA and upgrades. A real estate agent knowledgeable in new-home construction will be able to help you wade through all the data and point out the downsides and upsides of each line item. Your agent also can look out for your interests in reviewing the builder’s contract, which often contains more legal jargon than consumer-friendly language.
Timing is everything
Market conditions greatly dictate a builder’s incentive to make a deal you can’t refuse. When a builder has excess inventory on hand, his carrying costs start adding up. When this happens, a builder might be more likely to strike a favorable deal, whether it’s throwing in upgrades or taking a bit off the asking price. A real estate agent can help you know when market conditions are right for these attractive benefits. Also, watch for builder close-out sales. Builders promote these special events when a new subdivision is near completion but empty inventory still remains.
Paying up front?
While there are always exceptions, most builders require a deposit when a purchase agreement is signed. They also require that the buyer pay for any upgrades prior to closing. If you back out prior to closing, unless the agreement states otherwise, you will lose that money. Make sure you understand every detail in the builder’s contract before signing it.
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