Question: Libby, we’re thinking of buying a new home from a builder rather than buying a resale home. Do you have any advice about that? Answered by Libby Guthrie
Hi, I’m Libby Guthrie with Keller Williams Realty in Northern California. Today we’re going to talk about things to consider when you’re buying brand new construction homes. At the end of this video, you can request our Home Buyer’s Guide and we’ll be happy to send that to you.
One of the first things to consider is to make sure that your real estate agent will be accompanying you to the builder’s site and register you on at least your first visit.
That way your local real estate agent can help guide you, and understand exactly what you’re purchasing. Be prepared to ask a lot of questions. When you first walk into the builder’s model homes, you get this wow factor because they have all the bells and whistles there and you’re just a little bit overwhelmed and you don’t understand exactly what you’re getting into.
Also, the prices that they’re quoting you usually are just the base prices. They don’t include the upgrades. Find out what their standard features are in their homes and exactly what the upgrades are and how much those upgrades would cost you, approximately.
Did the standard features include window coverings? All the appliances, including washer, dryer, refrigerator? Are you going to be responsible for that or are you going to be responsible for any of the landscaping? You want to factor those items in so you’re, you understand and he can budget for them in case you are responsible for them.
I have had clients discover that, yeah, they’ll go ahead and go with the standard features, for example, for the flooring that the builder offers, but they will budget for replacing that flooring once they get possession of the home and move in. So look at all those costs and see if that’s something that you’re going to be interested in or you want to wait until you move in and be changing that at that time.
Another question for you and or your real estate agent to ask, is there going to be any special assessments in that community that will, that will show up on your tax roll? Or will there be a homeowners association (HOA) fee? What are those fees? What do they cover? Will those fees go up as other amenities are built out in the community?
Find out those things before you purchase. Think ahead for when you’re going to sell the home, will those special assessments affect the sale of your home and or would the homeowners association fees affect the sale of your home?
Find out what the longterm plans are for that neighborhood. How many homes is that builder going to be building? Are there going to be other builders building in an in or around that area? Well, there’ll be other construction sites going on such as schools or shopping centers or maybe main roads going through there. You want to make sure you understand and you’re comfortable with that before you purchase.
Keep in mind that you will have some neighborhood noise going on during the construction time after you move in and you may have to put up with that for a while. So, make sure you’re comfortable with knowing that that builder’s going to be there for a while, building in and around that area.
If there’s already people living in the neighborhood, you may want to drive through the neighborhood different times of the day. Get out and speak to those people and ask them what they like about the neighborhood and what they dislike about the neighborhood.
Ask for and receive a copy of the covenants, conditions, and restrictions of the neighborhood. That’s what we call the CC&Rs. Even if you’re not in a homeowners association, there may be rules and regulations regarding, for example, parking a boat in the driveway. Parking a recreational vehicle in the driveway or parking in front of your house, or even behind the fence.
There may be some restrictions regarding your landscaping that you have to adhere to their rules and regulations regarding that. Even down the road, you may think about painting the exterior of your home, but there may be rules and regulations regarding the colors that you can choose.
Most of the big home builders provide the front yard landscaping for you when they build the home. A lot of them do not provide the rear landscaping. Some of them may require though that you put in rear landscaping within a certain amount of time after you move in. If that’s the case, you want a budget for that and know what you’re dealing with. And so you might want to think about the big yard. Are you going to have to landscape all that yard in the back? And it might be expensive for you.
Find out what the builder warranties are. Most states require that the builders give you a 10-year warranty, for example, on the roof or structural components of the home. Usually, you get a one year warranty for workmanship and or appliances in the home. Think about possibly, obtaining your own home warranty that would cost you maybe about $300 to $600, depending on the size of the home.
Have you or your real estate agent ask about the builder incentives. Sometimes if you agree to use the builder’s preferred lender and the builder’s preferred title and escrow company in Northern California, for example, they are offering some kind of builder incentives and that would help you with some of your closing costs.
Usually, the big home builders nationally don’t negotiate so much on the price of the home, but they will possibly negotiate regarding some incentives, especially if they’re closing out a particular phase or it’s close to the end of the year or the end of their fiscal year. You may find that some private builders do negotiate on pricing.
One of the other big questions is how long is it going to take for the builder to build your home so that you can plan on when you’re going to be moving in. Some of the builders already have prebuilt homes that you can look at and go ahead and buy that one. But if you don’t like that home and you want to wait to, to purchase your brand new home and have the upgrades that you want in your home, then you want to find out how long that is going to take.
Of course, a lot of the builders do not have control over the weather, and sometimes they’re, they’re workers. You know, or not available for certain phases of the building process. So just be aware that there are some things that are out of their control and they try to give you an estimated timeframe and you’ll just need to work around that.
It can be very exciting buying a brand new home. And, I’ve had a lot of clients that have bought brand new homes. They’ve moved in, they’ve made lasting friendships with the other new home buyers. They’ve watched their kids grow up in that neighborhood and they’ve watched their neighbor’s kids grow up. And it’s something that can be very, very exciting.
So if you have any questions regarding real estate in general, I’d be happy to help you out. My number’s 925-628-2436 and I’m located in Northern California. But if you’re looking to buy somewhere else or sell, I do have contacts all over the country that I can refer you to.
Don’t forget to request the Home Buying Guide at the end of this video. Thanks.