Blog Post Title Goes Here

(October 10, 2015 )

The property is often sold by the builder and they are most likely invested in selling numerous units at once. This can lead to a different dynamic between buyer and seller throughout the negotiating and purchasing process.

Buying newly built or pre-construction home comes with a unique set of considerations. Potential buyers may be enticed by the ability to customize their specific unit, modern features and every efficient materials! There is a tendency to get caught up in this excitement and one may overlook some of the key details that will affect the bottom line.
 
Here are some things to take into consideration:

1. HIRE AND EXPERIENCED AGENT
Most model homes/units are commonly employed by a real estate agent who has a relationship with the builder. It is crucial that you are represented by your own agent who has your best interests at heart. 

2. BUYING INTO HALF FINISHED DEVELOPMENTS
You have probably seen numerous partially completed projects while driving around the city. Have a healthy dose of skepticism when contemplating these properties. One is never fully aware of all that is going on behind the scenes. These developments may take much longer to complete than planned, and in some instances may never fully be finished. 

3. NEGOTIATIONS
As builders can be hesitant to drop prices and/or set a precedent for future buyers, it is important to get creative with negotiations. Consider having them cover an upgrade or closing costs. Your agent will be able to research the builder and their prior sales in order to help you through the negotiation phase.Don’t sign anything until everything has been negotiated, agreed upon and written into the contract. If you’re considering purchasing a home that is not yet complete, it’s very important to spell out how the home will be finished, what will happen if construction is not completed on time and the deadlines for decisions that will occur through the process. Verbal conversations are not binding, so everything important must be put in DONwriting and signed by all parties.Pro Tip: Builders often use customized purchase agreement documents in place of standard forms commonly used in your area. Ask your agent to get a copy of the builder’s documents to review in advance.

4. What you see isn’t always what you get.

DON'T BE FOOLED BY THE MODEL UNITThe fit and finish of the model home doesn’t necessarily represent what comes standard.Often the model home reflects a mix of standard materials and fixtures, as well as a handful of upgrades. When touring the model home, make sure to find out which is which. The important thing is to know exactly what you’ll be getting, what’s available and, of course, what it will cost. Keep in mind that costs can change. The price quoted at the start may not be the same when you decide to move forward.
Pro Tip: Ask your agent to help you get a list of standard features and, if available, a list of common upgrades and their associated costs.

5. Do your research on the builder.

Visit other developments and talk to homeowners. Search online for reviews, testimonials and news. Keep in mind that many builders will have both happy and unhappy customers in their past. Look for trends in reviews and make sure any concerns are covered in the purchase agreement documents.Pro Tip: Ask your agent if they’ve worked with the builder in the past or are aware of their reputation.

6. Get a guarantee.

You’re often buying a home that is not completed. What guarantees do you have the home will be ready on time? Your purchase agreement documents should specify a completion date. However, many builders add provisions that make the completion date dependent on permit approvals from the municipality or availability of building materials from suppliers. There can also be additional charges if you’re unable to close on time if your lender isn’t ready.Pro Tip: Ask your agent to point out in the agreement what happens in the event of a delay on either side.

7. Get the home inspected.

New homes have problems too. Hire an inspector to make sure everything is safe and up to code. Even though most municipalities require new homes to pass permit inspections, an independent verification with a qualified inspector is money well spent. In many cases, the builder will allow buyers to conduct an independent inspection and agree to repair code compliance issues but do not include a provision that would allow the buyer to walk away and retain their deposit if they are not satisfied with the result of the inspection.Pro Tip: Ask your agent to investigate and explain the inspection process and your rights in the agreement to request repairs or terminate the agreement.

8. Find out what’s covered.

Many new homes come with a warranty from the builder, but not all warranties are created equal. Know what is and isn’t covered and for how long. Many builders use a third-party warranty company. In some cases, the manufacturer of certain products, like windows, may have a separate warranty or guarantee and the builder might refer all issues with those components to the manufacturer instead of handling any issues directly. The builder should be able to provide details on which part of the home is covered by which policy.Pro Tip: Ask your agent to obtain warranty information early in the process so your offer documents can be prepared to address any concerns upfront.





2. Being Hypnotized By the Picture-Perfect Model HomeWant to know one of the secrets of the new home trade? When buying new construction, you almost never ever get to see your actual home or unit. You see a model or prototype that is similar in floor plan to the home or apartment you are purchasing. Those model homes are always decorated and dressed to look magnificent. The developers and designers employ all kinds of techniques to make the model home appear bigger than it actually is. Often times they have furnished and staged them with slightly smaller-scale furnishings to make the rooms look bigger. For example, bedrooms generally have double-sized mattresses rather than traditional queens or kings. 

3. Going With The "Flow" of a Model Home Builders often employ a technique in their model homes to give the place more "flow" when they remove most of the interior doors between rooms to give the model home a much greater feeling of space and an open floor plan. I'll bet you have never even noticed. Don't let that little door trick slam you in the face! Be sure to consider the space when the doors are on the hinges and shut tight! 

4. Not Knowing What's Included vs. Extras and UpgradesWhat's extra? Find out exactly what upgrades are ― and are not ― included in the price you are being quoted. For example, you may think you're getting an incredible deal, but what you didn't think to ask was if the finished basement and the gourmet kitchen package are included. And, oh yeah, the walk-in shower isn't included in your basic package. Once you start adding in those "wow" elements, the price can skyrocket from affordable to out-of-your-budget. 

5. Going on an Upgrade Shopping SpreeBe conservative about which and how many upgrades you select. Determine which you can live without or do on your own later. Just as with any retail business, builders make profits on the upgrades. Don't get caught up in the frenzy and throw your budget out the new double-paned designer window (with custom shades, naturally). 

6. Not Getting a Completion ClauseWhen's it going to be finished? When purchasing new construction, you are at the mercy of the builder's timelines. What is the date of completion of the house? Does it coincide with your needs? Make sure you get a cancellation clause or a refund of deposit clause if the builder does not complete by a specified promise date. 

7. Ignoring Previous PhasesLooking at the new homes in phase two of a development? Go back to phase one. You may be overlooking a better deal. And you may be ignoring a lot information about the builder/developer that could be very useful. If you are buying in a community that is in phase two or higher, then hit up some neighbors from phase one. How easy was this developer to deal with? Any suggestions? Advice? In addition, notice if the phase one neighborhood is already established, with grown-in landscaping and completed, lovely homes. You might just prefer that to a future phase surrounded by bulldozers, infant trees, and blowing dust. 

8. Not Carefully Reviewing the Surrounding Homes and NeighborhoodWhen buying new or pre-construction homes, you have the ability to pick the lot and the location of your home. However, can you see the neighborhood completed in your mind's eye? Will the house that is yet to be built next door block your view? How close will your neighbors be? Will your living room end up looking into your neighbor's master bath? Keep all that in mind. Also, consider the surrounding neighborhood. Are these shiny new homes surrounded by a rough neighborhood? You may be living in a new gated community, but that's still your neck of the woods. Make sure you love it all. 

9. Waiving Your InspectionJust because you're buying a brand new home that is in the process of being built from the ground up, it's a huge mistake to try to save a few hundred dollars and bypass the inspection process. In fact, it's a good idea to get an expert eye on a new home as it is being built. And if you can, have someone check out the house-in-progress. Get someone who can identify potential problems. You can oftentimes hire an inspector or an outside contractor to stop by the property and then pay him or her an hourly r