Hello, Thanks for stopping by my blog today. Today I want to focus on buying new construction in our area. Presently our Raleigh real estate market and our Cary/Apex real estate market has an inventory of homes at an all time high. I’ve always considered building a home to be the most expensive way to buy real estate. However, some buyers just won’t have it any other way. Here is why. Buying a new home is great! You get to choose where your home will be built, add a sunroom here, third garage bay there and before you know it you are moving into your dream home. With all the options to choose from it is very easy to overlook crucial elements to your new home buying experience that could cost you greatly in both time and money.
1. Choosing upgrades with the lowest ROI or too many upgrades, period.
This is truly the most common mistake made by new home buyers who don’t consider the resale value of their home in the future. When buying a new home be sure to stick with the essential upgrades like two sinks in the master bathroom, high quality cabinetry and above all else, top quality padding under the carpeted areas. But going all out and ordering every upgrade is an easy way to become the most expensive home in the neighborhood – unwise!
2. Not examining your lot choice thoroughly enough.
A recent United Feature Syndicate by Lew Sichelman highlights some very important aspects to choosing a lot for your new home to be built on. Among them are: terrain, noting that people psychologically feel more secure looking down at the street rather than up, location and lot shape which can affect your surroundings including the possibility of facing the rear of a neighbor’s home. A choice lot will sit slightly up from the street and have a pleasing and private (if possible) view in the rear.
3. Finding communities first, vitals second.
When you are buying a home you have to shop differently than you would if you were buying a car or shopping for clothes. To save yourself much heartache and frustration, be sure to hammer out your lifestyle requirements before even searching for a community to build a home in. For example, if you commute to work and have school age children you would want to find a school district that you approve of in an area with multiple and quick routes to your work. Also, be sure and travel the route you will be taking at the time you will be making your drive to work.
4. Overlooking the “inspection” clause in builder contracts.
A dirty little secret in the new home industry is the fact that some builders, national builders included, send out contracts with a clause stating that they don’t allow home inspections by an independent, third party home inspector until after you close on and own the home. They offer to do a walkthrough of the home with you before you close but chances are, unless you are a licensed home inspector with many years of experience, you won’t notice any red flags beyond the superficial. Remember, many new construction neighborhoods have their own contract forms. They do not allow an offer to be completed on the standard NC Bar Association form. Both you and your agent should read this document very carefully. New construction/builder contracts protect the builder and NOT the home buyer – beware.
5. Not using a buyer agent.
When looking for a new home, be sure to find a buyer agent who specializes in new homes. There are numerous important steps when buying a new home that a new home buyer agent will be prepared to work with such as price negotiation, lot choice, researching future development around the community and the pros and cons of building materials your builder will use in the construction of your new home. At present, the buyer agent’s services are paid for out of the builder’s marketing budget. Many times, a buyer mistakenly believes that if they work with on-site agent they are getting a better deal. Nothing could be further from the truth, the on-site agent has a strong relationship with the builder. Putting a great agent to work on your side is essential to good balance.
6. Using the builder endorsed financing company out of convenience.
Many large builders have their own in-house financing company and they often offer incentives on their products by tying in the use of the incentives to financing through their in-house lender. In some instances you will find that the builder’s in-house lender financing and incentives will cost you more money in the long run than if you had financed your purchase through an outside lender. Rule of thumb: Always check your financing options with the builder’s in-house lender, a mortgage broker and a loan officer for a direct lender before committing.
7. Believing everything you read in advertisements.
If it looks too good to be true, it probably is. Always verify everything you read in real estate advertisements including newspaper ads and the community’s standard features list. Aside from the obvious typographical errors that occur I have also seen blatant false advertising. For example, I have seen new home community literature advertising the community’s short “less than an hour” drive to Research Triangle Park despite the fact that it would take at least 90 minutes on a good day from that community.
Buying a new home is a wonderful, dazzling experience that will cater to your every need. By using reasonable care and professional guidance you will enjoy many great years in your new home and reap substantial rewards from your diligent buying efforts when selling your home in the future.