Buying New Construction-
Problems To Avoid
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With extremely low inventory of existing homes you may be getting a bit discouraged thinking you’ll never find your ideal home and in your price range.
Buying New construction may be a great option for you!
BUT, If you’re not careful, costs and expectations will sneak up you and can spiral out of control.
Today, I’m going to give you 4 Tips to order to Avoid costly mistakes when buying new construction.
Building New is super exciting. But before you sign any contract do a little homework first.
My first tip to avoid a costly mistake:
Many large builders have their in house or preferred lenders that may or may not offer competitive rates. “Knowledge is power, So shop around First.
When in-house and outside lenders compete for your business, you gain more leverage to negotiate loan costs or interest rates.
But here’s the Big One: Look carefully before accepting incentives offered by a builder’s lender; they don’t always save you money.
If a builder’s lender says, ‘We’ll give you $15,000 in incentives if go with us’
or the builder may say ‘we cannot offer you the incentives if you Don’t go with our lender’ .
If an outside lender charges a quarter of a percentage point less in the interest rate over the life of the loan, that $15,000 incentive may wind up being more expensive in the long run.
Always have your Own representation! and never register, or innocently give your information to the builders representative without your Realtor.
Your personal Realtor will be happy to arrange a visit to a model center for you. If you happen to be out driving around and stop in at a model center just to look..the first words to should say when the builders rep greets you “We just want to look around, We Have a Realtor who represents us”
You may be asked to fill out a registration card. Just make sure you give your Realtors name, telephone number and email address.
Otherwise, you may find yourself without a professional representative in one of the most expensive transactions you’ll probably ever make.
I know most all the builders reps here locally, and can tell you they ALL are very nice, accommodating and extremely helpful.. But they represent the builder..Not you.
Unless you do this quite often, you need to have a professional look after your interests, ask the right questions and be your advocate.
And best part in having your own Realtor..You pay nothing. Realtors fees are built in to the builders costs.
Fully Understand the Builders Warranties
When you buy a New Construction Home, did you know there are 2 types of warranties?
You’ll here the terms “Impied and Express” warranties. It’s important to know the differences.
Essentially, “ Implied warranties” cover defects in workmanship that impact a new home’s habitability, livability and safety, based on local building codes and standards. Implied warranties tend to be vaguely worded, and they usually have a 10-year liability cutoff period for builders.
An “express warranty” spells out the problems and remedies a builder is responsible for, as well as the duration of the warranty and a how to go about filing a dispute.
Builders live and die on their reputation, so they don’t want to get into long, drawn-out legal battles; this type of warranty provides more defined terms.
Fully understand the builders warranty. Again, this is another great reason to have your own realtor in your corner.
One of the Most exciting days you’ll have when building your new home is the trip to the Design Center where you’ll choose all your finishes and upgrades. When you walk in you’ll think you’ve gone to heaven with hundreds of choices you have to touch and marvel at..
I don’t want to be a buzz kill, BUT
Don’t fall into the trap of choosing upgrades that will not increase your homes value.
Believe me, they make it sooooo easy to do.. BUT Be strong..Don’t do it!
Here’s a tip: Upgrades from laminate counter tops to a level 1 or 2 Granite is a safe upgrade. Or maybe upgrade from carpet to tile or wood flooring is also a safe upgrade.
Things like going to the high end top level kitchen cabinets that will be an additional $10k is not a good idea for an upgrade right now. You will not get the return on resale or maybe be over improving for your neighborhood..again, not getting that resale return.
Tempting as it may seem at the time, you’ll be glad you stayed within your budget.
Also, if you’re curious about builders in the Polk County area and want to learn more about whats being built and where, you’ll want to check out my New Construction Website.
There you’ll find all the homes available right now, which lots are available, and which build stage the home is in. You will not see these on the MLS or any public website. And yes, It’s FREE..so enjoy!
I’m Lisa Kelly, and until then, I’ll see you on the next one.