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New Home Construction

One of the main advantages of a new home is...it's NEW! New homes have new appliances, new plumbing, new electrical system, new roof, new heating system, etc. They also come with a warranty so you shouldn't expect to outlay money for repair costs anytime soon. Another advantage is the design process. If you sign a new home contract early enough in the building process, you can make some, if not all, of the decisions about the interior and exterior design.

Purchasing from the builder
Remember that the agent who is showing you the model home at “Happy Acres” is working for, and legally represents the builder. This agent must, by law, look out for the interests of the builder. This doesn’t necessarily mean that you’ll be treated unfairly, but there’s also no assurance that anyone is looking out for your best interests. You may not ask all the right questions and might make commitments you’ll later regret.

It doesn’t matter how friendly the salesperson is, it’s still important that you have a Buyer’s Agent working on your behalf. Most Realtors understand new home sales and can offer advice about the builders and the locations of their building sites. The will also assist you with the contracts, just like they would on any other home.

Most builders fully cooperate with agents because they want to sell their homes quickly and they know that most people looking for homes will already be working with a buyer’s agent anyway. The builder pays the agent a commission for providing a buyer and there is no additional cost or fee to the buyer.


The "Model" home
The sign at the entrance to “Happy Acres” indicated that you could have a new home built for as little as $156,500. The model you’ll be viewing is likely to be the deluxe unit with the luxury bath, a fully finished basement, an upgraded kitchen, designer wallpaper, top grade flooring and beautiful landscaping. 

It's important for you to know that your new home will not have all these options unless you pay for them. You could spend tens of thousands of dollars more than the base price for those goodies. 

Doesn’t this seem a lot like buying a car? It’s very much the same. Decide which options you must have and which ones you could live without. Keep in mind that you can always make certain improvements after the house is built.


Be careful of hidden costs and "Builder Grades"
Just because everything is fresh and clean in your new home doesn’t mean that there won’t be additional expenses. Landscaping generally isn’t included in the price of a new home. You’ll need to take care of that yourself.

Frequently, the sidewalks and driveway apron aren't figured into your initial building estimate. These are things that may need to be completed at additional expense prior to receiving an occupancy permit.

"Builder grade" and "construction grade" materials such as roof shingles, windows, bath fixtures, cabinets, and appliances are a lower grade, cheaper product. They are less expensive to the builder and less durable for the homeowner. It's a good idea to ask questions about the materials that are being used in your new home.

 
What happens when it’s time to sell?
You can expect your newly built home to appreciate at the same rate as any other home in the community. However you might find yourself
in the uncomfortable position of being in competition with the builder if your subdivision is still under construction when it comes time to sell. 

Not only will the builder be marketing newly built homes for the same price as yours, but he’ll also be able to undercut your price and still make a profit. A new subdivision may not be a good choice if you’re planning to move in a very short time.

How responsible is the builder?
Some builders use the finest materials and hire only the best subcontractors for each of the various jobs. Others cut costs by using the cheapest grade of materials that building codes will allow and awarding contracts to the subs providing the lowest priced labor. The quality of your home will depend upon which kind of builder is working for you. Take the time to ask a few questions and learn a little about the builder’s reputation.

How many houses have been completed in the subdivision? You have little reason to suspect any problems if the subdivision is large or nearly completed. On the other hand, if it’s just getting started, the reliability of the builder is crucial. If he can’t sell the project, or is under-financed, you may find yourself along with a few of your neighbors sitting in the midst of forty acres of vacant land.
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