Buying a new construction home can be an exciting process! But there are pitfalls to avoid… I’ve included a quick checklist below that will help you secure the best deal on a new home:
- Find a great agent who is experienced in representing buyers and dealing with new construction. Be sure it’s someone who has experience in negotiating with home builders and is not affiliated with a builder. It’s crucial that you have an agent who is committed to your best interests. Your designated agent will give particular expertise when it comes to price and upgrade negotiations, knowledge of builder incentives, important factors to consider regarding future resale value and overall buyer advocacy.
- Know a builder’s pressure points. Builders don’t like to negotiate much on price. However, they are often willing to “throw in” upgrades and closing costs – if you ask. Builders prefer to keep neighborhood pricing in line, as sold prices affect everyone’s values in the community. Because of this, builders are often able to negotiate on the “back end,” giving buyers the opportunity to sweeten the deal in a manner less obvious to neighbors.
- Get absolutely everything in writing. Don’t sign anything until everything has been negotiated, agreed-upon by all parties AND added to the written purchase contract. Verbal conversations are not binding, so it’s critical everything is spelled out to the letter on paper.
- Get the home inspected. This may be a surprise, but trust me, you should never, ever buy any home without one. Even though new homes often carry a builder’s warranty, a builder’s work is only as good as their subcontractors. Plus, we’re all human and make mistakes. Catch any “oopsies” with an inspector’s second set of eyes before you close on your new home.
- Ask what’s covered under the builder’s warranty. Not all warranties are created equal. Know what is covered, isn’t covered and for how long. Builders commonly use a third party warranty company. In some cases, items in your home may be covered by the manufacturer under a separate warranty, and the builder may refer all of those issues to the manufacturer instead of handling the issues directly. Ask the builder to provide all of the details regarding all warranty coverages.
- Notice the new home community’s surroundings. Check with the city or municipality regarding what’s planned for the area around the new home community. Most builders put the responsibility on the buyer to research developments planned around or bordering the neighborhood. Do everything you can to have an idea of what the area will look like in 10 years.
- Do your “lender due diligence.” Don’t automatically use the builder’s recommended lender. Shop around for the loan that’s best for you, not them. By the time you’re ready to make an offer, make sure you’ve already spoken with a lender of your own. Keep in mind that many builders will require you to be pre-approved with their preferred lender, but you aren’t required to use that company. Ask what incentives the builder will give you to go with their lender.
Have more questions about buying a new construction home? I’m always here for you. Contact me below today: