Purchase of a newly constructed home can provide many advantages, from upgraded carpeting and no one else’s initials inscribed in wet cement to no previous owner marking their mark in its walls. But new construction also presents challenges.
Mortgage rates have increased, making it more challenging for would-be home buyers to qualify for the purchase price of a new home. But builders may offer incentives that could aid this process.
Do Your Research
Buying or building a new home requires researching when choosing your new house builders. Take time to look in the real estate section of newspapers for active builders in your area and what kinds of houses they’re creating. Talk with friends and family for recommendations if possible.
Visit a builder’s model home to gain inspiration for your new home and discuss what features and upgrades would best meet your needs. Remember, however, that model homes are showcase pieces and may contain the fanciest upgrades possible; be sure to ask what comes standard and the additional costs associated with extras like custom woodwork or custom tile floors.
Ideal, you should find a lender who specializes in new construction home loans. While builders may offer to finance independently, it is always a good idea to shop around for the most desirable terms and rates; your real estate agent can assist.
Once you’ve narrowed your choices, drive around each lot where builds are undertaken. If the lot is situated in an attractive neighbourhood, speak with residents and observe the quality of construction firsthand. Furthermore, inquire whether there is a homeowner’s association and any fees associated with being part of one, if applicable.
Get a Home Inspection
Home inspections are an integral component of homebuying. An inspection can identify problems you should discuss with the builder to address and ensure that everything meets local code regulations.
Inspectors assess various things, including roofing, insulation, ventilation systems, electrical panels and equipment, plumbing fixtures and fittings, heating/cooling units and driveways. Following their inspection, they will prepare a report outlining their findings which they will send directly to you within days.
New house builders can recognize issues more readily than those without such specialization, and it is wise to have this inspection performed once your house nears completion but before its final walkthrough with the builder.
When selecting an inspector, be sure to get references from friends and family and check their website or Better Business Bureau profile to gauge customer opinions of them. Furthermore, choose someone familiar with building codes and isn’t afraid to use them in his inspection reports; too many inspectors fail to incorporate this aspect of new construction inspection reports properly, leading to numerous Certificates of Occupancy being awarded despite obvious violations such as missing attic insulation or uninstalled gas lines leading to leakage despite receiving certificates.
Get an Incentives Package
Real estate companies frequently offer incentives to buyers when working with certain builders or purchasing new homes, including free upgrades like granite countertops, swimming pools, hardwood floors and more; financial inducements; structural/material upgrades. In order to make the most of your home buying experience, you must understand how these incentives operate before working with any builder.
Builders offer incentives to attract potential buyers and sell homes quickly. Sitting on inventory for too long is costly in terms of maintenance and taxes, and the money from sold homes needs to go toward funding future construction projects.
Builders frequently offer special financing incentives that wouldn’t otherwise be available through mortgage lenders, including buy-down of interest rate deals to reduce the total cost of ownership and save you money in interest payments.
Be wary that these offers can be misleading; for instance, they might only apply in certain neighbourhoods or when using the builder’s preferred lender and the title company for closing. It can add thousands in additional hidden costs; to ensure there are no miscommunications between parties, builders must provide you with a list of available incentives so there can be no confusion regarding interpretation and communication between parties.