Useful Tips on Buying a Newly Constructed Home – Successfully!

You may think that buying a home is tough. Well, buying a newly constructed home is even more challenging. It is so unlike purchasing a previously owned home. But, if you are in the market to buy a newly constructed home, being familiar with a few tricks of the trade might help you figure out the process a bit better. Take a look at some of these valuable tips on buying a newly constructed home successfully!

Using Your Own Agent

It might be tempting to go solo and do this on your own, but you must invest in a broker/agent so that you get what you want. Similarly, you must not opt for a broker you find within the new construction community because they likely represent the seller, builder, developers, or corporate owners. They represent them and not you. They are an extension of the seller. You want the best out of the deal, but from your perspective and having your broker/agent will assure you of zero conflict of interest. 

Don’t Expect Prices to Drop

Price reductions do indeed tend to happen sometimes, but the builder establishes the market price of their product with an expected profit margin. It is typical for pre-sale homes to be higher in value because they will be designed with all the necessary specifications to appeal to potential buyers that won’t have to spend on upgrades. However, buyers would have to spend on renovations and upgrades to buy an older home. 

Builder Concessions and Additional Upgrades

Instead of expecting the prices to go down, what you can do is ask the builder to give you a few upgrades either at no cost or for a discounted price. This could include upgraded carpeting, landscaping, fencing, or adding additional appliances without you having to pay extra for them. 

Builder Incentives Like Interest Rates

Several new construction communities will try to entice you with low-interest rates for financing and zero closing costs. But who pays for that? It most certainly is not the builder who does, nor do they ever plan to. It is your builder’s preferred lender that is offering these low rates and financing options to make up for it all by offering an insane number of loans through the builder’s project. 

 

Your builder, as such, will only offer you that particular incentive if you choose their preferred lender, but you can obtain financing from your lender as well. You can contact them and ask them to match the offer. It always helps to shop around as they might even offer you a better rate to keep your business. 

The Builder Addendum

The contracts used by builders differ slightly from those used by brokers and agents. The difference is that the builder contract will contact a lengthy addendum to the usual purchase forms. They are language-specific and can run long. Most of these terms will not make sense to the average person, which is why you must have your broker/agent review this contract thoroughly before you sign anything. 

The Floor Plan vs. The Actual Floor Plan 

The floor plan that you see when choosing floors and directions of the condo or house might differ from what you get. It helps to be prepared because a lot of what you see, such as the oval bathtub with rounded edges, is just there to add visual appeal, and the real thing may be a rectangular bathtub. 

 

With these helpful tips, you will be able to buy a newly constructed home in no time!