Starting from Scratch? Get Your New Build Right
You’ve finally decided to go for it and build your own new home, congratulations! The pandemic has taught us all plenty, but most importantly - it's taught us the different ways we can use our own spaces, a mastery in itself. Unused areas of our homes are suddenly hot real estate for work, play, school, or relaxation. With your new build, you get to curate your spaces.
Getting a build started can be relatively daunting with large amounts of paperwork and legal jargon, so it’s always important to do your research.
To make the most of your once in a lifetime build, make use of these great tips:
Your Agent is Your New Best Friend
This might sound a little silly at first glance, but your agent can help you save money. Finding a truly trustworthy resource to help you navigate the terrain and explain unfamiliar terms is essential to your home build success.
A builder’s contract can run up to 60 pages of legal jargon and is certainly not something to review alone. Your agent will give you expert help with this, as well as negotiating with sales agents, understanding your deadlines, what the contract consists of, and the many things a new homeowner may encounter. For example, unexpected costs, changing your mind about features, timeframe, and other important contractual details.
Don’t become the poster child for “buyer beware”!
Words to Live by: "If it's Not in Writing, It's Not Happening"
Just like any agreement, putting it on paper is of utmost importance as it cements the contract and allows you to refer back to what’s expected and when. Keeping deadlines in your contract allows you the transparency to know what should be getting done and when a certain part of your build will be contractually completed.
Any changes you decide to make and the costs associated need to be in writing as well as appended to your existing contract. Without these written and signed contracts, you won’t have the legal protection you need in the event of something going wrong with your build.
Find the Best Lender for Your Situation - Be Flexible
If you’re a first-time homeowner, your first instinct might be to go to your own financial institution for your loan, especially if you’ve been with them for some time. However, builders typically work with preferred lenders because it helps keep their own costs down, passing the savings on to you.
You can then take the builder deal to your bank to see if they can match it, do better or advise. Remember, building a new home is the biggest investment many Americans make in their lifetime, so cutting costs where you can is a big deal.
While you’re at it, do your homework. Get multiple quotes from different institutions and get to know everything else you need to consider, such as interest rates and other types of fees that ultimately add to your cost.
Note: Freddie Mac reports that buyers who get an average of 3-5 quotes actually save at least $3,000.
Research, Research, Research
Speaking of doing your homework, it’s important to research your builder’s reputation online. Do they sell primarily to investors, or do they require that their homes are actually owner-occupied? This has implications for how often you might see your neighbors, so it’s good to know.
What incentives does this builder typically offer? Are people satisfied with these incentives, or do they wish they had bargained for something else? Get the details about that lender they want you to go with.
Just because you saved a few hundred dollars with that lender doesn’t mean you’re going to be satisfied over the lifetime of the loan. If you don’t understand a term or what the implications of certain deadlines are, ask!
Hire a Home Inspector
Yes, home inspections typically apply primarily to homes that are already built and lived in. However, when it comes to a new build a home inspector can put the stamp of approval that your home is safe, free from hidden hazards, and move-in ready.
This kind of peace of mind is absolutely priceless, and usually legally useful if your home was not built to certain standards. This way, you can have the builder make any repairs before you officially close on the home.
Remember, buying a brand-new home from a builder is a fantastic opportunity to express your creativity and provide your family with a lifetime of security, but you must be an active participant in the process. Ask good questions and know what you’re signing off on before you sign the contract. Make your realtor your partner in this adventure.
The more you know, the better protected you will be in the process and the happier you’ll be with your new home!