Thinking of Purchasing a Brand New Home ..... Some tips to consider before you do!

 

Purchasing a brand new home can be very exciting, to watching the construction, picking your colors of carpet, tile, countertops and even cabinets styles and colors.      You can buy the home exactly how you want it....or is it?     There are some great deals builders are offering to entice you into these homes, but here are some tips to consider before you walk in ---

1.    The sales people work for the builder.   The sales people are all so friendly, helping you choose the site, the style, questions you may have about the home, community, and building products.     When you buy directly from the builder, you are NOT represented.   If you have any issues along the path to closing, you, as an individual will have to get these worked out by yourself.    Most often, these sales people do not have a real estate license, they are hired to sell homes, and are paid only if they sell a home.     They use high pressure tactics to get you to sign on the dotted line.   HAVE A REALTOR TO REPRESENT YOU!    Realtors work with builders all the time, and we have relationships with builders, and they need us to bring our clients, and are very willing to help when buyers have issues.   Having a Realtor work in your best interest, they will tell you the pros and the cons of each home/builder.

2.   When choosing a lender, evaluate a few before making your choice.   Many builders have relationships with lenders offering a very low interest rate, and some for 30 year fixed.     Be careful you do not get into a loan that could potentially increase after 5-7 years.    Also, for this low interest rate, if you use your own lender, will the purchase price remain the same, and will you get the same incentives?     Builders often times have their own mortgage company and benefit financially when buyers use their lender, but closing costs could be higher.     Do you homework, and get a few Good Faith Estimates before choosing a lender.

3.    You need o do a home inspection.   You are buying a new home, and it has a warranty, so why would you need an inspection?     There are items that can get past a City building inspector, and if you do not get these items fixed within the first year, these items are now yours to repair.     You do a walk thru prior to closing, but you do not go onto the roof, into the attic, into the crawl space, etc. to check out all potential issues in a home.    You can look at an inspection as a small insurance policy, it is very wise to to take advantage of it!    With some new builders, you can have a drywall walk, electrical walk and a finished walk.   I have had a family get into their brand new house, only to move within 6 months of getting into the property.    When the new buyers did a home inspection, there were 12 items on the inspection notice, that should have been caught before the initial closing!   Good thing this home was still under warranty!

4.   Will this builder remain in business?  With so many builders either filing bankruptcy, or just leaving town - you need to do some research before giving a large "non-refundable" deposit to the builder for several months.    There have been several builders within Denver metro area that have closed shop, and left town, and left buyers high and dry with no house, and no earnest money.      It is wise to do some research on whether there have been lawsuits or complaints filed against a builder with the Better Business Bureau and public records.    Some homeowners in the neighborhood may be a good source of information, after they have moved in.    What was THEIR experience?

5.   Contracts for new construction is on their forms, written by their attorneys.    All offers for new construction needs to be written on their contracts, which have been written to protect the builder, and hopefully keep everyone out of court.    These contracts are not written for the builder's best interest.    If there are concerns, have a real estate attorney look over the contract for you.      With many restrictions in today's market, there are warnings on noise, smell and other hazards, be sure to check these out, especially if you have allergies, or current health issues.

6.    There are some good deals on spec homes.    With the economy tighter than in past years, if the builder has a completely finished home, ready for a buyer, there may be a better incentives if you "settle" on someone else's choice of colors.     These homes are costing the builder every day that it is just sitting on the market.  

Always remember - when comparing prices against resale homes, with new construction, you still have fencing, landscaping, window coverings, and maybe even appliance purchases to consider.     It is very nice to move into a home that has no previous smells, stains, or wall colors that YOU didn't pick, but there are definitely other issues that need to be considered before purchasing new construction.    

 

HAVE SOMEONE ON YOUR SIDE - AND BRING A REALTOR WITH YOU BEFORE YOU START LOOKING AT NEW CONSTRUCTION!

 

 Joan Cox, GRI,ABR,CRS, CNE,e-Pro      Denver Real Estate

A Denver Metropolitan Realtor       Search for Homes in Denver

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