The Honest Broker: Tips for Buying New Construction
1. Use your own Broker/Agent
ALWAYS use your own Broker/Agent; doing so will help ensure that you get what you want. Understand that the sales reps you meet at a new construction community are likely really representatives of the Seller and do the best job for the Seller that they can. By using your own Broker/Agent, you can be assured that there’s no conflict of interest
2. Don’t expect price reductions
Builders, etc., have established a set of prices that they feel best makes their product (the houses) marketable with an expected profit margin
3. Look instead for builder concessions in the form of additional upgrades
Rather than price reductions, you may be able to gain a few upgrades from the Builder at no cost, or for less money. Perhaps the Builder would be willing to include a fence, landscaping, upgraded carpeting, or appliances as part of your purchase without charging you extra.
4. Builder incentives in the form of interest rates, etc., may not be coming from the builder but the Builder’s lender.
While Builders can’t require you to use their preferred lender in order to purchase a home from them, they can require you to use their lender in order to gain the benefit of the incentive. You’ll want to check with your own lender first to see if they’ll match the incentive or can give you a benefit in another fashion before deciding to switch gears and go with the Builder’s lender. Remember that nothing’s really free, so be a bit cautious when making decisions like this one.
5. Expect to use the builder addendum
Generally those Builder forms include language specific to the terms of the building process and can be many pages long full of tightly packed terms.
6. Builder warranties vary
What a warranty covers and for the length of time can vary widely: structural, roof, plumbing, appliances, etc.
Be sure to carefully review the warranty offered by the builder of your desired home before signing the final contract.
7. The floor plan isn’t the floor plan
The little floor plan you see when viewing your potential home at the builder site isn’t an exact representation of what your home may look like. Upgrades may have been incorporated in the floor plan that you view in the sales office.
8. Rarely can you modify the floor plans
Unlike building a custom home, most community sites where several homes are being built by the same or a group of builders are based on a preapproved set of plans that have already received the stamp of approval from the local building authorities. In these pre approved communities, fewer options for modifications are generally allowed.
9. Expect changes
Builders typically reserve the right to substitute materials and finishes, sometimes leading to surprises.
10. Expect about 5 months after permitting and initiation of build to finish
11. Add an extra month or so to the anticipated build-out time
12. Be sure to include your Broker/Agent in every walk through; cc them on all conversations, etc.
Some builders really try to restrict Agent attendance, but in my experience, you need an extra, knowledgeable set of eyes and ears to help keep things on track.
13. Don’t expect perfection
As much as we feel we’d like to control every piece of the building of our new home, realistically the house won’t be perfect when it’s complete. If you do see problems, be sure to bring them to the attention of your own Broker/Agent who will assist you in working out any issues with the builder.
14. Walking the site will get you into trouble
Stay away from the construction site, especially during working hours. You don’t really want to disrupt work flow
15. Be nice to the foreman!
16. Take lots of pictures
This will be a nice reminder of the process but more importantly, you will have an idea of what’s behind the drywall.
17. Ask for leftover paint, vinyl, granite tiles, carpet scraps, etc.
18. Do your own inspection
Typically the items found on your independent inspection will be repaired by the Builder, but will not affect timely close of your purchase. Builders often retain a time period after closing to repair defects.
Stay well and healthy
Diane Lott, Broker
Paradise Found Realty, Inc. of Palm City
Email: [email protected]
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