You CAN and SHOULD use the services of a Realtor. The salesperson at the model homes represents the builder, first and foremost. Most builders cooperate with buyer’s agents. Make sure you let your Realtor know that you are interested in a new development BEFORE going to see the model homes. Some builders are very strict when it comes to registering agents and their clients (the agent must be registered upon the clients’ first visit).
New does NOT mean perfect. Even though your home will be newly constructed, that does NOT mean that there won’t be any flaws. Hire a home inspector – independent of the builder – and make sure everything is safe and up to code. If and when you do find imperfections, you need to make sure you are familiar with the…
Builder Warranty. Warranties vary with each builder, but California law protects homeowners from construction defects. This law is known as the “Right to Repair Act” or “SB 800.” Consult your attorney for more information on this law. Builders will typically provide a 1-2 year “fit and finish” warranty, and a 10-year structural warranty. Make sure you read and understand the builder’s warranty. If you need to file a claim, do so immediately instead of waiting for the problem to get worse!
The builder’s warranty most likely will NOT cover appliances. Make sure there is an acceptable manufacturer’s warranty, and consider purchasing a home warranty. A home warranty covers HVAC and plumbing systems, as well. It could save you hundreds or even thousands of dollars down the road!
What you see may NOT be what you get. A model home may feature highly upgraded finishes, appliances, and structural options. Find out what comes standard at the advertised price. Keep in mind that you may have to spend more on landscaping if your lot has a backyard.
Beware of additional charges! Don’t forget to factor other fees into your budget, including lot premiums and upgrades. Many new developments are likely to have a Mello-Roos tax and HOA fees. And don’t forget about your supplemental property tax bill and closing costs! This is why it is important to also…
Make sure you have a great lender. Many builders will offer buyer credits for using their preferred lender. This is a good option, but don’t be afraid to shop around. The preferred lender may be able to match others’ rates/fees. If you choose to go with another lender, make sure it he/she is reputable and trusted by many. Builders may charge a fee if your lender is unable to close on time.
If you are building a home from dirt, you will become a designer! You will be making many design choices, from floor coverings to door knobs. This may be fun for some, but overwhelming for others. Don’t blow your budget on too many upgrades. Builders make a profit on finishes, too. You may be able to install different fixtures or flooring after closing for less money. However, this may void the builder warranty depending on what type of work is done.
Have a flexible timeline. Due to the nature of the home-building industry, builders aren’t able to give you a solid move-in date. Many factors can delay new construction: availability of trades and materials, weather, permits, inspections, and any last minute design changes that you may want to make. Any close of escrow date is a moving target, but this is especially true with new construction.
Consider the surrounding area. Keep in mind that you will be living in a construction zone until the project is completed. The neighborhood may take years to be built and sold. In a tough market, it may go unfinished completely. Do your research on the area and the builder.