5 Tips to Buying Construction
Buying new construction.
With our market having record low inventories many buyers, and maybe you, are looking to possibly buy new construction. It can be a great option, but with that there's a few things you want to make sure you know. So, I'm going to share with you five tips to buying new construction to make sure you have an awesome experience when you are ready to buy.
1. Get insider knowledge
First of all, don't go just running around looking at different builders' communities. When you think that you might be ready to buy new construction meet with your agent and get their insider information on the different builders that are in our area. There's local builders, there's regional builders, and of course there's national builders, as well. You want to know the insider information from your agent on what it's like to buy a home from these builders, and what their past client experiences have been. When you go to a builder's community and development, the builder will have real estate agents there that represent those people to talk to you. So, you're talking to the seller's agent in this case, and you don't want to do that. You want to make sure that you bring your agent with you when you go to where the community is, and that you sit down to get a kind of an overview of the different builders and the areas that they're building in right now with your agent before you even start looking. So, that's tip number one.
2. Get preapproved with their lender
Tip number two, expect to have to get preapproved with the builder's lender. They all have lenders that they work really closely with. They want to make sure that when you're preapproved that it's actually going to close, and you can expect them to require you to get preapproved with their lender even if you've already been preapproved. So just be ready for that hoop to jump through. It's not a big deal. It's just something you want to be aware of. You don't have to use their lender, you just have to get preapproved by their lender.
3. Builder contracts are different
Tip three, the builder contracts are different, in most cases, than a typical resale contract so that it's going to be a builder's contract. It's typically very much in favor of the builder, just so you know that. It's not really a neutral contract like a typical purchase and sale agreement, it's heavily in favor of the builder. It's going to have things like deadline dates, when the home's going to be done, the penalty if you don't close on time, things like that. So, make sure you review that very carefully with your real estate agent. Go back to tip one. This is why you have an agent representing you and not the builder. They're looking out for your interest. They need to explain to you the contract that you're going to be signing.
4. Understand the warranty, and warranty requirements
Tip number four, make sure you understand the warranty, and the warranty requirements, on the construction you're building. Every builder has different warranties. Some of them have amazing warranty reputations. Some of them have less than amazing reputations when it comes to their warranty. Ask your agent what their track record is with the warranties that they've seen with other clients and then also, of course, ask the builder when you get ready to go under contract. Make sure you know what the requirements are to sustain that warranty, as well. Sometimes there's going to be a 90-day or a six-month walk through that they have to do in order for you to still have the validity to that warranty.
5. Understand contingent purchase expectations
Tip number five is if you are buying and selling at the same time you're a contingent buyer. You need to make sure you understand exactly what the builder's going to be looking for. You can buy a new construction home contingent in most cases. It's totally up to the builder, of course, because they are the seller. They just want to make sure that you're going to get your home on the market quickly, generally within five days, and that you're going to be listing your house with an experienced listing agent. They want to make sure that that agent's going to have a track record getting your home sold. They're going to be able to manage the process for you. So, they're going to really want to vet your house, and the agent you list with.
So, there's my five tips for you on buying new construction. If you want my own personal insights on the different builders in this area, I know all the builders really, really well. I've got some great relationships with them. I'm happy to give you my insider tips. Just send me a message!