Special offer

Walk with Caution with New Build Construction

Real Estate Agent with Dirt Road Real Estate SA676002000

New build construction works for many as the home buyers can have the house constructed to their desires including all upgrades. However, caution is essential before signing that new build construction contract.

First, and foremost cautionary step, builders do not represent you as the buyer. This lack of representation is in the fine print and often "glossed" over. Not being represented can create serious problems.

Second, undertake your own research regarding the builder. Drive through the areas where the builder is working. If possible talk to neighbors who appear to have purchased a home built by the builder under consideration.

Third, extend your research to costs for new build construction as well as local codes.  Is the builder doing the minimum as required by code or more than the minimum?

The fourth cautionary step, before walking through the new build construction office, consider talking to a local real estate agent who can represent you. 

Fifth, the majority of new construction builders will not refund the earnest funds, the deposit, even if the buyers change their mind.

Sixth cautionary step before completion of the new build construction home, many buyers fail to have the home inspected by an outside independent home inspector. This report should be in hand when walking through the final walk through with the builder or his or her representative. Sometimes this final walk through is called the "blue tape" walk.  The blue tape marks areas that need to be repaired.

Seventh, the final walk through should not be undertaken in a rush. Schedule at least two hours for this inspection of your newly constructed home. Remember to bring that independent home inspection report with you. Also write timelines for completion of all repairs.

Yes, a new construction home is a great solution. Just remember these seven cautionary steps to ensure you are happy when you receive that Certificate of Occupancy.

Feature Photo Courtesy of ListReports

Any reproduction of Leanne M Smith’s blog for use by any AI or GAI, distribution or reproduction including but not limited to electronic newsletters e.g. PDF’s Internet sites or physical products e.g. newspapers, CDs without prior written permission and consent by me, Leanne M. Smith (Leanne Hoagland-Smith) is strictly prohibited.

Posted by

Leanne M. Smith, MS, GRI, rCRMS

2018 KGVAR Rookie Realtor of the Year-55+
219.508.2859 MST
Life Begins Where the Pavement Ends
Connect with me on LinkedIn:

Comments (4)

Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Leanne - beyond actual construction obstacles, there are many other stumbling blocks that can impede a successful close when buying a newly built home.  Your thoughts on the subject make for a thoughtful post.  

Feb 22, 2024 06:22 AM
Leanne Smith

Good morning Michael Jacobs My seven cautionary steps are not everything as you indicated. My goal was to hopefully encourage new construction buyers to think before they act. Thank you again for the kind words.

Feb 22, 2024 06:30 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Realtors should take a breath before agreeing to Represent Buyers with their entire New Construction ( COE Article 11 2nd paragraph) …

Feb 22, 2024 09:44 AM
Leanne Smith

Agreed about area of expertise. However I live by Article I "protect and promote." Clients should always be represented because some builders are not as ethical as others.

Feb 22, 2024 12:20 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Well here in my market to get approvals to build can go from 15 months to three plus years depending well... so when a new construction comes on the market it is a swarm fest and buyers should take your advice....but many do  not, Endre

Feb 22, 2024 09:11 PM
Leanne Smith

New construction here is usually less than 12 months. Also at least one builder here "claims" buyers forever if they stop by without their real estate agent or if the agent has not registered them That registration is only good for 3 months.

Feb 23, 2024 04:45 AM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I have heard many stories of disappointment from buyers who were unrepresented when purchasing a newly built home.

Feb 23, 2024 04:48 AM
Leanne Smith

As have I. My sense is if a builder has a great product there is no reason to tie them up to the fence.

Feb 23, 2024 04:49 AM