Keller Williams Realty
https://www.buyhomesincharleston.com/blog/top-ten-tips-for-understanding-new-construction-contracts
Top Ten Tips for Buying New Construction Homes
Posted By: Cynthia Partrick In: New ConstructionDate: Wed, Feb 5th 2020 4:05 pm
TOP TEN TIPS FOR BUYING NEW CONSTRUCTION HOMES
by Cynthia S. Partrick, Buyer's Specialist, The Alan Donald Team
1. Get pre-approved by a lender BEFORE looking at homes. A Buyer’s Agent can help you shop rates and products that may be better than the builder’s preferred lender.
2. Check out the builder's reputation online. Most large builders will have both positive and negative articles about them, but make sure none of those are related to the particular community you are interested in.
3. A Buyer's Agent can show you options BEYOND what one particular builder has to offer in a community (including resales, to-be-built and "spec" homes from competing builders in the same area, special incentives, etc.). It is important to hire an agent who is experienced selling both new construction and pre-owned homes, so that they can provide advice on which design options to choose that are desirable for resale purposes.
4. When checking in at a new construction community, always bring your Buyer’s Agent business card (if you are not together) or make it known to the sales representative who your agent is. Once you commit to a lot or sign a contract without an agent, you may be deemed to be unrepresented.
5. Contrary to what many Buyers may believe, reputable builders will not give you a better deal for not being represented by a Buyer's Agent. Builders' prices include the full commission built in as a marketing cost, and they will not negotiate on "to-be-built" home base prices (because they need to maintain the value for all their future sales without affecting future appraisal values).
6. Many builders will condition the payment of Buyer's closing costs or other financial incentives to using their “preferred attorney and lender”. While this option may make the most sense for the Buyer, there is no obligation to use the builder's preferred vendors. You are free to use any lender and are well advised to shop around for the best mortgage loan.
7. Expect to pay more than the advertised base price.You will need to add the lot premium and any structural or cosmetic upgrades you choose (beyond what the "Standard Features" offer). It is not uncommon for Buyers to spend 15-25% on top of the base price to get the lot and “the goodies” they want. Your Buyer's Agent can provide advice on which upgrades are priced well, which are good for resale and/or which ones you may be able to do later on for less money.
8. We recommend hiring a licensed and experienced home inspector to conduct pre-dry wall and final inspections - to make sure that the builder did not cut any corners and that you are not getting a “lemon” regardless of the assurances the builder may give you about them having their own inspections done, or the fact that the home may have passed all the official city/county inspections.
9. The building process can often take 6-7 months, but it could take longer than expected, depending on weather and approval factors. If you are not living locally, your Buyer's Agent will serve as your eyes and ears on the ground, to keep you informed.
10. Do not rely on any verbal promises from any of the builder's representatives. Any change to the contract or promise from any representative from the builder needs to have a written contract addendum signed by both parties. Verbal agreements or commitments are not enforceable in South Carolina.
If you or someone you know is interested in building a new home, or purchasing new construction, we would welcome the opportunity to assist you and make sure that you are well represented and informed throughout the process!
Call or text us at (843) 900-0155 to start the conversation!