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How To Save Money When Buying New Construction

 

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How To Save Money When Buying New Construction

May 11, 2020

If you are looking to buy a new home, you undoubtedly know that there are a multitude of options out there.  Some people want to get started with a fixer-upper, others want a home that is move-in ready.  If you happen to be a home buyer looking to move into a brand-new home, you will find that new construction will carry a higher cost than most of your other options.  But like with everything else, if you arm yourself with the right questions to ask and know what to look for, you just might succeed in finding the right new construction home for the right price.

Below we touch on topics to discuss with builders when looking for your dream home.

  1. When looking at the price of the “home”, determine if the cost of the lot it sits on is included.  Often times, prospective buyers will find a home they are interested in and believe they can afford, only to find out the price listed is the base price of the house itself, and does not include the land it sits on.
  2. Ask the builder if they offer incentives for using a preferred mortgage lender and title company. While many builders will not negotiate the price of the home, you might find that they offer incentives, such as a discounted rate on closing costs or upgrades to the finishing touches of the home.  Even if incentives are offered, you should still do your due diligence and shop around with difference brokers to be sure you are getting the best rates and best deal in the end.new construction
  3. Find out what the standard features are that are included in the advertised price of the home, and how much more can you expect to pay for upgrades? The model homes that people look at are generally built with the upgrades come at a higher cost, such as hard wood flooring and granite countertops.  Find out before you move forward and fall in love with the home and the price of the home if the cost still fits in your budget with these upgrades features.  On top of the features that are included, be sure to determine if you are responsible for bringing in your own appliances or if you are given an allowance when choosing your own appliances.
  4. Be sure to determine what type of warranty is offered with the home. Make sure the warranty specifies exactly what is covered and for how long.
  5. Depending on the type of development, you might be responsible for paying Home Owner’s Association (HOA) fees. Find out if this is the case when speaking to the developer so you can accurately budget your monthly/quarterly/yearly expenses accurately.
  6. Along with the cost of HOA fees, if you are buying a home run by an HOA, make yourself aware of the rules and regulations that you will need to follow. You might find you can not have a shed on your property or you are restricted to certain colors for the outside of your home.
  7. Find out how long you need to expect the home building process to take. This is especially important if you need to sell your existing home first, or if you are moving to a new area and might need to rent a place while your home is being finished.

Buying any type of new home under any circumstances can be a confusing and overwhelming process, but if you have your heart set on building a new home, you need to know what to expect and what to look out for from the very start of the process.  While a real estate agent might be able to point you in the right direction and get your started, you should really have an attorney go through the contract before moving forward with a builder.  Arming yourself with knowledge and having clear expectations will help to ensure you end up with your dream home in the end.

 

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