Are you currently thinking of purchasing a brand new construction home? This option gives you a unique and dynamic experience, unlike when buying an older or upgraded home. You’ll be buying your new construction home straight from a builder who has constructed the house intending to sell it at a profit. Typically, you’ll be the first owner and will have full control of your property. However, before committing yourself to any agreement, you need to weigh your options and be sure of your decision. If you feel that the timing is perfect, there are essential steps to follow when purchasing your new construction property. Here are five of the most popular.

Check the Builder’s Reputation

Be it in real estate or any other sector, word of mouth is a powerful tool when it comes to spreading news, especially when it’s bad news. So if a builder’s reputation is questionable or a buyer has had a bad experience with him, word will travel to every corner in the community. So, ensure you ask the neighbors to be sure of the builder’s reputation.

You can as well check and verify the builder with public records to determine if there is any pending lawsuit. Similarly, checking online reviews can help you know what other people think of the builder’s services. Most importantly, don’t forget to inspect the construction quality of the neighborhood homes to find out if the builder is consistent with his home specifications.

Financial Planning

Buying a new construction home is a significant investment that requires a definite plan. The same way you plan your finances when purchasing other properties applies when you’re buying your construction home. Planning can help get your finances in order and find a property within your budget range. It even simplifies the purchasing process since you know what you can afford to spend on your home.

Similarly, when budgeting for a new construction home, ensure you consider additional upgrades throughout the construction period. You may need a fence, window treatments, extra lighting, and closing costs. These are additional costs to the project, and you need to determine how they will affect the total amount of the project. Sometimes financial matters can be complicated; that is why it is essential to involve a mortgage broker or a financial advisor to guide you through the financial requirements and help you choose the best option.

Seek Legal Advice

In most cases, standard purchase agreements lack a defined language to safeguard a buyer, which might expose you to various risks. That is why you need the services of a real estate attorney before you agree with your builder. You may need clarification on health risks, for instance, inquire if the materials used to build the house contain harmful chemicals that can become hazardous. Similarly, the timing aspect is crucial, so ensure you ask to know the exact time when the project is expected to be completed. Seek to understand when delays will be allowed and ensure you get a clear picture of what happens during and after a delay.

On the other hand, contingency matters are susceptible, and so it can help if you inquire if you are allowed to inspect the home. Also, check the details of your cancellation rights and know when and how you can cancel the agreement. Determine your cancellation condition and know your commitments and liability. Lastly, find out if your builder will provide any warranty and if yes, make sure you understand what it covers and for how long.

Ask for Incentive

Almost all builders provide a wide range of discounts and promotions to increase their customer base. The incentives are meant to encourage more sales or finish out the property so that they can move to other projects. It’s essential to ask your builder if there any incentive that you can leverage and save some money. Many builders offer price discounts, free upgrades, discounted upgrades, and interest rate buy-downs. They also assist with your old home sale, closing cost contributions, and energy-efficient features.

Verify Options and Upgrade Prices

Usually, upgrading your home may cost you some extra funds; it gives builders a high-profit margin. If you intend to upgrade some home features or material, ensure you get the details in writing. Check out and understand the cost of each upgrade and calculate the total upgrade costs to determine how the expenses will impact the total selling price of the property. Similarly, check on the liability provisions and learn the details of the builder’s cancellation guidelines. Make sure you understand the time limit for upgrade cancellation.

If you change your mind while the upgrade is in progress, will there be a penalty? Additionally, inquire who will pay for the non-returnable materials, in case you change your mind. Timing is also a crucial aspect when it comes to your home upgrade. Be sure to determine the time you have to make your home upgrade decisions. In other contracts, builders are given the mandate to run the upgrades if you delay your submissions. That is why it is essential to consult with your mortgage lender to determine if they will manage all your home upgrades and other options.