Buying a new home is extremely exciting! Choosing your lot and floor plan, picking out all your fixtures, watching the progress from foundation to framing to finishes. Just thinking about it makes you want to start searching for builders or visiting new models. But slow down, or you may risk losing money or negotiating advantages. Be sure to read these tips to make sure you get the best value for your dollar.
- You are not going to negotiate on price. This is not like resale properties where there will be a lot of back and forth. This is a new home that is being built to your custom specification and if you want it, you’ll be paying the prices they set. There are other ways to get a better value, but the only time price may be negotiated is when there is just a few homes left and they are looking to sell the standing inventory.
- Upgrades can help offset your costs to add value. Most of the time you can negotiate to get extra upgrades in the negotiation process. You can get some window treatments or wood floors instead of the included laminates. Some builders will even cover closing costs to make the deal.
- Using the builder’s in-house lender may offer perks. Many builders have an in-house or preferred lender they work with to provide financing for buyers. There may be advantages to using this lender—better terms or a rate that’s bought down. By law, the builder can’t make you use their lender, so if you feel pressured, be sure to discuss with your real estate agent.
- The advertised price is not what you’ll pay. To get the model home as viewed will take additional costs, usually tens of thousands of dollars. While this is not good for your budget, it is cheaper to do it now rather than later. Since they are already install a floor and walls, you’ll only pay for the material. If you do it later you will pay to have it torn out and then installed on top of the materials.
- Your home will not look like the model. They are showing you all the bells and whistles and what your home could be. But if you get the standard package you are not going to get the special finishes, extra windows, etc. Your home also will not be expertly decorated with the perfect sized furniture, custom fabrics and perfectly staged pictures.
- Not everything will work perfectly. Be sure you get, and understand, the warranties. Every house, even new ones, are going to have problems. Most warranties on new construction cover siding and stucco, doors and trim, and drywall and paint during the first year. Coverage for HVAC, plumbing, and electrical systems is generally two years. Some builders provide coverage for up to 10 years for “major structural defects.” Warranties also typically define how repairs will be made.
- You’ll be dealing with construction for a while. The peaceful life you envision can be a reality, but probably not from the get-go. Depending on the community, it may take time to complete construction. Which means dealing with congestion and hassle for the time being. Amenities like pools, sport courts, and trails may also not be built out by the time you move in. Asking ahead of time about the construction schedule can help you manage expectations.
- Don’t even look until you have your own agent. In general, builders’ model homes are staffed by agents who work directly for and represent the builder. A buyer also needs to have a real estate agent who represents them and looks after their best interests. Keep in mind that most builders will require that the real estate agent accompany and register the buyer on their first visit to the builder’s model home or community.
The best thing you can do when you buy a new home is to have an expert fighting for you and putting all their knowledge to work for you. Looking for more information? Call Helen today at 847.967.0022 or email [email protected].