It’s
exciting to build a home from the ground up. There are fun choices to be made,
from selecting the hardwood floors for the dining room to choosing between
subway tiles or penny tiles for your kitchen backsplash. But don’t get so
caught up in your love affair with your soon-to-be completed house that you
forget about the things you really need to focus on.
“The key with new construction is really making
sure you have the home inspected and follow up that the builder remedies the
problems,” explains Keith Thompson, a real estate broker with Berkshire
Hathaway HomeServices Carolinas Realty in Charlotte, NC. But there’s much more.
Heed these tips when buying a new-construction
home and avoid
major issues down the road.
Oftentimes, buyers don’t feel a real estate agent is necessary when building a new home. After all,
there’s a sales agent on-site to assist you with your questions, right? Wrong.
“Many people figure that they do not need the
help of a Realtor,” says Ali Johnson,
a Florida-licensed real estate agent who specializes in new construction and
gated communities in Venice, FL. “They feel they can handle
it themselves, and that they have a sales representative working for them in
the new community that takes care of and explains everything, including the
paperwork. That person works for the seller, though. They represent the
developer’s interests.”
A real estate agent will work on your behalf
— and because the builder pays their commission, it costs you nothing to have
someone represent you during the new-construction process.
The same way you may research a new car is
exactly how you should look into a builder. “Make sure they have a good
standing with your state’s Construction Contractor’s Board, and that there are
no pending complaints or judgments against him or her,” advises Patty Brockman,
a licensed real estate broker at Windermere Stellar Real Estate in Portland, OR. “Ask questions about
whether they use independent subcontractors, and verify their licenses and
bonds as well. Always know the amount and kind of insurance they carry, as well
as the amount of their bond.”
Many builders use purchase contracts that are
much different from state-issued real estate agent documents. “Be sure to read
these contracts carefully and have an attorney and your Realtor review them
before signing anything,” says Brockman. “Builders’ contracts pretty much only
protect the building company, not the buyer, so make sure your Realtor writes
addendums that keep you protected during each phase of the purchase.” Also,
make sure you review all of the warranties so you know what is covered, and
what is not.
“A lot
of buyers have a ‘what you see is what you get’ attitude when it comes to
building a new home and looking at the model home,” explains Kristin Magnani,
an associate broker with Rutenberg, a real estate brokerage firm in New York City.
Model homes are decked out with all the bells
and whistles, explains Magnani, including high-end light fixtures, appliances,
trim work, architectural detailing, and more. Avoid assumption and ask
questions about every add-on or, better yet, ask the sales agent for a complete
list of the extras in the model unit such as extra can lights, heights of
doors, tinted windows (found mainly in high-rise apartments), and more.
“Does the house come with appliances? Window
coverings? AC? Landscaping in the front and backyards? Automatic garage door
openers? Sprinkler system?” says Brockman. “Always list in detail anything that
you expect, if it is not expressly disclosed in the contract.”
Home inspections aren’t just for previously built
homes. In fact, the majority of real estate agents will recommend that you have
the home inspected not only after it’s completed but also before drywall is
installed.
“As the housing market has heated up, the
pace of construction has also increased,” explains Keith Thompson. “Overworked
subcontractors and city or county inspectors are human and can and do make
mistakes when they have too much on their plate.” Avoid things such as uneven
walls or electrical or cable outlets in unfortunate locations (e.g., 4 feet to
the left of where your TV is supposed to hang)
by having pre-drywall inspections.
After an inspection, it’s critical to do a
walk-through with the builder. It’s during this time that you can point out
major cosmetic issues (such as nail pops or chips in cabinetry) or any other
major issues, such as missing landscaping that was included in your contract.
“Never close on a new-construction house
without doing a final walk-through to ensure that all of the punch-list items
have been completed to your satisfaction,” recommends Brockman. “The last thing
you want after you move in is a bunch of contractors doing touch-ups and finish
work while you are trying to enjoy your new house.” Plus, if you don’t address
it before closing, you may have a hard time getting the builder to fix anything
once the home is officially yours. So if you are looking to get a villa in rent
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