With the economy in repair, the new-home sales are also back on the rise, only this time the properties are more affordable. Just like any major purchase, it's imperative to understand what you're getting into with new construction.
When dealing with realtors, make sure to get a realtor that represents you, as the agents suggseted by the builder are paid to represent them as the seller. High-pressure tactics may be used by the builder's agent to persuade you to sign the contract and they won't discuss any drawbacks to this transaction. Your own agent will represent you, act as your fiduciary and disclose the positives as well as the negatives.
Be fully aware of all of the factors of a builder's lender before making the committment. Builders often are one step-ahead, since their lenders will keep them fully-informed of your personal progress. Also, if the actual builder owns the lending company they recommend, chances are, they aren't giving you the best deal. Sure, if they offer you 15% off the value of the home, it sounds like a great idea, but look closely and see if they require that you use their lender. Committing yourself to a single lender before shopping the market will pigeon-hole you into higher rates and closing costs. One important thing to remember is you need to know exactly what your credit report looks like and you are entitled to getting your own report before even speaking to lenders. Once you know where you stand in terms of credit and you've begun shopping around for the best rates, insist that your lender guarantee their Good Faith Estimate. If they shy away from it, take your business elsewhere - there is someone out there who really wants your business.
If one buyer has a bad experience with a builder, word can often spread like rapid-fire, but it's important to accruraltey assess the builder's history overall. Take time to check public records for any lawsuits or complaints and evaluate how you feel about their resolutions. This will give you better insight to the company's values and if you trust your investment in their product. This is not the time to be shy - speak with the neighbors in the development and see what they have to say about their experience.
Also, even though you have a brand-new product that the builders may swear by, just like buying a used home, hire your own home inspector. While new homes usually come with a 12-month wall-to-wall warranty, some of the significant problems with a house may not surface in the first year. If your selected inspector recommends calling an additional professional out, figure out if he is just not licensed to inspect a specific concern or if there is major potential problems down the line.
One final tip is to consult a real estate lawyer before signing a contract with a home builder. Standard agreements may keep you out of court, but they dont' necessarily include terms that protect you as the buyer. It is pertinent to understand you liability and commitments and to know what rights you have to cancellation or removal of contingencies. Additionally, if the contract includes a health warnring regarding the types of materials used, that's a huge red flag and it's time to go back to the drawing board.
Building a brand new home that is made just for you is a very exciting process, despite the headaches that come along with it. Being educated, asking the right questions and standing up for yourself as a buyer will eliminate many of the speedbumps along the road.
Contact us today: 214.923.0261 or email us: info@archwoodproperties.com
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