Purchasing a home in a new development shares many similarities with an existing home purchase, but it also involves some key differences. Because we have dedicated professionals skilled at marketing new developments and we have local market experts who routinely represent new construction homebuyers, we have a thorough understanding of the new construction market and what these purchases entail. The following is a quick overview of how the process works and what you can expect.
Selecting a Geographic Area
Like any existing home purchase, the search for a new construction home starts by identifying a geographic area that is compatible with your lifestyle requirements. You need to determine what is a reasonable commute to work, an issue that’s often magnified by the fact that much new development occurs farther out from well-established commerce centers. Schools will also be of great interest to your family. If you’re seeking a pre-retirement or retirement home, consider the proximity of family and friends as well as shopping and medical services. Once these lifestyle issues are considered, you can limit your search to several qualifying locations.
Narrowing your Search
Working with a Coldwell Banker Sales Associate is a great way to evaluate the various developments and building sites in your preferred geographies. After several new home site visits, you’ll grow more confident in your ability to eliminate any potential sites that don’t feel right and you’ll be ready to move on to the next critical step in the process – finding your builder.
Selecting a Builder
Deciding on a homebuilder is one of the biggest differences between buying an existing property and purchasing a new construction home. To succeed, it helps to have guidance and research.
For starters, a reputable homebuilder will belong to a local homebuilders’ association. They’ll also provide you with references of past clients. For a more unvarnished opinion, you can visit one of the builder’s previous developments and politely ask any residents you encounter if they’re happy with their home and the development. You can even check with the local building inspector for an opinion on quality.
Why so much legwork? Because choosing a builder is just as important as choosing the style of the home. The builder not only has the responsibility for the largest investment you may ever make, but his or her skill and preferences will impact your future comfort and happiness. Each builder has a distinctive personal style. Make sure it fits with your individual tastes.
Determining the Amount of Deposit
Now that you’ve identified the right location and the right builder, it is time to go to contract. Most builders require anywhere from 10% to 25% down in order to start a home. If the home is up and standing, the builder will accept 10%. If you’re asking the builder to create a custom home, expect to pay a 25% deposit at contract.
The number of custom features available to you increases in proportion to the price tag of the home, but so does the time it takes to build. Realistically, a home built from scratch with an improved road to the home site, can take anywhere from 120 days to 18 months to deliver depending on a variety of factors. Keep in mind that the builder, who doesn’t get paid until closing, is anxious to deliver the home on schedule.
Handling Your Pre-Closing Inspection
Before the closing on your newly constructed home, the builder will conduct a home inspection tour, pointing out all of the home’s features and providing you with warranty information on each.
Learning about maintenance and upkeep responsibilities is very important. Most new homes come with a one-year warranty on workmanship and materials. However, such warranties do not cover problems that develop because of failure to perform required maintenance. Many builders provide a booklet explaining common upkeep responsibilities and how to perform them. Manufacturers provide warranties that are covered by the manufacturer, not the builder. In the unlikely event of a building code violation, the responsibility becomes the builder’s.
During the inspection, look for scratches in the counter tops and flooring. Walls should not have gouges and the moldings and trim should be square. You should take pictures before the title is taken, particularly if a problem is discovered. The builder will prefer, under all circumstances, to conduct any and all repairs prior to you moving in because it is easier for them to work on repairs in an empty house.
There are over 30,000 parts in a new home. Therefore, the propensity to find a small imperfection is great. However, many builders conduct their own thorough inspection before a buyer sees it. Most builders employ a cleaning service to make sure the home is clean prior to the closing.
After the Closing
It’s not uncommon to find settlement cracks in the drywall or nail pops a year after move in. These are easily remedied and are the responsibility of the builder. A call to the builder is recommended prior to the termination of the one-year warranty.