The Type of Home for You
Traditionally, there are two types of new homes: finished and customizable.
A finished home is one that’s move-in-ready. The builder has chosen all of the fixtures and amenities, but no one has lived in the home before you.
A customizable home, by contrast, is one that has been built, but is not completely finished. You are often able to choose your own fixtures and features—everything from carpet and countertops to lighting, cabinets, and paint colors. This can be a lot of fun, especially for people who are very choosy about their décor, but it can also end up being a price trap.
With a home that’s completely finished and move-in-ready, the price will have been set by the builder and you will make an offer based on that price. With a home that still needs to be customized, you can find yourself spending more than you bargained for if you aren’t careful. Sometimes builders will have a “base” price that estimates the cost based on bottom-of-the-line flooring, cabinets, fixtures, etc.
If you choose granite countertops while the base price assumed laminate, or ceramic tile rather than vinyl, you can see the price of your new home soar. Make sure you sit down with the builder and discuss your preferences and get a firm estimate of what the ultimate price with all of your upgrades will be.
Another issue that people often overlook is the need for everyday necessities. When you move into a home that was lived in before, all of the little daily needs will be taken care of already. However, when you move into a brand new home, you may find that you need to spend extra money on light bulbs, shower curtains, towel bars, shelf paper, and curtains or blinds. Make sure you understand exactly what the builder is and isn’t including, and plan your finances accordingly.
Protect Yourself
Of course the vast majority of homebuilders are honest people, but you still need to protect yourself. Your new home is a very large investment and you need to protect it. Many builders already work with Realtors and lenders. Don’t ever feel pressured to work with the builder’s “people.”
If a builder has a Realtor who will be acting as a seller’s agent, you can feel free to sign with a different Realtor as your buyer’s agent. Remember, it doesn’t cost anything to hire a buyer’s agent. Your agent will split the commission with the builder’s Realtor. You pay nothing extra and you’ll have someone who will be sure to put your interests first. It’s always a good choice to make.
Also, many builders work with lenders, since builders often take out loans to build the homes they plan to sell. A builder might recommend a lender that he’s had success with in the past, and there is usually no conflict of interest in that, but if you feel more comfortable securing your own lender, do so. Ideally, visit several lenders to be sure you’re getting the best rate and terms possible.
Keep in mind that unless you’re an investor and you buy and sell homes frequently, the builder is probably much more experienced in home sales than you are. Get everything in writing and have your Realtor or a real estate lawyer examine every contract and all the paperwork before you close the deal.
Check the builder’s credentials and licenses before you sign a contract. Check with the Better Business Bureau and the county clerk to see if any complaints have been filed against the builder. Remember that in a buyer’s market, there are plenty of homes from which to choose, so don’t buy unless you’re satisfied with the builder’s reputation.
Your New Home
For many people, nothing can compare to buying a home that’s brand new and theirs alone. You can decorate it to your taste and make all of the decisions. You know that no one has spilled on the carpet or put holes in the walls or scuffed the counters. Everything is new and pristine and all yours!
If that sounds like what you want, don’t hesitate. In this market, all sellers are feeling the pinch, especially builders who often have multiple homes to sell. Whether you choose a move-in-ready home or one you customize to meet your desires, spend some time beforehand researching and protecting yourself. Then you’ll be able to relax in your brand new home and your only worry will be how to best decorate your new dream home.
