Walking into a new house can draw a similar reaction to the new car smell. It’s fresh, it’s clean, and it’s yours. No one has taken a bath in the bathtub before. No one has walked barefoot on the carpets. No one has painstakingly chosen paint colors or chosen landscaping. You get to choose everything.
There are a few things to keep in mind to make sure that your new home buying experience is a great one.
First, before you start seriously looking, get pre-approved for a loan. This will tell you how much the lender thinks you can afford and will be a good benchmark against the builder’s lender. Think about how the payment at different interest rates will impact your lifestyle.
It’s easy to be seduced by a beautiful home that is not in your budget, model homes are set up to be appealing, while the sales people are always convincing when they tell you that you and the house are made for each other! Having a realtor represent you with the builder is good advice and will help make sure you get the best deal possible. A realtor can represent your interests at no cost to you, because the builder pays the fees.
Before committing to buy the property, it’s a great idea to get a few good faith estimates (GFE’s) of the mortgage costs, including the APR (annual percentage rate), as well as the terms. Builders usually offer financing that might at first glance appear to be the best deal, but having some other lenders lined up for comparison might reveal hidden fees and give you some negotiating power.
Though the model home may look flawless, it is a good idea to ask the neighbors about their experiences with the builder. It’s important to know what kind of problems they’ve had and even more important to know how the builder has responded and how long it took them to respond. If you see too many red flags, it’s time to reconsider.
Once you’ve made an offer on the house, make sure to pay for a home inspection from an independent firm. Just because the home is new doesn’t mean it’s perfect. The builder may say he will stand behind certain types of problems that come up in the first year, but an inspection will bring them to light. Fifty percent of new home inspections uncover a flaw in design, materials, or workmanship, which could prove costly to the homeowner later on.
Before you close on the home, walk through the home with the builder and develop a punch list of problems that need to be fixed. The builder will mark these items with tape so that his crew will know what to fix. Once the repairs are complete, it’s a good idea to have another walk through. The builder may pressure you to close before everything is fixed but once you’ve closed, you lose leverage, so don’t give in.
If you have any questions about real estate, feel free to contact us. We are here to help you find your dream home and will guide you every step of the way!