New Construction – Do’s and Don’t’s
The first thing you do need to do when you are thinking of building a home yourself is to get a real estate agent. They have relationships with trusted and qualified builders already. You need to be represented just as you do when you are buying or selling a home. Do background research on the builders that you are thinking about going with. Ask them for schedules of build times and for floor plans. Try to find out how organized they are. If it is a new neighborhood they are building out, try to pay attention to how professional they seem to be. Have your real estate agent tell you about them as a builder and their experiences with them in the past.
Make sure if you are building in a new neighborhood to remember that it can take several months between a contract to the closing table. Make sure that you don’t go out and buy a new car or change careers in between the time you are approved for a loan and closing. Your loan officer should advise you on this but just be aware that you will be approved for the loan but you have not closed on that house until you are at the closing table before you move in on your closing date. You could be structuring financing in a different way if you are buying land outside of a new neighborhood and building on your own but always make sure and check with your loan officer on any major financial decisions to make sure you are not jeopardizing the closing of your home. Make sure that you understand the expenses that are going to come along with the home over time. The property taxes, utilities, maintenance, and HOA fees are all costs to take into consideration.
Do play with floor plans. Start out by looking at what the builders have to offer in your price range. Don’t waste your time looking at floor plans that are way out of your price range. Don’t be afraid to ask a builder to customize a floor plan for you. Tell them what you don’t like about a floor plan and give them a chance to fix it or see if they can get one for you that works. Sometimes what they have put in front of you is not everything they can do.
If a builder has a model home somewhere, go and view it. Maybe they have a website to go do a virtual tour on or a local neighborhood they are building. It will give you a chance to view their work. Keep in mind that model homes often use parlor tricks like smaller furniture to make the rooms look larger etc. so when you are walking through the home, don’t pay too much attention to the décor and pay more attention to the detail of the building craft and floorplan.
When you are doing tours of the model homes or working with builders, always ask for a list of their pricing for the upgrades. Do you like the crown molding and double garage doors? How much is it? Don’t ever assume that extras are included because they are not most of the time. There is normally a basic starting price and then the extra pricing for the upgrades comes in. The model homes normally have all of the upgrades in them. When a builder gives you a price for a home, ask for a list of exactly what comes with that and that means everything down to what kind of flooring will be installed.
Pricing on new construction can be complicated. Something that you don’t want to do is to buy in a neighborhood that is priced way above homes of similar size in the area even if it is the same pricing as other homes in the same new neighborhood. This is another reason you should work with a real estate agent. They can tell you if the homes are being priced right for the area or if they are running comparables off of each other and you are going to lose money when the neighborhood sells out and settles in. Don’t buy the most expensive home in the neighborhood. You want to be in the mid to low end. That way you will be brought up if anything in value.
Do hire an inspector anyway. Most people think of home inspectors for resales. Your real estate agent will probably suggest that you hire a home inspector for new construction as well. They will find things just as they do with resales. You can have them come in during your walk-throughs to make you feel more at ease with the process of building. Most new construction comes with home warranties as well. Make sure that this is included in your purchase.
If you have any questions about new construction or building a home in the Huntington Beach area call James Harvey’s Team at 714-612-9535.