3) All NEW Home Buyers Should Know These 10 Secrets
All NEW Home Buyers Should Know These 10 Secrets
Ten secrets every new home buyer should know… Read this BEFORE You Visit Your First Model Home! When shopping for your home, you'll discover that most homes are resale. One out of four homebuyers purchases a new home. Both new homes and resales offer advantages. Before you make a decision, let's compare these two options.
- Offer innovative use of space and style
- Greater energy efficiency
- A choice of options and upgrades
- Everything is new and modern.
- On the average, they are less expensive.
- Often, they are in established neighborhoods with mature landscaping.
- Homes have already settled, eliminating possible problems that arise from new construction.
As you can see, there are advantages to both. Most people consider both new and existing homes before they decide to purchase. Should you be considering buying a new house, here are 10 points to consider before visiting your first model home.
1. Determine a Comfortable Price Range
Before you visit your first model home, sit down with your agent and do your homework. You'll want to be prepared to determine a comfortable price range for your new home. If you own a home, you'll need to know the net proceeds from its sale to determine how much cash you'll have to work with. Don't simply estimate this; carefully calculate every possible selling cost. If you're a first-time buyer, you must qualify your income first. Determine the size of your down payment, then work out a monthly debt load to determine a comfortable price range.
2. Sellers' Agents Versus Buyers' Agents
Here's an excellent point to remember. The sales agent in the model home represents the builder, not you. They are known as sellers' agents. As a buyer, you can work with a buyers' agent to better represent your interests by being knowledgeable about home construction, warranties, financing, differences in pricing, quality, and even lot selection to get the best value for your money.
3. A Builder For All Reasons
Like all tradespeople, builders vary in their fields of expertise. For example, some builders specialize in craftsmanship, others are known for their innovative use of space, and those offer below-market financing or customer attention during construction and after move-in. Determine your specific needs or preferences, then shop for a builder that best addresses your requirements.
4. Get the Facts About Your Builder
Before making a final decision, it is wise to check out the reputation and financial strength of the builder. Get "spec sheets" on home features covering everything from floor plans to energy efficiency, including lot availability and delivery of your home.
5. Check Out the Neighborhood
- Learn as much as you can about the community.
- Discover what amenities it has to offer.
- Investigate if financial reserves have been set aside to build or replace major amenities like schools or community roads
- Find out from local land-use officials what else is planned or could be constructed, especially where vacant land is applicable.
- Review the homeowner's association rules or find out if one will be set up.
- Think of how you will be affected by commuting routes and times.
6. Choosing Options and Upgrades
The less expensive the base price of the house is, the more options and upgrades you can add without fear of overpricing it for the neighborhood. Options are items the builder installs during construction, such as adding usable space like a sunroom or a powder room. These features can add the most to the resale value of your home. Upgrading means selecting quality above "builder standard," such as carpeting, ceramics, detailing, kitchen fixtures, and appliances. Be sure to take advantage of builder incentives that offer free upgrades or credit for the sale price. Remember, you can add a deck, finished basement, or landscaping later, sometimes for less money.
Buyers often don't realize there may be room for negotiating prices, upgrades, or options. For example, you can negotiate with the builder if they have completed a home but haven't sold it. Also, some "premium lots" are priced higher and are sometimes saved to be sold last. Remember that typically, all lots cost the builder the same, so be sure to enquire about lot pricing. Builders may offer discounts or special financing to help close a sale.
8. Be Sure the Contract Works in Your Favor!
When spelling out the particulars of an agreement with your builder, ensure you protect yourself by having safeguards written into the contract, such as:
- Placing your deposit in escrow
- Detailing your upgrades;
- Allowing you access to the construction site to check on progress;
- A 30-day advance notice of the closing date. ‣ An explanation of what the fine print means in the warranties of the builder and manufacturer.
9. Financing - What's Best for You?
Some builders, especially in high-volume communities that place large numbers of loans, can offer special financing packages. However, because "home loan" lending is highly competitive, you have many financing choices other than those the builder provides. Shop around for everything, from rates to lender fees. Appraisals, inspections, surveys, attorneys, and closing fees vary.
10. Just Because it's New.... - Doesn't Mean it's Perfect
Yes, it's new, and typically it's built with modern materials that are durable, low maintenance, more muscular, quieter, and safer. But because nothing is perfect, even if it's new, consider hiring a reputable, licensed home inspector. Then, create a builder "punch list" from what you've learned to address problems before closing. Consider budgeting for items to be modified or added later on. Many new homebuyers use a real estate agent to help them negotiate the best price and terms with the builder.
Buyer Advantages Your Builder May Not Reveal!
Here's a fact that you may not be aware of: some builders have newly constructed homes available for immediate delivery. Usually, these homes are ready to move into within 30 days. Even if some builders are eager to sell, they'll probably keep that knowledge to themselves. Immediate delivery homes are often available for various reasons:
- The community where new homes are being constructed is nearly complete, so the builder proceeds to have the on-site-contractors build "spec" homes (homes built on speculation for sale) on the last lots;
- The model home is for sale;
- The contract on a home has fallen through;
- Builders include constructing homes for immediate delivery for buyers who are relocating or have sold their previous home and need one to move into quickly.
Immediate delivery homes may be more desirable because sometimes builders offer financing incentives or free options. This may be done instead of chopping prices to appeal to buyers purchasing later in the building phase. Immediate home delivery is an advantageous way to buy a home if you need to move in quickly or need a physical space to walk through and see before you sign a contract. Be sure to enquire.
When you start looking for a new house, you don't want any unpleasant surprises that could cost you your dream home. By understanding these tips, you will be well on your way to buying a home that meets your needs and provides enjoyment for years to come. I hope you found this special report helpful, but please realize that this is just a tiny part of the overall process. Please call us at 858-281-4659 to build a plan together to realize your goals.