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What You Need To Know About Buying
From A Builder
Purchasing a brand-new home from a builder
is a bit different than buying a home from a private seller. To avoid
any headaches or misgivings, you should be well aware of the differences
long before you step into the model home for the first time.
GO WITH AGENT – At the very least,
bring along your real estate agent when you go to look at a builder’s
homes. Agents deal with builders on a regular basis and know the
difference between new home sales and existing home sales and everything
that it involves. Some builders won’t pay a commission to your agent if
you don’t have an agent at the beginning of the process. If there are
problems later on and you need to bring in an agent, you may be on the
hook for their commission.
BUILDER’S CONTRACTS – Most builders
have salespeople on-site who are armed with ready-to-sign contracts, but
don’t be persuaded into signing just because it seems easy. Your real
estate agent or real estate attorney should help you with the
contract—from negotiating extras to deciding where to put your deposit
(hint: your deposit should be put in a separate escrow account in case
the builder experiences financial difficulties).
BUILDER’S MORTGAGE – Although
builders can arrange the mortgage for you, your best bet is to shop
around or use the same lender you’ve used previously. Of course, you
shouldn’t automatically rule out a builder’s lender, but you should
definitely consider outside sources. It may be a good idea to get an
offer from another lender and then see if the builder’s lender can match
that offer.
KNOW THE BUILDER – You’ll be much
better off if you do a little research on a builder first. Are they a
reputable builder? Have they had any problems with construction in other
subdivisions or areas? Is their company financially sound? When looking
for information on a specific builder, you have plenty of resources:
home inspectors, other homeowners, your local government, the Better
Business Bureau, and, of course, your real estate agent.
HOME INSPECTION – Just because the
house is new doesn’t mean it’s problem-free. In reality, the opposite is
very often true. A builder may be building many houses at the same time
and attention to detail may be lacking in some areas. Getting a home
inspection before you buy a new home is a must.
If you think it’s a good
time to buy a new home directly from a builder, you’re right. Builders
are trying to reduce inventory by cutting prices and offering
incentives. With the current market, builders are just as motivated as
sellers of existing homes are. But, for the most part, that’s where the
similarity ends. ∆ |
