When shopping for your home, you'll discover that most homes on the market are resales. Yet, one out of four homebuyers purchases a new home. Both new homes and resales offer advantages. Before you make a decision, Let's Compare:
New Homes
• Offer innovative use of space and style
• Greater energy efficiency
• A choice of options and upgrades
• Everything is new, and modern
Existing homes
• On the average they are less expensive
• Often they are in established neighborhoods with mature landscaping
• Homes have already settled, and often come with window coverings.
As you can see, there are advantages to both. Most people consider both new and existing homes before they decide to purchase. Should you be thinking about buying a new house, here are 10 points to consider before you visit your first model home.
1) Get in touch with your Agent.
Before you visit your first model home, sit down with your agent and do your homework. You'll want to be prepared so that you can determine a comfortable price range for your new home.
If you own a home, you'll first need to know the net proceeds from its sale in order to determine how much cash you'll have to work with. Don't simply estimate this but carefully calculate every possible selling cost. If you're a first time buyer, you'll need to first qualify your income. Determine the size of your down payment, then work out a monthly debt load so you can determine a comfortable price range.
2) Sellers' Agents Versus Buyers' Agents.
Here's a good point to remember. The sales agent in the model home represents the builder, not you. They are known as sellers' agents. As a buyer you can work with a buyers' agents at no additional cost. It's his/her business to best represent your needs by being knowledgeable about home construction, warranties, financing, differences in pricing, quality, even lot selection so that you get the best value for your money.
3) A Builder For All Reasons.
Like all tradesmen, builders vary in their fields of expertise. For example there are builders who specialize in craftsmanship, others who are known for their innovative use of space, and those who offer below-market financing or customer attention during construction and after move-in. Determine your own specific needs or preferences then shop around for a builder that will best address your requirements.
4) Get the Facts about your builder.
Before making a final decision, it is wise to check out the reputation and financial strength of the builder. Get “spec sheets” on home features covering everything from floor plans to energy efficiency, including lot availability and delivery of your home.
5) Check out the neighborhood.
• Learn as much as you can about the community.
• Discover what amenities it has to offer.
• Investigate if financial reserves have been set aside to build or replace major amenities like schools or community roads
• Find out from local land use officials what else is planned or could be constructed in the are, especially where vacant land is applicable.
• Review the rules for the homeowner's association, or find out if one will be set up.
• Think of how you will be affected by commuting routs and times.
6) Choosing Options and Upgrades.
Options are items the builder installs during construction, such as adding usable space like a sunroom or a powder room. These features can add the most to the resale value of your home. Upgrading means selecting quality above “builder standard” such as carpeting, ceramics, detailing, kitchen fixtures and appliances. Be sure to take advantage of builder incentives that offer free upgrades or credit off the sale price.
Remember, you can add a patio, tiled floors or landscaping later and sometimes for less money.
7) Negotiations.
Often buyers don't realize that there may be room for negotiating price, upgrades or options. For example, you have some scope for negotiating with the builder if they have a completed home but it hasn't sold yet. Also some “ premium lots” are priced higher and are sometimes saved to be sold last. Keep in mind that typically, all lots cost the builder the same, so be sure to inquire about lot pricing. Builders may offer discounts or special financing to help close a sale.
8) Be sure the contract works in your favor.
When spelling out the particulars of an agreement with your builder, ensure you protect yourself by having safeguards written into the agreement, such as:
• Placing your deposit in escrow
• Detailing your upgrades
• Allowing you access to the construction site to check on progress.
• 30 Advance notice of the closing date.
• An explanation of what the fine print means in the warranties of the builder and manufacturer
9) Financing – What's Best for you?
Some builders, who place large number of loans can offer special financing packages. However because “home loan” lending is highly competitive, you have many financing choices other than those being offered by the builder. Shop around for different rates and lender fees. Appraisals, inspections, surveys, attorneys and closing fees can vary as well.
10) Just because it's new… - Doesn't mean it is perfect!
Yes it's new and typically it's built with modern materials that are durable, low maintenance, stronger, quieter and safer. However because nothing is perfect, even if it is new, consider hiring a reputable, licensed home inspector. Then create a builder “ punch list”, from what you've learned to address any problems before closing. Consider budgeting for items to be modified or added later on. Many new home buyers use a real estate agent to help them negotiate the best price and terms with the builder.
Here's a fact that you may not be aware of. Some builder have newly-constructed homes available for immediate delivery. Usually these homes are ready to move into within 30 days. Even if some builders are eager to sell, they'll probably keep that knowledge to themselves.
Immediate delivery homes are often available for various reasons:
• The community, where new homes are bing constructed is nearly complete, so the builder proceeds to have the on-site-contractors build “spec” homes (homes built on speculation for sale)
• The model home is for sale
• The contract on a home has fallen through
• Builder include constructing homes for immediate delivery fro buyers who are relocation or who have sold their previous home and need one to move into quickly
Immediate delivery homes may be more desirable because, often times the builders offer financing incentives or free options. This may be done in place of chopping prices to appeal to buyers purchasing later in the building phase. An immediate delivery home is an advantageous way to purchase a home if you need to move in quickly, or need a physical space to walk through and see before you sign a contract.
The MLS is an extremely convenient way to narrow down your search. When you find local listings that you feel fit your needs, call us (480-258-3438) to make an appointment to view your selections.
