Recently, I had the experience of helping a great couple go under contract on a new construction deal in Back Country, Highlands Ranch. I’m very familiar with doing new construction and it dawned on me that the questions I ask when helping my clients could be missed if you were building a new home without the help of a Realtor.
So, here are some questions to ask when building a home.
- When building a new home, you should always ask the builder what’s the base price of the home and what does your average customer spend when they go to the design center. Too often I hear sales reps say, “You can easily get into this house for $550,000” when in reality their customers spend upward of $60,000 in design meaning you probably won’t get into the house under $610,000.
- You should always ask the builder what’s included with the base price and what’s additional that’s required that the builder does not cover. Some examples are landscaping and fencing. Does the builder do front and back landscaping or only the front? Do they put up any fences? Recently my clients chose a lot with a view and the builder required them to have a walkout basement on that lot. The total cost for the basement, the above deck, and extended ceiling height came to an additional $40,000 on the purchase price just for choosing that lot.
- You should always ask the builder about the lot premiums. If the lot has a view it’s going to cost more. Some builders only have lot premiums of a few thousand and I’ve seen them go ask high as $90,000. It’s important to know what the amount is and how it’s applied to the house. Is the lot premium an addition to the base price of the home or is it wrapped up into that price? If the base price of the house is $550,000 and the lot premium is an additional $30,000 the real cost before you spend any money on design or landscaping is $580,000.
Here are some other very important questions for the builder before signing on the dotted line:
- Is the earnest money hard, refundable, or creditable?
- Does the builder pay for your title insurance?
- Does the builder put in sump pumps or just sump pits?
- How long does it usually take the builder to complete a home?
- How tall are the standard doors in the home?
- Are there any specific requirements by the builder for that lot such as a walkout basement?
- Are there any incentives the builder will offer for using their lender?
- What happens if the home does not appraise?
- What happens if your lender cannot close by the contract date?
- How does the wait list work?
Building a new home can be one of the best experiences of your life. However, without the proper guidance by a professional Realtor you may miss some important questions that could turn your dream into the most expensive nightmare imaginable.
Marc Bayes is a Broker Associate with the Colorado Dream House Team, Keller Williams Realty DTC. Contact Marc at 720-606-4286 marc@coloradodreamhouse.com
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