What I Wish I Knew BEFORE Buying a New Construction House!
Hey everyone, welcome back! It’s your go-to real estate guide, Tim Trevathan from Tim Trevathan Homes and Virtual Properties Realty. Listen up because today, we’re diving deep into the world of new construction homes.
If you’re thinking about building your dream home from the ground up, or you’re ready to buy a new construction home in a brand-new community, don’t make any moves until you watch his video! I’m about to reveal what current homeowners say they wish they had known before buying a new construction home and to be honest, I was even surprised by some of the responses. So, strap in as we unpack these tips and steer your home-buying journey out of common and not-so-common traps.
Tip #1. Check the builder’s reputation.
Most home buyers don’t think to look into the builder’s reputation. It seems counterintuitive, right? Home builders are in the business of selling homes, and if they were bad at their jobs, that would be bad for business. But here’s the thing: not every builder is interested in providing a quality product, and unfortunately, some owners found out the hard way they were working with the wrong company, from shortcuts to charging premium prices for cheap materials. It never occurred to these homebuyers to check the reputation of the builder until they began experiencing problems with shoddy workmanship, slow response time to concerns, and, in some cases, an unwillingness to correct mistakes.
So, before signing any contracts, check online reviews, talk to previous clients, and have a lawyer and your agent (me!) review your contract before moving forward. Remember that sometimes your cheapest option isn’t always the best option and there will be a price to pay for working with the wrong company.
Tip #2. Choose the right location.
Now, you might be thinking, Tim, we know this already. We’re specifically looking at the areas where we want to live. What we’re talking about here goes beyond your initial considerations. For instance, you may not have or want children now, so schools are not a great concern, but what happens if your plans change? Will you have to move again to a better school district?
Another consideration about location that gets overlooked is the growth potential for the neighborhood you want to live in. Some locations appreciate better and faster than others. For the price you pay, you could see a 2% increase in home value or 12%. It all depends on your location.
The last thing I’ll add on the topic of location is to triple-check that the area meets your needs. Does your future home need to be in an area that is walkable or close enough to parks, shops, or community centers? Some homeowners didn’t think about these things until they had transportation issues. And in those brief moments between experiencing problems and getting them fixed, they realized, “Wow, everything is so far away.”
So remember, a great location not only enhances daily life but can significantly impact your property’s resale value down the line and accommodate the evolving needs of your lifestyle.
Okay, now, onto tip #3. The builder’s warranties.
Yes, we’re circling back to the builders. Understanding warranty limitations is crucial in avoiding unexpected repair costs post-move-in. Past homeowners have been slapped with surprise repairs, paying out of pocket because they hadn’t carefully read the builder’s warranty. Depending on what needs to be fixed or maintained, this type of oversight can result in needing a bigger budget to maintain the new home and drain savings.
But here’s what you can do:
Get a thorough inspection before closing so that anything that is covered by the builder’s warranty is identified. Also, know that you can negotiate warranty terms for extended coverage or specific inclusions to better meet your needs. The last thing I want to tell you is to keep very good records and documents of all repairs related to the builder’s warranty.
Tip #4: Get a copy of the Homeowners Association (HOA) bylaws and financial status before committing to a neighborhood. Believe it or not, some HOAs are carrying a huge debt, hoping to dig themselves out of the hole with an influx of new homeowners.
What does that mean for the homeowner?
When the financial health of the HOA is unstable, the HOA might struggle to maintain common areas or respond to emergencies, leading to potential service disruptions and higher future fees.
In addition to that, you’ll want to check the bylaws because some HOAs might impose restrictions that affect you personally, like having a no-pet policy, for instance. Even if you’re not a pet owner now, you may want one later. So make sure the bylaws are not restricting and give you room to evolve and grow according to your tastes.
The builder’s agent doesn’t typically volunteer this information, but if you ask, they will provide it to you freely.
Tip #5 Focus on upgrades that add value to your home.
New construction presents homebuyers with the amazing opportunity to choose the upgrades they want and even make design choices by room; however, it’s important to maintain some level of balance between preferences and what does well in the market. The trick here? Prioritize flexibility and timelessness over eccentric design and fleeting trends.
Examples of upgrades that don’t increase the value of the home are expensive landscaping, luxury finishes like heated floors, steam showers, built-in Jacuzzis, built-in bookshelves, media centers, or specialized storage solutions.
If you’re working with a builder who is designing a custom home, know that unconventional floor layouts or other choices that are specific to the homebuyer’s tastes may not, and usually do not, increase the resale value of the home. Sometimes, they make it harder to resell the home altogether.
So, where should you focus your attention?
The kitchen and the bathroom are always winners. Upgrades here should be functional rather than aesthetic and reasonably priced. And don’t overlook practicalities like choosing to add extra lighting, outlets, and even Ethernet ports to every room. As more homes are becoming smart homes, having these extra outlets means being able to enjoy the home in more ways than originally anticipated.
Tip #6 When it comes time to talk numbers with builders or lenders, remember – negotiation is part of the process! Whether it’s price points or upgrade packages, there’s often room to maneuver for mutually beneficial terms. Many homeowners regret not speaking up during the sales process after learning that fellow peers were able to get better package deals, additional upgrades, or sign-up incentives.
Just as an example, a previous client of mine had gotten a great deal on her first home, so I asked for the details, and this is what she said…
She got the builder to pay all the penalty fees she would experience if she broke her apartment lease, and this allowed her to move into the home sooner. But there’s more. You see, the builder was not willing to come down on the price of the home due to an appraisal that came in lower than her contracted purchase price, so she negotiated a deal where they paid down a portion of her interest rate, which resulted in a lower, much more affordable mortgage payment.
Now, I do have to say the story I just shared isn’t typical and is probably unlikely to happen in today’s market, but the point is, you won’t know what is possible unless you try. Do your research, find out where there is wiggle room, and you’ll get more out of your purchase than most people.
Tip#7 Still on the topic of negotiations, some homeowners wished they hadn’t settled for the builder’s preferred lender.
Not only is it okay for you to shop around, but it’s even better for you to walk into the builder’s office with your own financing in place. It gives you the ability to negotiate a better deal for yourself, and even if you got a good deal to begin with, it doesn’t hurt to see if the builder’s preferred lender is willing to beat it to earn our business.
So, overall, I would say don’t rush this part of the process. Starting on a foundation of independence is always a plus when choosing to buy a new construction home.
And now, onto my last tip, which is probably the most important of all tips…
Tip #8 Use independent inspectors during the pre-drywall home inspection, the post-drywall inspection, and before warranty expiration dates hit.
Inspectors are already trained to find the things that homeowners would not normally catch, plus they stay up-to-date on building codes and safety standards.
I’ve personally walked through a pre-drywall inspection with some of my clients and have been amazed at all of necessary fixes uncovered by third-party inspectors. What’s most alarming is that if no one catches these things, those imperfections will get concealed once the drywall goes up. These issues could also lead to unexpected repairs that have a way of resurfacing once the warranty period is over. And to bring everything full circle, it’s important to note that hiding imperfections in the construction of the home is especially common with builders that have a poor reputation.
So there you have it!
These eight essential tips are meant to spare you from the regret and frustration that can sometimes happen when purchasing a new construction home. Every decision, from picking your location to third-party inspections, plays a pivotal role in crafting a space that meets not only today’s desires but tomorrow’s needs as well.
And look, if any of this sounds overwhelming, rest easy. With careful planning and strategic decisions, building a new construction home can be an incredibly fulfilling venture—and I’m here to help guide you every step of the way.
If today’s insights have sparked more questions, or if you’re ready to dive into finding your dream home in Atlanta, don’t hesitate to reach out.
Remember to subscribe for more real estate wisdom, tailor-made for homeowners like you looking for their slice of paradise within Atlanta’s vibrant housing market.
Until next time: Happy House Hunting!
Tim Trevathan out!
