After weighing the benefits and drawbacks of buying a brand new home you may decide that it is an option you want to explore. The process of purchasing new construction is not the same as buying an existing home. It has a different set of considerations you’ll need to make about the process. Here are some of the things you should know before purchasing new construction.
Research Builders & Developers
Not all builders are created equal. You’ll want to do thorough research on any builder you consider buying from. You should research their financial history- you’ll want to be sure that they are in a solid financial position to protect your investment. You’ll also want to learn about their reputation. Some things to inquire about are the quality of the homes they build, the satisfaction of previous clients and how they respond to warranty claims.
Buying a home in a new development can mean you have limited options to what types of utilities are available to you. Find out what type of municipal utilities are available to you in terms of electricity, heating and cooling, water and sewer services. Also consider what type of entertainment utilities are available such as phone, cable and internet. You may have very limited options and may be dissatisfied with what they currently have to offer.
Taxes are an uncertain aspect of purchasing new construction. During the escrow process the title company will pull an estimate of what your property taxes will be. The estimate will be based off of comparable homes in your area. However, sometimes the tax estimate can be wrong. Be prepared for a tax bill that may be higher or lower than what was originally estimated.
Phase of Development
If you are moving into a new community you’ll want to consider how far along the construction process is. Ask the builder how many news home will be built and when the projected finish date is. Keep in mind that the finish date will most likely be later than what the builder is estimating. Speak with people currently living there about the level of construction noise and the behavior of the construction crews. Consider whether or not you’ll want to live in a construction zone for the next few years.
Picture Your Home
When you are walking through the model home which is filled with all of the high end upgrades and designed by a professional interior decorator it is easy to get swept away. Keep in mind while walking through that your home won’t look exactly like this. Inevitably there will be some features that you do not add to your home. Also, don’t let the beauty of the model home make you go over your budget while buying.
Everything is Negotiable
There are a lot of add ons when it comes to buying a new construction home. Remember that like the rest of the real estate market, everything is negotiable. Try to negotiate the cost of the lot premium, or get the sales representative to throw in some upgrades. Find out if the builder offers any discounts for certain types of professions, such as a military discount or educational professional’s discount.
Building a new home typically takes much longer than buying an existing home. Permits must be pulled for the lot and construction may not start right away considering any homes that went under contract before you. Most mortgage approvals only last 90 days, so you may need to get a new pre-approval. Additionally you may need to find living arrangements that are flexible around your closing date on your new home.
Bring Your Realtor
Your realtor is an invaluable asset throughout the process of building and buying a new construction home. They will have experience working with the builders in the area. They should be able to help you negotiate on upgrades and other costs. Remember to bring your realtor with you the first time you look at a home. If you don’t the builder representative will not pay for their commission and they likely won’t be able to work with you.
For expert guidance and opinion, contact Aceland Mortgage.