Top Tips when Purchasing New Construction
As a Certified Residential New Construction Specialist, Jennifer has the qualifications and experience when dealing with builders. Purchasing new construction is very different from buying an existing home. Here are some of the most important things to consider:
1. Have your own Buyer’s Agent
Model homes are staffed by the Builder’s real estate agent who are friendly, helpful and more than willing to sign you up, but in the event of problems they are not on your side. It’s important to have your own agent to represent your best interest. They can advise you how to structure your offer to be the most appealing to the builder to making choices that can affect your home’s resale. In addition, there are no cost savings to foregoing your own realtor as their commission has already been built into the price of the home.
2. Be creative during negotiations
In real estate, negotiation is always an option. However, with new construction, builders typically don’t drop their prices. They are reluctant to set a precedent for negotiating prices to prevent future homeowners expecting similar discounts. Instead, consider asking for closing costs or additional upgrades at no charge as negotiating “on the back end” is a less obvious way for builders to sweeten the deal.
3. Get everything in writing
The purchase offer and associated documentation for new construction are usually written up the builder’s customized agreements in place of the standard TAR forms. Don’t sign anything until everything has been negotiated and written into the contract. If you’re purchasing a home that’s not yet complete, it’s very important to spell out how the home will be finished and the deadlines for decisions that will occur through the process. Verbal communications are not binding, so everything important must be put in writing and signed by all parties.
4. What you see isn’t always what you get.
The fit and finish of the model home doesn’t necessarily represent what comes standard. Often the model home reflects a mix of standard materials and fixtures, as well as a handful of upgrades. The important thing is to know exactly what you’ll be getting, what’s available and, of course, what it will cost. Keep in mind that costs can change. The price quoted at the start may not be the same when you decide to move forward.
5. Get the home inspected
New homes have problems too. Even though most municipalities require new homes to pass permit inspections, an independent verification with a qualified inspector is money well spent. Hire an inspector to make sure everything is safe and up to code. In many cases, the builder will allow buyers to conduct an independent inspection and agree to repair code compliance issues. Having the home tested for radon is another important test to conduct, especially in Middle Tennessee.
6. Find out what’s covered
Many new homes come with a warranty from the builder. Know what is and isn’t covered and for how long. Many builders use a third-party warranty company. In some cases, the manufacturer of certain products may have a separate warranty. The builder should be able to provide details on which part of the home is covered by which policy.
7. Do your homework on preferred lenders
Don’t automatically use the builder’s lender even if there are attractive financial incentives on offer. Shop around for the loan that is best for you. Some builders require that you get pre-approved with the builder’s preferred lender. Its reassuring for the builder to hear of your qualifications from their own lender, even if you don’t wind up using them. They just want to be sure you’re a sound buyer before they go ahead and built the house.