Shark Tips for Buying a New Construction Home from a Builder
Buying a new construction home can be an exciting journey—a blank canvas to create your dream lifestyle. However, it requires careful planning and attention to detail. To ensure a smooth and successful experience, here are expert tips on what to ask, what to look for, and how to protect yourself when purchasing a new construction home.
1. Research the Builder Thoroughly
Before committing to a new construction home, take time to investigate the builder’s reputation and track record.
Here are some important questions to ask:
- Can I visit completed homes or communities in the area?
- Is there an HOA or Metro District associated with the property? If so, what are the tax rates, and can I review the governing bylaws? Ensure you agree with the rules as they’re unlikely to change anytime soon!
- What warranties are included with the home?
- What amenities are planned or already constructed in the community?
- What’s considered a standard inclusion versus an upgrade?
- Are there incentives for using the builder’s preferred lender or other closing services like homeowners’ insurance or their title company?
- What are the financial triggers, such as earnest money deposits or design center fees?
- What is the policy for refunding money if I terminate or if the builder terminates the contract?
- Will the price increase if labor or material costs rise? What is the termination policy in such cases?
- Who will oversee the construction of my home, and what is their experience?
- What is the expected build schedule, and are any delays anticipated?
- What landscaping is included in the base package?
Checking online reviews, local testimonials, and visiting completed developments can provide valuable insights into the builder’s reliability and craftsmanship.
2. Understand All Costs
Builders often advertise a base price, but the final cost can escalate with upgrades and customizations.
To avoid surprises, ask:
- What is included in the base price?
- Are there additional fees for premium lots, upgrades, or custom features?
- What are the HOA fees and other community costs?
Review the list of standard features versus upgrades in detail. This clarity will help you budget effectively and avoid unexpected expenses.
3. Inspect the Model Home with a Critical Eye
Model homes are designed to impress but often feature numerous upgrades.
When touring, ask:
- Which features in the model home are upgrades versus standard?
- Can I see examples of homes with standard finishes?
- Pro tip: Look for craftsmanship issues in the model home. If the model isn’t perfect, it’s unlikely your home will be either.
Take detailed notes and photos, and compare the model’s finishes to what is included in the base price.
4. Always Get a Third-Party Inspection
Even brand-new homes can have issues. Hire a third-party inspector to identify potential problems before closing.
Key inspection points include:
- Foundation and structural integrity.
- Plumbing, electrical, and HVAC systems.
- Proper installation of windows, doors, and appliances.
Make sure the inspection is part of your contract and occurs before your final walkthrough. Always prioritize a full inspection before signing closing documents.
5. Review the Contract Carefully
Builder contracts are typically written in their favor, so it’s crucial to understand every detail and I mean WORD FOR WORD. Have a real estate attorney or experienced agent review the contract if there is something you don't understand.
Focus on:
- Warranty coverage and length.
- Timelines for construction and penalties for delays.
- Options for resolving disputes.
A knowledgeable real estate professional can help you negotiate more balanced terms and protect your interests.
6. Understand the Builder’s Timeline
Construction delays are common, but having a clear timeline can set realistic expectations.
Ask:
- What is the estimated completion date?
- What factors could cause delays?
- How will I receive updates on progress?
Getting a written timeline will help you plan your move-in date and minimize stress.
7. Protect Yourself Financially
While builders may encourage you to use their preferred lenders, it’s wise to compare mortgage terms.
Consider:
- Are there incentives for using the builder’s lender?
- What happens if I’m unable to secure financing?
- What is the policy for earnest money deposits?
Ensure any deposits are held in escrow and understand the conditions under which they are refundable.
8. Evaluate the Neighborhood and Amenities
A new home’s value is closely tied to its surroundings. Visit the community at different times of day to get a true feel for the area.
Consider:
- Proximity to schools, shops, and transportation.
- Planned amenities like parks, pools, or clubhouses.
- Future development plans that could impact your investment.
9. Plan for Post-Closing Support
Even after closing, issues can arise.
Make sure you’re prepared by asking:
- What is the process for addressing post-closing repairs?
- Who should I contact for warranty claims?
Document any issues during your final walkthrough and follow up promptly to resolve them.
10. Get The Shark on Your Side
While the builder’s sales agent represents the builder, a skilled real estate agent works for you and only YOU.
An agent can:
- Help you navigate and negotiate the contract
- Advocate for additional upgrades or incentives, not offered upfront to those without The Shark
- Ensure you’re getting the best value
- Help you navigate the inspection process, and negotiate repairs on your behalf
11. Get EVERYTHING in Writing
When dealing with a builder, it’s EXTREMELY important to document every conversation and agreement. Always follow up on in-person or phone discussions with an email summarizing the conversation. Ask the builder’s sales agent to confirm receipt and acknowledge that your recap is accurate. You can do this or your agent, but someone needs to do it!
Include key details such as:
- Agreed-upon pricing, timelines, and upgrades
- Clarifications on policies and procedures
- Any promises or verbal commitments made during discussions
Having everything in writing ensures clarity and protects you in case of disputes or misunderstandings.
12. Never Meet with the Builder Without Your Agent
Whether it’s an in-person meeting or a phone call, always have your agent involved. If a builder reaches out directly for a “friendly update,” politely ask them to hold on while you loop in your agent. Your agent acts as your advocate and ensures you’re fully protected during all interactions with the builder’s team.
Buying a new construction home is a significant investment, but with the right preparation and expert guidance, you can navigate the process confidently. Ready to take the next step? Let’s connect and make your dream home a reality!
- The Real Estate Shark
