Buying a new home is one of the biggest financial transactions you will make in your lifetime. If you are a first-time homebuyer, there are things you will need to do first to prepare. However, there are some differences if you decide to purchase a new construction home rather than a previously owned home. You’ll still have to figure out a budget and secure the financing to start the process. If you want to buy a new construction home, you will need to work with the builder as well. There are some questions you will need to ask your builder and other tips to consider.
Educate Yourself On The New Construction Process
There are a lot of things you will need to research when considering buying new construction. Just like buying a pre-existing home, you will need to research the neighborhood and schools in the area you want to build. Be sure and do your research about the developer or builder you want to use.
You’ll want to find the top-rated home builders in the area where you want to build. You can start by doing a google search for “best new construction builders in Dallas” or even narrow it down to the specific suburb or neighborhood. Look at the online reviews and testimonials and any other information you can find online about the local builders. Join the local social media groups, search for what the locals say about the builders, and get to know the people who live in the neighborhood.
Don’t be afraid to call or email the builder to ask questions. Be prepared to answer the potential builder’s questions they will have for you as well. See if you are a good fit to work together. One of the questions you should ask is, “What are the future plans for the development?”. If you are one of the first few buyers to build there, you may think you are moving into a small and cozy neighborhood, but you may find out the developer has much bigger plans than you expected.
Work With A Mortgage Lender
As with any new home purchase, you will need to shop around for the best loan. Work with a lender that gives you the best type of loan and interest that will meet your needs and budget. Keep in mind that there is a builder deposit you will put down. The builder’s deposit is usually 3% of the total selling price. Many builders will negotiate the down payment, so this is a question you should ask when choosing a builder.
Work With A Realtor Experienced In Negotiating With Builders
Did you know that the builder pays the agent’s commission to represent you and negotiate a better deal for you? Your realtor will also help you develop a plan and to figure out your wants and must-haves. The lender, builder, and the realtor will be your team that will help bring your dream home to reality.
Tips For Negotiations
Everyone wants the best deal, but when it comes to new home construction, that doesn’t always mean the lowest price. Your real estate agent will represent you in the negotiation process. One of the best ways to negotiate with the builder is with upgrades! Oftentimes the builder can’t drop the prices much because they have to maintain the value of the neighborhood for future buyers. Negotiating with upgrades is an easy way to maintain the neighborhood’s value and add on some upgrades that you didn’t think you could afford in your budget.
Put Everything In Writing
Once again, when you work with a realtor, they will ensure everything is in writing and hold the builder to their promises. Otherwise, something important could be overlooked or forgotten.
Tour The Model Home And Pay Attention To The Details
One of the benefits of buying new construction is that it’s customizable to meet your needs and wants. Each builder has its own style that often shows up in each home they build. See if the builder has a model home that you can tour, and then take notes on all of the features you love and the ones you don’t. Work with your realtor and the builder to communicate the upgrades that you want. The builder may have some limitations on what they can customize, but you will be offered a selection of colors and floorings and many other items you can customize to your taste. Make sure to get all of your selections in writing, too. And remember, your realtor can negotiate some upgrades for you. Keep in mind that the model home will usually feature lots of upgrades that are not included in the base pricing of your home.
Amenities And Upgrades
One of the questions to ask the builder is about the amenities and upgrades available. Amenities are something that will benefit the whole community, such as a health and fitness center. Upgrades are added features that you pay for, such as certain types of flooring or utilities. Check out the features sheet to see what comes with the base home price.
New Construction Home Guarantees
You are buying a home in good faith before it is complete and trusting the builder will do what they say they will do. Again, it’s important to get certain things in writing and get the builder to guarantee what they can. One example of a guarantee is the completion date, especially if you need to make other living arrangements while the house is in the building process. Another guarantee is regarding a home warranty.
New Construction Home Warranty
Most builders have a home warranty they offer, and sometimes it involves a third party. Coverage for the warranty varies for each different builder. Make sure you have an understanding of what is covered and get it in writing. Sometimes you can negotiate the warranty in the deal or add certain provisions to cover things not normally covered in their warranty.
The Home Inspection
A final walk-through is needed before you complete the purchase. People make mistakes, and a mistake may be found during the home inspection. Have a professional home inspector do a thorough inspection to ensure the builder didn’t overlook anything that could result in a potential problem with your new home. They can offer feedback, which you can ensure is taken care of before the final purchase. Once everything checks out to your satisfaction, you are ready to close the deal on your brand new home!
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