Building a home from the ground up can be a whirlwind process, whether it's a custom home on your own purchased lot or in a neighborhood of new builds.
Unless you are purchasing a Quick Move-in (meaning the house is new construction but completely finished), a thousand decisions have to be made, and a word to the wise - new construction does not mean without issues. Inspections still need to be obtained. Appraisals will have to be done. A wise buyer insists on a walk-through and proof of the fulfillment of a contract with the seller. After all, at the end of the day, the builder wants to sell you a home. Once you move in, their job is done.
The following five questions can start you toward dealing with a new builder or contractor, but they are not an exhaustive list. Getting the answers to these questions and more will ensure that you understand all the ins-and-outs of the building process. You will also get a better feel for any potential red flags, which can save you a ton of time, frustration, and money down the road!
Question #1 - Is the price of the lot included?
If you are hiring a custom builder to construct your dream home on a lot you have already paid for, then naturally, the lot is not involved in the overall construction cost.
If, however, you are considering new construction on a builder-owned lot, be sure to ask if the price of the home includes the price of the lot as well.
Question #2 - Is a home warranty offered and/or included?
A common myth concerning new construction is that it is new, and therefore, everything will be in perfect working order.
Nothing could be further from the truth! New construction does, and oftentimes will, have issues. And certainly, not all builders are created equal either.
Make sure the builder is offering a home warranty and be sure to get an itemized list of exactly what is covered and for how long.
The last thing you want to do is move into your new home and find out there are issues with the foundation, the AC/heating systems, or even water damage resulting in mold issues. Without an enforceable home warranty, you will be paying for any repairs, and some of these kinds of repairs can be quite expensive.
"The ache for home lives in all of us. The safe place where we can go as we are and not be questioned." – Maya Angelou
Question #3 - How long will construction take?
Unless you are buying a Quick Move-In home, you will be contracting from the ground up on your own property or waiting for the builder to finish a house. With either of the last two, do not assume that builders get right to work on your house once you sign on the dotted line and offer your down payment and/or escrow money. Many builders have waiting lists, and oftentimes, seasonal weather and rains, supply issues, and more can slow down their progress.
It is always best to prepare for a delay in the construction deadline, because more often than not houses are not ready on time. Be sure to understand any sort of grace periods the builder has allotted in the contract and have plans in place for temporary housing should there be a significant delay.
Question #4 - What standard options are offered and upgrades can you choose?
Almost all builders offer basic materials and options for construction.
And then, they offer upgrades.
Upgrades can include everything from flooring quality and countertop materials to HVAC systems, home security systems, outdoor sprinkles, and appliances. Even ceiling fans and garage door openers can be considered upgrades by builders.
And upgrades, almost exclusively, cost more money. So be prepared, if you wish to partake of the upgrades, to pay more for the final cost of construction.
Question #5 - Be sure to ask if you can back out of your contract!
Every builder creates their own contract, and built into that contract are several places, generally, that allow you to back out with various degrees of loss to your pocketbook.
Keep in mind, though, that if the builder does provide an out, at some point that deadline will pass. At that point, you cannot back out of the contract for any reason at all. If you do, the builder can sue you for breach of contract.
And finally - take a real estate agent with you!
For an even happier outcome in your new home, take a real estate agent with you, especially when dealing with new construction in new neighborhoods. They'll help you ask these important questions and have tips on other things you should ask about and consider.
And if there are contractual issues during the building process, or even afterwards?
Your real estate agent can work with the builder to make things right on your behalf. A good real estate agent works with you before, during and after you have bought your home.
After all, it's your house and your story, and you want to enjoy being in the home of your dreams!
Donna Hechler Porter is a real estate agent with Keller Williams Elite Realty in Baytown, Texas. An educator, a published author, and an arm-chair historian, Donna runs a small publishing business in addition to educating people about how to build future wealth through home ownership. Feel free to contact Donna at dhporter@kw.com.