Buying a new home is always a challenge, but purchasing a new construction home presents its own unique challenges. New construction homes are purchased before the house is built, giving the new homeowners full control over what their new home will look like. While this is an ideal situation for many, there are a few things buyers should be aware of before they sign.
Don’t Do It Alone: Always make sure you have your own agent, instead of relying on the developers to provide one. Dual agents are limited in what they can do by state laws, and it will benefit you in the long run to have an agent who is solely responsible to you. It is also a good idea to have a real estate attorney on retainer to review all contracts drawn up over the course of negotiations. Developers will take advantage of your ignorance, and will always write contracts that benefit them.
Calculate Property Taxes: Since new construction homes are bought before they are built, it can be easy for developers to underestimate how much you will pay in property taxes. Doing your own calculations will make keep you informed and avoid any nasty surprises.
Plan on Paying for all Upgrades in Advance: Almost all developers will make you pay for any upgrades, like countertops or cabinets, upfront. This is to ensure that the developer doesn’t lose money by installing more expensive accessories, only for the buyer to terminate or demand that they be changed after the fact.
Don’t Underestimate the Risk: There is an inherent risk in buying into a project before it has started. Do your research to make sure that the developer has a proven track record of completing projects on time and has gotten the green light from local building authorities.
Buying a home pre-construction can be a great value. Do the necessary research a prepare in advance to make sure the process is as smooth as possible.