New doesn’t equal perfect! Buying new construction has benefits like smarter technology, energy-efficiency, modern design, and maybe best of all – moving into a pristine, clean home! While it is easy to get wrapped up in the excitement of selections and color schemes, it is extremely important to stay focused on your budget and timeline. Hidden costs could be an unpleasant surprise at the end, putting a damper on your experience and bank account.
4 Costly New Construction Mistakes
1. Not Having Your Own Representation
What might seem like a sensible solution using the on-site agent, could actually be the biggest financial mistake you make during your build. Why? Because the on-site agent represents the builder, not you. Your investment is best served by having your own advocate to help with research, negotiations, contract protections, deposits, and mitigate any situations that may arise.
2. Not Having Your Own Inspection
Having your own independent inspector can provide reassurance your home is truly free of any defects and safely constructed. It is advised to have your new build inspected prior to sheetrock installment and once again prior to closing. A good builder uses quality subcontractors and avoids cutting corners to deliver a well-built home to their customers.
“A good framing crew can produce a work of art”.John Battaglia, Owner & Code Certified Master Inspector of At Ease Inspections
With hundreds of home inspections across the metro area, John’s insight on common defects and code violations further validates the need for an inspection prior to closing, saving many new owners from blind defects.
3. Not Comparing Lenders
It may seem like an added benefit to use the builder’s preferred lender which offers incentives but what price are you paying to receive those incentives? Have you compared discount points, fees, and interest rate? Whether new construction or a resale, shopping your options will save money by finding the best interest rate and mortgage fees in your area. Most lenders are competitive and want to earn your business. A lower interest rate could be a wiser long term investment as opposed to opting for upfront incentives offered by the builder’s preferred lender.
4. Not Understanding Builder Pricing & Warranty
Pricing varies between the builder’s standard base model and upgrades. More than likely, the model home you visited was upgraded with all the bells and whistles. Be sure you have a clear vision of the standard base model and pricing. Every upgrade comes at a price and should be in writing if you are making any adjustments to the original agreement. When you sign the original agreement, the builder’s warranty should be included in the terms and conditions. Different timeframes typically apply to systems and structure coverage. Read thoroughly and make sure you have a clear understanding before committing to the agreement.
Bonus Tip: Get Everything in Writing
- Original Agreement with Pricing
- Choices/Selections with Pricing
- Upgrades with Pricing
- All Deposits
- Changes in Timeline
- Builder’s Warranty