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Opting for new home construction
Whether to buy an existing home or have one built is yet another decision to make
during the home-buying process. If you decide to go with new construction, a real
estate agent can be a powerful advocate in your corner as you negotiate upgrades,
a move-in date and other terms with the home builder.
Below are some basic pointers
to prepare you for the journey ahead.
Selecting a builder
Shopping for a large production
or custom home builder can be a daunting task. Start by defining what architectural
styles appeal to you and then seek out the builders in your area who offer those
styles. Due diligence is essential. Ask friends for referrals to get firsthand accounts;
verify the builder's state license status, if applicable; and check whether they're
certified by the National Association of Home Builders.
The builder representative
and your real estate agent
A builder representative's ultimate goal is to sell you
a home. His or her role is to provide a wide range of information to help you in
your decision-making, from building restrictions, roads and easements to inspections,
warranties, rebates and upgrades. A real estate agent knowledgeable in new-home construction
will be able to help you wade through all the data and point out the downsides and
upsides of each line item. Your agent also can look out for your interests in reviewing
the builder's contract, which often contains more legal jargon than consumer-friendly
language.
It's all about timing
Market conditions greatly dictate a builder's incentive
to make a deal you cannot refuse. When a builder has inventory on his hands, his
carrying costs start adding up. When this happens, a builder might be more amenable
to strike a favorable deal, whether it's throwing in upgrades or taking a bit off
the asking price. A real estate agent can help you know when market conditions are
right for these benefits. Also, watch for builder close-out sales. Builders promote
these special events when a new subdivision is near completion but empty inventory
still remains.
A word about paying up
While there are always exceptions, most builders
require a deposit when a purchase agreement is signed. They also require that the
buyer pay for any upgrades prior to closing. If you back out prior to closing, unless
the agreement states otherwise, you will lose that money. Make sure you understand
every detail in the builder's contract before signing it.