New Home Fever

As spring approaches, so does the annual rush to new home communities with their professionally-decorated model homes that impress, attractive landscaping that gives new meaning to the term “curb appeal”, and deals that seem too good to overlook. It is so easy to buy a new home, that you will wonder why you ever considered resale.

Before you go down this path, let me share my seven rules for buying a new home:

1. Never step foot into a new home model without your own licensed buyer’s agent.

Reputable builders who offer to co-op with brokers, and most of them do, have already included this expense in their pricing. In other words, you’re paying for a buyer’s agent in the price of the home whether you have the benefit of an agent’s representation or not. You will not get a “break” in your home price when you buy new construction without an agent.

2. Never step foot into a new home with a lender’s pre-approval in hand.

Builders do tend to have their own in-house lenders whose job it is to enable you to buy the new home. And you may decide to work with this lender, rather than the one who pre-approves you. But the pre-approval assures you an independent assessment of your home-buying qualifications from a mortgage professional with no affiliation to the builder.

3. Don’t agree to use the builder’s lender without comparison-shopping.

Some lenders recommended by builders provide a kickback or finder’s fee to the builder and they pass on that cost to borrowers in the form of a higher interest rate or closing costs. When a builder offers you incentives (free finished basement, closing cost help, upgrades) for using their recommended lender, realize that you probably are paying for those items in the higher costs of your loan. Otherwise, why would the builder care where you borrow your money?

4. Before you sign a contract, research the builder.

The best way to do this is to knock on the door of homeowners that previously purchased from this builder in the same or other nearby communities. Don’t stop with one or two if you run into unhappy homeowners, because any community will have a certain number of people who are impossible to please. Walk away from the builder and new home if a substantial number of current homeowners report bad experiences with the purchase or after-closing service.

5. Before you sign a contract, research the area.

This is particularly important if there is vacant land nearby, because you want to know what the zoning is currently as well as any proposed changes. But don’t stop there – be sure to check with the Department of Transportation to identify any possible road construction that could interfere with your property or the traffic patterns you expect to encounter.

6. Include a home inspection contingency in your sales contract.

A new home is not automatically “okay”. Most people do this for re-sale homes today, but few make the small investment to do so for new construction. The local building inspector only looks for compliance with building code, not for best practices. Even if a home inspector finds no major issues, that peace of mind is worth every penny spent on the home inspection.

7. Get everything in writing.

Buying a home is always an emotional experience, especially if it is a brand new home with other prospective buyers walking through the model as you’re sitting in the sales office contemplating a decision. Most reputable builders will accept a deposit on the home and lot you’re considering for at least a few days so you have time to preview their standard sales contract and do a little planning without the house selling out from under you. Be sure to ask for this.

During that time, sit down and make a list of every detail including your choice of lender, payment by the builder to your buyer’s agent, options, guarantees, the home inspection contingency, timing for completion and anything else you have discussed with the sales person, your agent, and your spouse. Make sure that everything YOU want is included in the sales contract, not just the builder’s standard wording. In fact, challenge any of the contract provisions if you do not fully understand and agree to without hesitation.

Buying a new home can be a wonderful experience, and living there can be even better. If you have new home fever, contact me for some additional hints to assure a smooth and pleasant experience.

Related links:

• Willow Woods - Severn, MD
• The Estates at Aisquith Farm - Davidsonville, MD
• The Oaks at Waters Edge - Elkridge, MD
• The Groves at Piney Orchard - Odenton, MD
• Kinsport of Annapolis - Annapolis, MD
• Gatherings at Cedar Ridge - Odenton, MD

Feedback or more information:

Email: mwoda@remax.net
Website: www.MargaretWoda.com

Crofton Real Estate

New Home Fever

Copyright 2007. All Rights Reserved. Margaret Woda