Special offer

Some Important Tips if You Are Building a New Home in Cleveland Ohio

By
Real Estate Agent with RE/MAX Above & Beyond

staircase

construction workersnew home construction

Building a new home can be  very exciting, but also scary. Having sold new construction in Brecksville, Broadview Heights, and Independence Ohio for 10 years, I can offer some tips if you think a brand new home is in your future.

  • A new construction contract is vastly different from a contract for an existing home. Read it, read it again and then read it one more time. Here are some clauses you might encounter
    • If the builder is unable to obtain the exact materials as specified on the plan, he may substitute materials of a similar design and quality.
    • Many builders require that buyers may not visit the site while the home is under construction. The builder is concerned about someone getting hurt on the premises and he would typically carry insurance only for the contractors that are working on the house and not on the buyer or buyer's family.
    • In the sale of an existing home the conveyance fee, aka the state transfer tax is typically paid by the seller, but in new construction, many builders have passed that cost on the the buyer. In Ohio it is $4.00 dollars per thousand of the purchase price so if your home is $300,000 your fee will be $1200.00. Their reasoning is that they have never lived in the home, therefor they should not have to pay the transfer tax. They may also say that you will pay half the cost of the title exam.
    • The builder will usually have a clause covering him for delays beyond his control, but if the buyer causes the delay he would likely face a per diem penalty of $100 or more.
    • Most builders get a break on title charges by using the same title company over and over again. If you want to use a different title company, be prepared for additional costs.
    • The house is ready when the builder and the city say it is ready. Be prepared to close.
    • Are you getting a construction loan or an end loan?
    • How much money is required down to begin construction?
  • Most builders offer a one year warranty on the home and you should read it carefully. Some will offer some extended warranties such as 10 years on the basement, so again, make sure you understand the warranty.
  • Study your blueprints carefully and ask questions if there is something you do not understand. Once you sign off on the prints it is likely that you will be charged for changes. 
  • Make sure all your change orders are in writing and they are being given to the appropriate person. Ask that you be copied on all correspondence.
  • ***IMPORTANT*** The taxes on your new construction home will likely be "land only" for the first 2 bills but that depends on when the home is assessed by the county. My recommendation to new home buyers has always been that when you have lived in the home for 6 months, start setting aside the full amount of your house payment including the "real taxes" so that whether you are paying them on your own or through the lender, you do not receive a bill from the county for $2000 or more that you did not expect or a letter from your bank saying that you need $2000 in your escrow account to cover the taxes.
  • Know what to expect after you move in. Does the builder have a 3 month, 6 month, or 9 month punch list? Or is it a combination of some sort?
  • Make sure you know which items are standard and which are upgrades. And remember that as you shop for the "fun stuff" such as flooring, lighting, counter tops etc, it is very likely that you will go over your allowance for these items so spend as much time as you can doing your research on the cost of these items.
  • One of the best recommendations I have when building a new home is to focus your spending on thigs that would be difficult or impossible to change later on, such as the use of and/or color of the brick or stone on the front of your home, the height of your basement, the height of your ceilings, and the placement and design of your windows.

Please feel free to call me if you have some new construction questions. I'll do my best to answer them.

If you would like to buy or sell a home in Broadview Heights Ohio or in the surrounding communities, please call me at 440-263-7496, or you may want to visit my website for more specific information on the communities I service: Brecksville Ohio Real Estate, Broadview Heights Ohio Real Estate, North Royalton Ohio Real Estate Independence Ohio Real Estate, Seven Hills Ohio Real Estate, Parma Ohio Real EstateParma Heights Ohio Real Estate and Middleburg Heights Ohio Real Estate.  Information is obtained from Neohrex and is deemed reliable but not guaranteed.

Comments (6)

Dan and Amy Schuman
Howard Hanna Real Estate Services - Solon, OH
Luxury Home Specialists

This is a very informative post and should be read by anyone thinking of building a home. Your expertise on this topic really shows.

Apr 15, 2009 02:31 AM
Barb Szabo, CRS
RE/MAX Above & Beyond - Cleveland, OH
E-pro Realtor, Cleveland Ohio Homes

Thanks Dan. How are your leads from last week coming along?

Apr 15, 2009 02:36 AM
Dan and Amy Schuman
Howard Hanna Real Estate Services - Solon, OH
Luxury Home Specialists

Still working them. They aren't in a hurry but I hope to meet one in person sometime this weekend. I got another one Saturday night that may end up being huge. I'll keep you posted.

Apr 15, 2009 02:42 AM
Barb Szabo, CRS
RE/MAX Above & Beyond - Cleveland, OH
E-pro Realtor, Cleveland Ohio Homes

Congrats. I can't wait to see your post on the huge one!

Apr 15, 2009 03:06 AM
Tim Bradford
Cleveland, OH
NMLS 250013

Barb,  Your post would make me fearfuly in purchasing a new home from a builder.   It sounds like the builder holds all the cards.  Besides knowledge and and an experienced Realtor how can a buyer protect themself and their interests?,

Apr 15, 2009 02:40 PM
Barb Szabo, CRS
RE/MAX Above & Beyond - Cleveland, OH
E-pro Realtor, Cleveland Ohio Homes

Tim, Knowing what to expect is half the battle. Buyers should read their contract and warranty carefully and get questions and concerns answered and addressed before they sign anything. If you are working with a reputable builder, it is a step by step process and should have few surprises. My intent was not to scare people, just educate them.

Apr 15, 2009 11:04 PM