Six Questions to Ask When Buying New Construction

There are several advantages to buying a new home: Fewer known (and unknown) issues, less immediate need for repairs, and the ability to get a house customized to your needs. But buying new construction often comes at a premium cost. If you want to buy a new home, you have several options. According to data from the U.S. Department of Housing and Urban Development along with the U.S. Census Bureau, sales of new homes surged over an eight-year high. But new residential construction is coming at a steeper price: In 2016, the average price of a home jumped to $351,000 - $100k higher than the 2009 average, according to the NAHB. While new homes will cost more than older ones, there are still ways that you can save. Like buying anything in this world, you need a certain mindset to be able to get the right deal. Here are some essential questions to ask: What incentives do you offer clients who use your title and lender company? This is something that custom builders are more willing to offer. Companies who are affiliated in a partnership will often give you a discount on closing costs or anything that will come along with the home buying process. Use this to your advantage, but shop around and consider more than just the interest rate. Factor in everything, and make sure that you’re getting the best deal. What is the quality of finishes that you put in your homes? Those stunning model homes are designed to lure you in, which means that many of the fixtures and amenities are higher end than used in a typical home. If you’re looking to keep costs down, purchase a home without upgrades. Along the line, you can always swap out the fixtures, especially if you can find them at a discount. That sweat equity will allow you to keep your mortgage payments low. What are your future plans for the community? Plan your next move carefully until you understand what the developer wants to do with the surrounding neighborhood. If you find out that the developer wants to build a big subdivision, it might be best to hold off until the community is more established. Do you want to be surrounded by the noise and traffic of ongoing construction? Another consideration is whether the same developer will be involved throughout the entire project. If another company takes over and the quality of the surrounding homes goes down, you may see your own home value suffering, and find yourself owing a $600K loan on a home that in the neighborhood of houses around is only worth $300K. Also keep in mind what the promised amenities are, and when they will become available. If you’re paying a premium for the promise of a deluxe clubhouse or pool that isn’t finished yet, then you may want to reconsider. Are there are any homeowners associations? What are there fees? Don’t let steep HOA dues sneak up on you! Find out up-front what the fees are. As mentioned above, if you are going to be paying for amenities that you won’t be able to take advantage of for several more months, it might be best to hold off or look at other, more established neighborhoods. What sort of warranty do you offer? Some builders offer different warranties on new homes, such as a year-long workmanship or a  ten-year structural warranty. When you purchase new appliances, these will also offer a warranty. Make sure that you understand what kind of damage these policies will cover. If you are buying new construction in Southern California, for example, make sure that it covers earthquake damage, or whatever other natural disasters you are most likely to encounter depending on where in the U.S. you live. Would I be able to meet former clients? Always make sure that you speak to references, either by going around the neighborhood or researching online. Ask if they would ever work with the developer again. You want to be certain that the developer you choose is reliable and trustworthy. If there are a lot of people that would not work with them again, you should probably look elsewhere for a home. Contributed by James Link SetSchedule has changed the way real estate marketing is viewed, by changing the way REALTORS® access clients and listing appointments. SetSchedule is a “first of its’ kind” exclusive membership based model that provides verified appointments, marketing tools, and elite invite only networking events for its members. By blending new technologies, and thought processes with proven success methods SetSchedule had incurred record producing results unseen in the industry.