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Guide to Buying New Construction for Rookie Investors

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If you’re in the market for a brand new home, there are a few things that you need to know.

Research the builder.

Just because it’s a brand new house doesn’t mean that it won’t have any issues. Research your builder carefully before buying by going online to read reviews. You’ll want to know if they have a reputation for good, quality work, if they are financially sound, etc. Like any investment, research is key.

Make inspections.

You’re going to want to get a inspector to take a look at the house and make sure that it is up to code. The builder should fix any code issues and without a professional, you could end up buying a house with problems that you have to pay to fix. You have the right to get an inspection, however you aren’t able to walk away based on the results of the inspection. You’ll also want to make sure that you understand the details of your warranty before signing.

Buy without an upgrade.

This is an easy way to cut costs. Since builders charge a big markup when adding upgrades to the home, it will save you money to pay a contractor to do the work. Remember when you tour a development’s model home, it’s the high-end version of their standard home. Find out which options are standard and which ones are upgrades. Keep in mind, paying the builder for the upgrades can be better for your budget because they can add the upgrade costs to the loan amount. If you pay a contractor, you will probably have to pay in cash. Figure out which option is best for you.

Find out who pays for delays.

No matter how prepared you are, an unforeseen issue can arise. It’s important to be prepared for any avoidable problems like delays. You will want to get everything in writing when it comes to delays on construction. Your contract should include what options you have if the construction isn’t finished on time.

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