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Flash report: Builders of Condominiums, Townhomes,
Patio Homes, and Single Family Detached Homes are offering incentives of $50,000
on some of their homes. Call Ron at 303-369-8877 to find out where the
real deals are! |
10 Secrets Every Home
Buyer Should Know About Purchasing a New Home from a Builder
| 1.
First, visit with your real estate agent. |
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Before you step into
a model home, know how much house you can afford. If you currently own a
home, you will probably need to know the net proceeds from its sale to
calculate how much cash you'll have available. Your real estate agent can
analyze this to narrow down what that net proceed figure is likely to be.
If you are a first-time buyer, you should seriously consider becoming
pre-approved for a mortgage loan to nail down how much of a home you can
afford and improve your bargaining position with any seller. |
| 2.
Put experience on your side. |
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Remember that the
sales agent in a model home represents the builder, not you. If you don't
have a professional real estate agent working on your side, you are not
being represented. Your real estate agent can help you to understand new
home construction, warranties, financing, and differences in price,
quality, and lot selection to help you obtain the best value. |
| 3. Not
all builders are created equal. |
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Some builders are
known for their craftsmanship, while others are known for innovative use
of space, below-market financing, or exceptional customer service during
construction and after move-in. Your real estate agent, who makes a
profession of real estate, can help you find the best home for your needs. |
| 4. Get
the whole story. |
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Investigate the
reputation and financial strength of the builder. Be sure to obtain
"spec sheets" that cover the home features, which can cover
everything from floor plans to energy efficient ratings, and from
immediate-delivery inventory to lot availability. |
| 5.
Look "under the hood". |
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Learn all you can
about the community. Review the common amenities. Find out from local land
use officials what else is planned or could be built in the area,
especially where there's vacant land. Read the rules of the homeowner's
association - or determine whether one will be set up - and investigate
whether it has adequate reserves set aside to build or replace major
amenities such as pools or major roads. Consider commuting routes and
times. |
| 6.
Choose your options carefully. |
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The higher the base
price of the house, the more options and upgrades you can add without
overpricing for the neighborhood. Make the most of builder incentives,
typically free upgrades or credit off the purchase price. Upgrading means
selecting quality above "builder standard" for carpet, floor
coverings, detailing, appliances, and kitchen fixtures. Options are items
that the builder installs while constructing the house. Options that add
usable space, such as a sunroom or a computer room, add most to resale
value. Remember that some improvements can be added later and sometimes
for less money, such as a deck, finished basement, or landscaping. |
| 7.
Negotiate with the builder. |
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Many buyers don't
realize that there may be room for negotiating price, upgrades, or
options. You may have the most possible room for negotiation if the
builder has a completed but unsold home. Unless you are buying in a
"seller's market", builders may offer discounts or special
financing to help close a sale. |
| 8.
Make sure the contract works for you. |
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Be certain that the
agreement with the builder includes some safeguards for you, such as
putting your deposit in escrow, itemizing your upgrades by description and
cost, allowing you access to the site to check on construction progress, a
weekly schedule of appointments to meet with the builder, and a 30-day
advance notice of the closing date.
Also be aware than
in many states, new home construction contracts are NOT regulated by your
state Real Estate Commission. The contract is typically written to favor
the builder.
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| 9.
Financing can make or break you. |
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Some builders,
especially those in high-volume communities that place many mortgage
loans, offer special financing packages. It is customary for the builder
to tie upgrade incentives to an in-house mortgage company, so the builder
may not offer those incentives unless the buyer is willing to use the
in-house mortgage company. But using the builder's financing is not the
only option in the highly competitive world of mortgage lending. You
should shop everything, including interest rates, points, and lender fees. |
| 10.
New doesn't mean perfect. |
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New homebuilders
typically use modern materials that are durable, low maintenance,
stronger, quieter, safer, and even wired for the next century. But new
doesn't mean perfect. Your contract should provide for the option of
hiring a home inspector. You and your real estate professional should
prepare a list of items for the inspector to pay particular attention to,
and you should accompany the inspector during the inspection. Use what you
learn from the inspection to create a builder "punch list" to
fix major problems before closing.
Those who brave it
alone may not realize that there is usually no out of pocket cost to the
buyer for this necessary representation!
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