Questions to Ask When Buying New Construction Homes

If you are searching around the market for a brand new home, you are in luck; they are being built at an 18 percent increase from the previous year, which is about 840,000 new homes. The biggest downfall to buying a new home is the price tag attached. The average price of a newly built home in 2015 was $351,000.

The market is what it is, and there are still ways you can save when you purchase a new home. It’s a lot like car shopping and you need to have a strategy to get the best deal. Ask builders these questions in order to find the right home for you.

What financial incentives do you offer for using your preferred lender and Title Company?

Builders don’t often set a precedent for negotiation sales prices. This is because if a home is listed at $400,000 and sells for $390,000, the next buyer in the lot over will want to buy that home for $380,000. However, it is not uncommon for builders to offer incentives for those who use their preferred lender and title company.

They may even knock off a big chunk on the price tag. They have also been known to sweeten the deal by negotiating prices on finishes like adding hardwood floors instead of carpet.

It’s not a bad idea to keep shopping for a lender with different quotes in the meantime. Interest rates aren’t the only thing you are shopping for here; compare each loan estimate terms to make sure the deals match up.

What are standard finishes?

When you walk through the model home in the development, keep in mind this is the high-end version of the home you are considering. The models are spruced up and are there to entice the buyers. So you should which options are standard, which are upgrades, and what the cost is for those upgrades.

The best sway to cut your cost is to move into a home without the upgrades. Then you can either hire a contractor, or do the work yourself (if you’ve got the skills). It’s no secret builders charge a ridiculous markup for their upgrades, so if you can get it done cheaper elsewhere, that’s the best plan.

What are your distant plans for the community?

If the land is a sizeable piece the builder might have plans to build several subdivisions. If you are one of the early buyers, and there are still 50 lots to build, you may be dealing with months and months of construction noise.

Another risk is the builder loses their funding and another company takes over. Whatever the situation is, it has the ability to affect the value of your property.

What are homeowner association rules and regulations?

The builder should provide you with the HOA Declaration of covenants, conditions, and restrictions. The HOA usually assesses homeowner penalties for infractions. Yes, some HOA are stricter than others, so watch out!

What warranties do you offer?

Most builders offer a one-year workmanship warranty, and a 10-year structural warranty. Be sure to have a document that states what is, and what is not covered under their warranties.

You should also receive a manufacturer’s warranty for items like the dishwasher, hot water heater, both laundry machines, etc.

Can you connect me with your past clients?

Always check as many references as you can. They’ll give you an idea of what your builder is actually like. Ask questions like, “How did the developer handle your concerns?” and “Would you use this builder again?”

A lot of builders will only provide their best references, so it’s up to you to find some of their past clients. Just knock on the door of some of the homes they’ve built, I am sure they won’t mind at all. 

Post a Comment