Building a brand new home is a dream come true. With a big, exciting, and yes – sometimes scary, move like this you need all the help you can get to make the right choice.
Here are 7 things you absolutely need to be aware of before buying your brand new home:
1. Sales person works for the Builder and not for you.
You walk into the beautiful New Build Model, you’re filled with emotions and your imagination is doing the work for you by placing your future right into this home; so many thoughts are racing through your mind, and “I don’t need an Agent” might be one of them.
Wrong! You are emotional, therefore you might experience clouded judgment. That’s exactly WHY you need an expert, who knows the “rules of the game” and can watch out for your best interests, after all the salesperson representing the builder will negotiate against you and not for you.
2. Taxes
The taxes you see are not taxes you get. The Builder is paying taxes on the land (typically below .5%), but now you have a house on that land and the following year right after the purchase taxes will be assessed so your tax rate will go up and typically it is 1.2% – 1.6% of the purchase price (depends on the area and district).
Your monthly tax payment might be triple what you originally thought.
3. Builders have a Budget.
No, you will not be saving any money if you will go directly to the builder and bypass the Buyer representation. That’s a Myth! Builders have a budget and every buyer has the right to professional representation when purchasing the biggest investment of their life.
Get an agent and let them save you money during the process.
4. “Buyer beware” of building time
Your monthly tax payment might be triple what you originally thought.
Typically it takes 6 – 8 months to build a house and that’s exactly what builders will tell you (well, of course it will depend on the weather, 3 party partners, contractors...etc) and for that very reason there is a paragraph in builder contracts explaining that a builder has up to 2 years to finish the project. Make sure you have a good agent and reputable builder.
5. Builder should provide you with a Home Warranty
After all of the inspections, walkthroughs, and improvements, the Builder will provide you with a limited warranty for the house and a structural warranty. Make sure you understand the coverage, wear and tear, and maintenance of the house.
Don’t forget to register your appliances with the manufacturer.
6. There are several phases to the building process.
There are a lot of steps in building a house, but we are talking about how many lots and phases the builder is planning for. For Example: there are 3 phases and each phase will have approximately 120 homes – 6 year project.
If Builders are in the first phase of the construction it means you might get a good deal, but will be living in the “construction zone” for the next 6 years. If Builders are finished and you are in the last phase, it might not be the cheapest home in the area, but you will live in the established neighborhood.
7. Brand New doesn’t mean Problem Free.
Builder, salesperson, general contractor, super, design center, contractors, 3rd party companies...I can keep going, bottom line is, there are a lot of people involved in the building of your new home. Don’t be afraid to speak up, ask or triple check on the progress. If you have a good agent and reputable builder, then both of them have the same goal. Make sure your house is just the way you want.
