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New Construction Homes & Condos
Most homebuying advice is aimed at people who are buying an existing home. But what if you're in the market for a new construction house or condo? If you are in the market to purchase a newly built home this can provide some exciting options that may not be available to you when purchasing an existing home, such as the ability to choose the exact kitchen cabinets, flooring, and even floor plan you want.
While there are a number of good reasons to buy a new construction property particularly due to low inventory in the Atlanta housing market as well as throughout the nation, there are a number of things to know and do prior to house shopping.
Hire Your Own Real Estate Agent:
Builders usually have an onsite real estate agent in their communities overseeing and handling the sale of their homes, which means the agent works for the builder. Buying a house is the biggest financial purchase most consumers will make in their lifetime and therefore buyers should have their own representation to ensure their best interest is protected in the transaction.
Some new-home buyers think that if they do not use an agent for their purchase, the builder will reduce the price of the home by the amount of the commission. For the most part, this cannot be further from the truth. Builders do not want to reduce their prices because it sets the comparison price for future home sales in that neighborhood. Builders instead add the commissions paid to a buyer’s agent into the marketing budgets of the homes. If a buyer goes to a new home builder without a real estate agent, either the builder’s agent or the builder will pocket that money. Hiring a buyer’s agent is free so why not take advantage of their expertise.
Research The Builder:
Many home builders have been in the business for years and produce a quality product. However, some do not. Check review sites, state licensing boards and the local court records to see whether the builder you're considering has run into any trouble, including lawsuits, complaints with licensing agencies and disciplinary actions by state and local agencies.
When you hire us, we will research the builder on your behalf. We are familiar with a number of builders in the Metro Atlanta area and typically will already have the information necessary to make an informed decision about purchasing a home in the builder’s community. We also do an updated search to ensure the builder is still in good standing plus research all builders who we are not familiar with prior to showing or suggesting a property to our clients.
Get A Home Inspection:
You may think you don't need to have a newly built home inspected. But getting an independent inspection before closing is always a good idea, and you want to be there so you can learn more about the home. Newer homes can have just as many problems as older homes, and it's always better to know what you don't know before the closing. A good home inspector can help identify problems before a builder's warranty expires. Although most builders will do an inspection and allow you to attend, it’s best to still pay for your own independent inspection. We routinely set up independent inspections for our clients to ensure there are no major problems with the property.
Most builders offer warranties on materials and workmanship. For example, reputable builders usually offer a one-year warranty on workmanship, a two-year warranty on mechanical and electrical elements, five years on water leaks and 10 years on structure. Make sure you understand what is and isn't covered and what process you need to follow to get something fixed. Our agents make sure you read and understand the warranties being offered on the property.
Understand Your Floor Plan:
Most floor plans include room sizes, and if you don't understand those, take a measuring tape to your current home. Many builders offer virtual reality technology that lets you see what's going to be built, but a better option is to visit a home with the floor plan you want, even if it's still under construction or in a different community.
Builder List Prices:
Builders don’t like to reduce their prices. If they do, it sets a precedent for future home sales. Builders are more likely to pay for closing costs or offer design center incentives than to drop their prices. Builders are not like regular sellers. They are not emotionally attached to the property. They make decisions based on what is best for their bottom line.
Every day a builder has a home that is sitting on the market for sale, they are losing money. Our agents normally look for builder inventory homes that have been on the market for 45 days or more. These are the homes in which a buyer might be able to get good incentive offers.
Make Practical Decisions:
When buying new construction properties builders often include discounts, incentives, and bonus in addition to providing in-house services that buyers who purchase existing homes would normally have to obtain themselves. Knowing which services and perks to take them up on and what options to choose should be based on practical decision making. Below are a few examples of services and perks builders may offer.
Preferred Mortgage Lenders
Many builders have a preferred lender and you may be offered discounts and other incentives if you choose to go with their choice. This may or may not be best for you depending on your situation. When deciding on who you will select to finance your mortgage loan we always recommend getting quotes from at least three lenders then decide which is the best option for you. Selecting the right lender will affect your closing costs, how much you ultimately pay in monthly mortgage payments and the amount you will spend over the life of the loan. Choosing a lender with the best rates available is more important than opting to receive discounts and incentives if these perks are not connected to the loan. To learn more about mortgages, click here.
When selecting upgrades offered by the builder it is always wise to choose upgrades that will add the most value to the property. For example, if you're choosing between a fourth bedroom and granite countertops, you probably should choose the extra bedroom, which is much more expensive to add later and will add more value to the home than granite counter tops would.
Builders make good profit margins off of upgrades and they usually feature them in their model homes. When touring the model home, find out exactly what options are standard, what options are available, and, of course, what any additional options will cost. Each builder will have their own set of standard items that come with a house. A standard item for one builder might be an upgrade for another.
While there are a number of things to consider when buying a newly constructed home, nothing beats the feeling of being the first person to live in a newly-built home. Everything is pristine, clean, shiny and untouched allowing you to create a haven your own personal touch and design aesthetic.
We assist our clients with every aspect of buying a newly constructed place. To check out new communities in the Metro Atlanta area or ask questions contact us by clicking here.