Read This Before Visiting Your First Model
Most homes on the market are resale, yet one of four home buyers purchase a new home. Both
new builds and resale have their advantages, but before you make a decision let’s compare the two:
- Offer customizable use of space and style
- More Energy Efficient than older homes
- Choice of options and upgrades
- Everything is new and modern
Versus Resale Properties:
- Less expensive on average
- Often have neighborhoods with fully finished / mature landscaping
- Homes (foundation, etc.) have already settled, which eliminates potential structural problems in the future.
There are advantages and disadvantages to both, but it’s important to consider every aspect of a new build before deciding it’s right for you. Here are 10 ways you can save time and money before viewing
your first model home!
Call Your Agent!
Sit down with your agent and discuss all possible options when it comes to buying a new build. Do some
homework on prices for new builds in your area, so you can determine a comfortable price range. Your
agent can also help you understand your net proceeds from your current homes’ sale, so you know how
much cash you’ll have available. If you’re a first time buyer, qualify your income and figure out how
much you can put down on a new property. After this, work out your monthly debt load so you can
determine a comfortable price range.
Seller Agent or Buyer Agent?
It’s important to know the sales agents in the model home represent the builders’ best interest, not
yours – They are known as “seller’s agents”. As a buyer, you can also enlist your own agent, who will
represent your best interests and be knowledgeable about home construction, warranties, financing,
pricing differences, quality, and even lot selection so you get exactly what you need.
Builder? What Kind?
There are builders who vary in their skills. Some specialize in craftsmanship, some offer below-market
financing, those who are customer attentive before and after the build is complete, and those who are
innovating with spacing. Figure out what you need from a house and what you want, and show around
for a builder who can meet both!
Know Your Builder Before making a final decision on model or builder, it’s important to get as many facts as possible about your builder. Knowing their reputation and financial strength will help your build go smoothly. Get “spec sheets” on home features that covers everything from warranty, energy efficiency, lot availability, and delivery of your home! Knowing this information will help you keep track of what you’re getting out of the build and what you still need to know.
Is this the right neighbourhood? When choosing a new build over a resale property, there are a lot of things up in the air. For one, the community surrounding the build. What amenities do they offer? Is there a financial reserve to build / replace any major amenities like schools or community roads? Knowing if these features will eventually be offered on-site, or if you have to go elsewhere will play a large factor in the enjoyment of your neighbourhood. If there is a homeowner’s association, make sure to review any rules, or find out if a homeowner’s association will be set up. Thinking about your commute times is also crucial when picking a neighbourhood. A 35-minute drive might not seem like a lot but doing it twice a day everyday may be more than you can handle.
Options and Upgrades When the base price is less expensive, you can put more money into the upgrades you want! These options are installed while the builder is constructing the property, like a sunroom or extra powder room. These can add the most vale to the resale of the property, so it’s important to choose them wisely. Upgrading means selecting quality above the “builder standard”. This could refer to carpeting, vinyl, ceramics, detailing, kitchen fixtures, and appliances. Be sure to check for any free upgrades or offers from your builder. Remember: you can add things like a deck, finished basement, and landscaping later and sometimes for less money!
Negotiations Sometimes there are opportunities to negotiate price, upgrades, and options. If you view a new build that has been completed but hasn’t sold – there is room to negotiate. “Premium lots” are also priced higher and are sometimes saved to be sold last, but all lots typically cost the builder the same, so inquire about how they price their models. Builders may also offer discounts or financing to close a deal.
Read Your Contract When reading over your contract, make sure you take precautions to protect yourself and write them into the agreement. This could include:
- A 30-Day Notice of The Closing Date
- Allowing Access During Construction to Check Progress
- Placing Your Deposit in Escrow
- Detailing Your Upgrades
- Explanation of The Fine Print For The Warranty Of The Builder And Manufacturer
Financing – What Works for You Some builders have special financing packages when they are in high-volume communities or have a large number of loans. “Home loans” are very competitive these days, so shop around for your loans to see what rate is right for you. You have many financing choices other than those being offered by the builder, rates and lender fees, appraisals, inspections, surveys, attorneys, and closing fees should all be taken into consideration while you look.
New Doesn’t Mean Perfect Consider hiring a reputable home inspector. Even though new homes are normally built with durable materials and built to last longer, that doesn’t mean the builder won’t make mistakes. After you find your inspector, create a “to-do” list for your builder and address those problems before closing. Having a real estate agent you can trust can help you sort through all these tips quickly and effectively while looking out for your best interest!
Immediate Delivery Homes: What to Know Homes available for immediate delivery (move-in within 30 days or less) are available for a variety of reasons. If the community is nearly done, the builder may continue to make “spec” homes on the last available lots. The model home could also be available for a quick sale if all other units have sold. Sometimes the contract on a home has fallen through too, which means you can get their upgrades for a lower bottom dollar! Sometimes builders also have immediate delivery homes available for relocation buyers who need a home quickly. In any sense, when looking at a home that has immediate delivery, try to negotiate with your realtor and see what other goodies you can get included! If you’re not sure about the time a new build takes, an immediate delivery home may be a good option for you.