Tips for Buying a New Home
Acquiring a new home is not the same as buying a pre-owned house. In fact, the process involves a unique set of issues. Compared to a subsequent buyer, you’ll have more information about the materials and systems installed. But there are unknowns present. If you’re looking to buy a new home, you should research several different issues before making an offer. Here are some helpful tips.
Getting custom features might be easier
With an existing home, you may have to negotiate changes with the seller, which might prove uncomfortable. But with new homes, the materials and labor are still on site, making it much easier to talk the builder into altering a few things prior to your move. Additionally, builders are often flexible and can, therefore, provide a lot more options when it comes to things like appliances, flooring and paint. Most of these options were non-existent a decade ago. If your builder hasn’t done all the changes by the time you close, using an escrow could motivate your builder to complete the work.
You may have other financing options
Since contractors work with banks, they might offer additional funding options. You’ll probably want to get prequalified with your lender before you start looking for a house. However, weighing every option is important, and you can use the builder’s financing offer to drive a better deal. Even so, builder-arranged financing alternatives are not always the better deal, which is why you should shop around and compare terms.
It is still a buyer’s market
When it comes to pricing, you may find that the pressure on builders enhances your negotiating power. Even so, this does not mean that you can get a new home with the same features and square footage for less than a pre-owned one. A new home has a much longer economic life, and you’ll get to personalize it without having to undo what someone else considered necessary. Additionally, you can get the latest technology and systems at a cost. Since advanced systems and appliances often mean lower power bills, you will probably save on energy costs.
Read your warranty carefully
Warranties vary widely, with some running for as little as a year and other for five years. If you have a warranty, the builder will almost always come back to fix your problems. You need to find out what the warranty covers, the solutions it offers and the duration of validity. Remember, knowing what the warranty does not cover and who backs it are just as important as understanding what it covers. You should, therefore, read the fine print carefully.
Get the yet-to-be-built amenities in writing
If you are buying a new home in a community built around specific amenities like a golf course, that’s part of the home’s value. A little due diligence is in order if the facilities are not yet complete, particularly if you’re banking them. With phased developments and new constructions, developers can run out of money. To reduce your risk, find out if the builder has posted bond for the incomplete shared amenities by asking a trustworthy agent, an attorney, or the local building department.
Though not all builders use this trick, many of them will include arbitration clauses in their contracts, as a result of which a buyer has to use a dispute resolution process instead of filing a lawsuit. Although arbitration might be a less expensive and quicker way to solve issues, a lot will depend on who picks the arbitrators and how the process is handled. It’s, therefore, important to ensure your attorney has reviewed every document before you sign the contract.