Buying a home is a big investment, buying a brand-new home is an even bigger hit to your wallet. However, there are a few things you should know to help save you money. Here are some common mistakes buyers make when buying a newly built home:
1. Not asking for the latest incentives.
Remember the salesperson is working for the builder and has no interest in saving you any money. Make sure you ask them about their latest incentives and discounts, or better yet – bring your agent with you to ask the questions.
2. Assuming you can’t negotiate with the Builder
Brand new purchase with preset prices – how can that be negotiated? While you might not be able to negotiate the price, make sure to ask if they can add better fixtures, extra items, upgraded finishes, or even if they will finish the basement or can add an extra garage – I speak from the experience, it can be done!
3. Going overboard in the Design Center
Design centers are magical places, like Legoland for adults. You can pick and choose all of your finishes, colors and appliances – Exciting! Of course you want your house to be beautiful and just the way you like it. Keep in mind your home still has to go through the appraisal process and even if you get the best finishes, it might not appraise at the total price (lot + base price + elevation + design center finishes). This is the only expense you can control, be wise.
4. Not understanding upcoming Monthly Payment increase
Oh my, oh my...Taxes and HOA’s every homeowner’s favorite subject. When you purchase your home taxes will be shockingly low, it’s because the builder is only paying for the land. Now there is a house on said land, it will be reassessed and your taxes will go up. In addition, make sure the Home Owners Association (HOA) has some reserves, if they don’t you will see an increase in your monthly payments in a year or two after moving in.
5. Not budgeting for items not covered by the Builder.
Many buyers don’t realize things like garage door openers, refrigerators, washers/dryers, or yard work is not covered by the Builder. Items not included will vary depending on the builder, price point, and the area. I would recommend budgeting for such items to not get surprised by the “unexpected extra”.
Congratulations on your future purchase and great job on doing your research, we hope knowing these 5 common mistakes will save you lots of money and you will be very happy with your purchase.
