FAQs on New Construction Homes
I’ve really enjoyed spending a lot of the last couple of weeks with buyers comparing new construction homes. So I thought I would share 5 of the most FAQs I’ve received. I love hearing from you, so please keep them coming!
What is the biggest advantage of buying a new construction home?
Buying a newly constructed home offers many advantages. But the biggest advantage is the control and information it gives the buyer. Most people buy one or two homes in their life time. So I strongly recommend buyers “do their homework” and make calculated decisions no matter how old the house. Buying a new construction home can make that effort easier simply because a great deal more information is available than when buying an established home. For example, you can (and you should!) research the reputation of the builder and the quality of their work in the community right now. A great place to start is the Builders Association of South Central Kentucky at www.bascky.com and the Bowling Green-Warren County Contractors Licensing Board at www.bgky.org/contractorslicensing.
Building a home is a complicated process that involves a lot of different professionals. But even the most reputable builder may need to return to make corrections at some point. With new construction, you get a more accurate picture of the home’s history from the beginning.
Do I need a home inspection on a new construction home?
I recommend a home inspection because it’s an objective professional review of work performed on a house. I think it is particularly important to complete one on a new construction home when the history and reputation of the builder is unknown or receives mixed reviews. Again, building a house is a complicated process and people can make mistakes. Most of the time the inspection gives you confidence the home is well built and a good investment. But if there is a problem, you want to know about it before you close. The inspector works for you the buyer. So you can and should ask the inspector to show and explain any problems or concerns to you. Most importantly, you have the option to negotiate cost and completion of corrections, if any, before you close. That way you know the history of the house from day one and have confidence that you and your home are off to a great start.
Do I still need to do a final walk through even if I had a homes inspection completed?
Yes! Buyers are always provided and encouraged to complete a final walk-through prior to closing regardless of a home’s age. Even if you had a home inspection, you still want to complete the final walk through and discuss areas that require additional attention. Accidents can and do happen in the final days before closing. With a new construction, odds are all will be fine. But it is a final opportunity to make sure all is as it should be before moving in.
What’s covered in a New Construction Home Warranty?
Typically builders provide a new construction home warranty, and some builders also have a third party involved in the warranty of the house. However, coverage for new construction is different from one builder to the next. You need to properly understand what is covered by the builder or other companies involved in the creation of the house. If a warranty is not mentioned or listed, ask about it. Never assume it is included. Sometimes you can negotiate the warranty into the deal or add provisions to cover things the warranty may not normally cover. That first year will go by faster than you think. So don’t be shy! Ask questions and know what’s covered. In the end, you want as much coverage as you can get.
Do I still need a Real Estate Agent if I am buying a new construction home?
Yes! Having a real estate professional or “Buyer’s Agent” on your side to walk you through the process (and all these questions!) is incredibly important. A Buyer’s Agent knows what questions to ask and what answers are appropriate in their market. They also coordinate inspections, corrections and details, as needed. They work for you and negotiate the best possible deal you can get for your budget.
A professional advocate for my clients, I always look for ways to make the deal (and life after the closing) better. You will be in the real estate market only a short period of time. I’m in it all the time. I think of things you likely won’t and have the time, experience and quick access to industry professionals to do the important “homework” I keep talking about. And remember! Commission for those professional services is generally incorporated in the purchase price.
Buying a new construction home can be a perfect solution and one of the best financial decisions you can make. Just remember to stay focused on your needs list and budget, ask questions as you have them and listen to the recommendations of your real estate professional before making decisions. New or old, buying a home is a huge decision that is best made without taking shortcuts.