Everywhere around the country, new construction homes are popping up for sale. These are when homes are in the process of being built, and you can pay to get one and have it designed how you want it, within reason.
These can be appealing as you can settle yourself into a brand-new neighborhood and have a home built for you. However, there are always risks involved.
Keep reading to learn what steps you need to take to make sure your new construction home looks and feels like yours without losing a lot of money.
Pay Attention To Hidden Fees
When it comes to purchasing a house, there will always be hidden fees. However, with new construction homes, there are quite a few fees you may not have thought about that could severely raise your prices without you even knowing.
Some examples are:
- Parking space fee
- Annual maintenance
- Stamp duty
- Processing fees
Make sure you understand all of the fees involved before planning out your budget too carefully or leave yourself enough of a budget that you can cover any fees you overlooked. That way, you don’t find yourself waiting on a home to be built that you can’t afford later.
Try to keep track of your expected mortgage cost, so you know what you owe initially and how much you have to pay every month.
New Constructions Are Risky
1. Make Sure You Research Your Builder
The first is to research your builder. This is the person that is building the place you want to live in, possibly for the rest of your life. You don’t want someone that doesn’t put in the proper time and effort to make sure a house is built correctly.
Make sure you have a builder that has a good history of quality work to make sure you aren’t left without a livable house when all is said and done.
2. Keep in Mind, You May Not Get The Home, Even With a Deposit
Getting a new construction home involves putting a lot of money down, and sometimes you may not even get a house out of it in the end. Make sure you read the contract fully to know if you can get the deposit refunded at the end if you don’t get a house.
Sometimes, there might be a window where you can request a return of your deposit. Keep these dates constantly in mind, so you don’t miss them in case you aren’t comfortable with the direction the building is going in.
3. Pay Attention to Features
Often, before you sign a contract on a new construction home, you will be taken to a model home, to get an idea of what you are purchasing.
This is nice, as it lets you get a feel for the home. However, often the model home contains some combination of regular and premium additions to the house. It is best to get a list of the premium vs. regular features in the house before you get your heart set on something costly.
This also helps you keep your budget where you want it, without surprising additional fees when you don’t realize some features aren’t part of the price and cost more.
4. New Construction Does Come With Benefits
Despite the negatives, getting a new construction can be a good idea. Some nice benefits can come with getting a new construction home, besides the fact that you will be the first person to live with it.
5. Make Sure You Make The House Yours
Though you might not be able to make the house however you want it, if you don’t mind paying a little extra, you usually can change and pick certain features that fit your style better. Sometimes, you can even choose the flooring plan, location, and even the details such as backsplash, counters, and flooring.
6. Check For Warranties From The Builders
When you buy a house that has already been built, what you see (and the things you don’t) are what you get. If something is made poorly, or there is something that needs to be replaced, that is entirely up to you and what you can afford.
However, when building a new construction home, you may find that you can get a builder’s warranty. Every warranty is different, and some builders may not provide any, but if you can get one, it can save you some money in the long run.
For example, sometimes, builders will cover the costs of the heating and cooling systems, windows, workmanship, and more. So talking to your builder could provide you with some nice benefits in case something isn’t done properly.
7. See What Builder Incentives Are Available
While you aren’t often able to lower the cost of a new construction home, you may still be able to negotiate in some areas. For example, perhaps you can negotiate for better materials or get an upgrade on the structure.
To sweeten the deal, builders may also offer to pay any closing costs or part of your fees for a small time. These fees may include:
- A few mortgage payments
- Property taxes
- Premiums on insurance
- HOA fees
If they don’t offer these incentives, don’t just assume they aren’t available. They may not advertise it, but they may have something to make the deal better for you, as long as you ask.