Looking for a new home or a new customized home? A contractor building a new development will offer several sets of plans and price ranges to choose from. A truly customized home on the lot of your dreams will run you a bit more because of the extra costs in design and possibly less efficient use of construction resources. And there will be extra costs and time to prepare the land. Developers and contractors usually do not want to entertain your castle design because they have efficient systems in place to mass produce the six or seven pre-designed models. Either way, if you are prepared to pay a premium, you can have what you desire.
Some mass developers will allow you to customize your new home by selecting the trim, cabinet style, flooring or carpeting and other finishing touches – as long as they are chosen from their pre-selected list of options. Going outside the selection box will be discouraged by increased costs. However, you are going to live there, so get what you want but stay within your budget.
Here’s are some tips to get the best deal on a new construction home.
Use your own agent. The sales rep you meet at a new construction site represents the builder and corporate owner’s interests, not yours. To have your needs be number one, bring your agent with you, it ensures there is no conflict of interest. Some community developers require your agent be at the first and every showing, otherwise you might find you have to work with the rep who registered you.
Don’t expect a price reduction. Production builders do not want to negotiate, it sets a bad precedent. People talk and the next buyer will demand the same discount. They have already priced in mass discounts and deserve a profit. Custom builders can and will be more flexible if you are easy to work with. Some will sweeten a deal by negotiating prices on finishes, or upgraded carpet or appliances, or will add a fence.
Typically a custom home will be higher priced than a “spec” house near completion. Note also, that homes that have not sold for a period of time will actually go up in price in a new development, supporting the builder’s position that materials and labor costs increase.
Shop for a lender. Many builders will offer incentives to buyers who use their preferred lender and title company. Shop around and get quotes from at least two other lenders before making your decision.
Finish it yourself. The model will have all the bells and whistles. Ask the builder what each upgrade costs and then consider hiring a contractor to do the work after you move in. Builders tend to charge a sizable markup on certain finishes or products such as a high performance air conditioner, whereas a reputable HVAC company could install that same unit for much less. Be prepared to pay cash for any after close finishes, they can’t be rolled into the mortgage.
Understand the builder warranty. Not all warranties are the same. Some builders warrant all their work for several years, some only part of it for one year. Most will offer a 10 year warranty on structural issues, and specific times on things like plumbing. Manufacturer warranties on appliances, and windows are transferred to you. Be sure you understand the warranty offered and ask for references. Find some past customers through reviews on Angie’s List, or knock on the neighbor’s door.
Know what is planned for the community. Is it all single family residences or will some town homes be added next year? Will there be a commercial zone next door? How many subdivisions are planned? Where are the open spaces? This could impact your decision to buy.
Expect changes. Suppliers run out of product, and builders typically reserve the right to substitute, leading to surprises. Ask questions about what might be substituted and any restitution.
Should the builder lose funding, another company may come in with a lower quality or different neighborhood image, impacting the value of your home, so vet the builder.
By Alan Dooley