You’ve set a budget for a new house, and you have been preapproved for a mortgage, now it’s time to start looking around! But, what if you have your heart set on a brand-new home instead of a pre-owned property?
What You Need to Know Before You Buy a house
Buying a new home brings a range of issues compared to buying a pre-owned home. You will have access to more information on the building materials than a subsequent buyer, but, if the home is in a new neighborhood, how will the area look once building is completed? Will the area, and the home, include all the features you have been promised?
If you are still dead-set on a brand-new home, here are a few tips to help you make a smart purchase.
- Additional Financing Options
Builders tend to work with banks which often leads to financing options. You’re still going to want to get prequalified with a lender of your choice before you start shopping for a house, but it’s a good idea to weigh up your options. You may even be able to use the offer of builder financing to secure a better deal with your preferred lender.
- It’s Easier to Customize
You may have the final say on the new features in your new home. With a pre-owned house, alterations are usually negotiated with the seller, which can be uncomfortable. With a new house, the materials and labor are still on site, and most builders are flexible and offer a range of options for things like flooring, paint, and appliances.
- Read the Warranty
A warranty usually means that the builder will return to fix problems, which you won’t have if you buy a pre-owned home. Find out what the warranty covers, the remedies on offer, and how long it is valid for.
- Check the Contract for an Arbitration Clause
Some builders will include an arbitration clause in their contract, wherein buyers give up the right to file a lawsuit and have to instead use a dispute resolution process as designated by the builder. While arbitration is a quick and affordable way to solve issues, it depends on how things are handled. Be sure to check the track record of the arbitrator if one is specified and ensure you can seek arbitration in your own state or city.
If you are buying in a community that is set to be built around specific amenities, such as a tennis court, golf course, or pool, that’s a big part of the value of your purchase. If the amenities have yet to be built, there is always the risk of the developer running out of money. However, some municipalities require that builders post bond for future shared amenities and you can find out if this has been done by talking to the local building department, a lawyer, or an agent.
If you are considering purchasing a new build, use these tips to guide your decision.
< Hgtv. HGTV, HGTV, 27 Aug. 2015, www.hgtv.com/design/decorating/clean-and-organize/10-best-kept-secrets-for-buying-a-home. Zillow, Inc. “The Home Buying Process- Step by Step.” Zillow, www.zillow.com/wikipages/the-home-buying-process–step-by-step/. >