New homes are great, but they may have some hidden costs.
If you have been in the market for buying a new home, there may be something very attractive about looking at newly constructed homes. Buying a house is never something to be taken lightly, and because of this, it always feels better to be able to do things like picking out the new appliances you want, as well as the type of hardwood that should be put in the dining room floor. In addition, new homes are sometimes priced lower than comparable pre-existing homes. If you are interested in buying a new house, you should think about visiting homebuilder.com where you will be able to see the newly constructed homes in your area that are for sale.
However, with all the benefits of buying a new house, these newly constructed homes often come with drawbacks as well. For example, these homes often are marred by poor construction and workmanship problems. What follows are some ways that you may be able to avoid some of the pitfalls that come with new construction.
Find a seller before you find your home
Often times, at least with new construction projects, finding the right contractor and developer can make all the difference in the world. It is seen more and more regularly that many developers are just in it for the money. They will take your payments, throw together a house, give you the keys and disappear. These homes often have serious problems that cannot be addressed because the developer has vanished after the sale. This is why you should always take your time in finding the right developer to buy from. After that, you can then go about looking at the homes that the developer has contracted and finding the one that is right for you.
Here are some ways that you can find the right developer for you:
New Home Inspection
Before committing to buying a new house, you will want to make sure that you have an experienced and reputable home contractor or inspector walk through the home and do a thorough inspection. This inspection can find flaws in a home that you, as a lay-person, may not be able to find by yourself. If you are looking at a house that is currently being constructed, it is also a good idea to have the inspector walk through the unfinished home at a few key points in its construction process to ensure that the build quality is good.
If you are able to have your inspector walk through the home during the construction process, you should ask the developer to allow your inspector to view the home at these key points:
At these points, the inspector should be able to view and inspect important portions of the home, like the electrical system, heating, plumbing, roofing, insulation, and the walls.
Avoid Extras and Add-ons Unless Necessary
Developers are great at getting you to view homes by setting low selling prices. However, you should be wary when viewing low priced houses, because during the visit commissioned sales people often tempt you with appealing add-ons that will increase the purchase price of the home. These extras include things like granite countertops, skylights, hardwood floors made from expensive woods and more. Although they may be tempting, keep in mind that too many add-ons can dramatically increase the price of a home.
However, this is not to say that you should flat-out refuse any add-ons. If you are smart and willing to negotiate, you can get some extras and add-ons that may get you closer to the home of your dreams. Here are some tips to keep in mind as you consider add-on to your home:
New Home Warranties
There are stories of new homes that have started falling apart as soon as the new owners move in. From mold, mildew and termites to doors falling off of hinges, windows not opening and broken furnaces, there is always something that may go wrong when buying a new house. Depending upon the reliability of your developer, you may wish to purchase a new home warranty to protect yourself from the massive costs you may incur if your home turns out to be a lemon.
The best option when it comes to new home warranties is to purchase one from a third-party insurance company. Most standard home warranties generally cover craftsmanship items for one year, some built-in electrics for two years, and structural soundness for ten years.
However, if you trust your developer, you may wish to purchase a home warranty through the developer. In some states, home developers will offer an insured warranty to the new home buyer that will cover almost everything in the home for a length of time. If, on the other hand, you do not trust your developer to be around in ten years, you may want to find an outside option.
Try to Prevent Delays; Don't Close on a Home Too Early
When buying a new house, it is always wise not to close escrow on the home until the construction has been completed. If you close before the home is completed, you give the developer an opportunity to halt construction on your home.
However, there may be occasions where not closing on a home before it is completed is not an option. In hot housing markets, for example, you may risk losing the home of your dreams if you do not close before construction completes. In these situations, you will possibly face a very one-sided agreement, having to meet many deadlines that may prove to be difficult. Remember, however, that you are not powerless. Try to get clauses in the contract that will force the contractor to work diligently on your new home. In addition, get a clause in the contract that will give you the option of either cancelling the contract or collecting damages from the contractor if the contractor does not deliver the completed home by a certain time.
Finally, if you are being forced to close escrow on your new home before it is fully finished, you may insist that the money necessary to complete the work on your home be taken out of the money you have paid and set aside. This money will be released to the contractor once the necessary work has been completed to your satisfaction. If the work is not completed, you may be allowed to take the money and hire your own contractor to finish the work.
If you have closed on a home and the developer has not delivered it by the agreed upon date, you may be able to sue the developer to collect for any expenses that have resulted because of the delay. These costs could include hotel stays, rent, laundry, restaurant bills and more.