Buying newly constructed real estate isn’t much different from buying an “already used” home.
What variances there are, however, can make all
the difference between buying a diamond or a lemon.
Here are a few tips to keep in mind when buying new construction:
Tip #1: Don’t Use The Builder’s Sales Agent – Hire Your Own
If they’re the builder’s agent, they’re being paid to represent the
builder, no matter what they tell you. Your own real estate agent, who
is representing you, is required to tell you the negatives as well as
the positives. The builder’s agent doesn’t have to tell you the
drawbacks of the transaction.
Tip #2: Find Your Own Lending Agency
Again, if you go through the builder, the lending agency may offer
you a deal that isn’t in your best interest. In addition, the builder
may actually own the lending company, and will have full information on
your personal progress.
Your real estate agent can refer you to a reputable lender, if you don’t already have one of your own.
Tip #3: Talk To A Real Estate Agent Or Lawyer
Although standard agreements are made to keep everyone out of court,
they aren’t necessarily in your best interests. Ask about cancellation
rights and make sure you understand both your liability and your
commitments. Also, check your contract to make sure it doesn’t contain
warnings about health issues.
Tip #4: Decide What Options Or Upgrades You Want
Remember that the profit margin for many builders is highest in
upgrades. Find out if your lender allows the options and upgrades
you’ve chosen to be added to the loan. If your lender doesn’t allow
this, the cost of the upgrades will come out of your pocket in cash.
Tip #5: Research The Builder
It’s amazing how many people think a builder is good, simply because
they can build a house. Unless you’re a licensed home inspector, the
chance of you catching a cut corner or shoddy building practices is slim
Check out the neighbors’ homes and talk to them. Are the homes a
consistent size or are they shrinking in size? Do the neighbors have
consistent complaints about the quality of their homes? Also, check
public records for lawsuits.
Owning newly constructed real estate and knowing that you’re the
first person to live in the home can be a wonderful, exciting
experience. Make sure that you protect yourself so you can enjoy it!
Thinking of buying newly constructed real estate? Talk with me before
you start shopping. If you visit a builder prior to working with me, I
won’t be able to legally represent you with that builder.
To find out more about how I can help you save money and get the best
terms when buying newly constructed real estate, call or email your
trusted mortgage professional for more information.