Home Buying in Houston>Question Details

Vero, Home Buyer in Los Angeles, CA

What are some tips or things to look out for when buying a new home from a builder?

Asked by Vero, Los Angeles, CA Tue Mar 25, 2008

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Hi Vero,

I agree with my colleagues. Bring a Realtor with you. Understand that the salesperson behind the desk there at the builder's sales office works for the builder, not you. They are looking out for theirs and the builders best interests. They never mention having inspections done prior to closing (which I always advise my clients to do on new builds) nor do they mention that the price is negotiable. I have advised clients to walk away from deals on new builds because when I worked the numbers out for them, what seemed to be a good deal was not really a good deal. I have found that most of the salespeople at the builder sites will say anything you want to hear to close the deal. Often at your expense.
1 vote Thank Flag Link Wed Mar 26, 2008
I agree with Jeff - find an agent in your area that really knows what they are talking about with new construction and has experience with building new homes... I mean they know what goes into it from the ground up, can understand floor plans and architectural drawings (for the most part), and know they kinds of things that people FORGET to ask about when starting out the process. This will help you from making mistakes about who to choose as your builder, how your floor plan flows, your choices in materials and finishes (big deal on resale), etc. There is a LOT to look for and a set of experienced eyes helping you along the process is SOOO important. A CSP designation is a good start for selecting your agent - Certified New Home Sales Person.

If you have not registered with the builder you are using yet the agent can be paid by the builder - and amazingly the builder would charge you the same either way!

I specialize in assisting customers with new construction here in Gainesville, FL and every one of them has been so thankful for my assistance during the process - and they just didn't know what to expect going into the process. Do yourself a favor and get a professional, if they are experienced and care about your needs you will not be disappointed..
1 vote Thank Flag Link Wed Mar 26, 2008
Go and look close at homes that builder has already built. Find home owners that have used that builder and ask questions. Check for complaints, at the state level, with the Home Builders Association or the agency in that state that issues builder/contractor licenses.
1 vote Thank Flag Link Wed Mar 26, 2008
Talk with people that have closed in the neighborhood. If the builder is a publicly held company, take a look at their stock and related info. Make every effort to talk with contractors that you might run into working on the job (if they haven't been paid, they'll likely tell you). View homes in inventory to see if the quality is commensurate with the model home. Insist that an inspector view the property that you're considering. Pull up all recently closed sales, to establish pricing. If you are in an area that's having real problems...you might simply want to wait. My daughter recently had a builder call her back to offer her an additional 75k off of the negotiated price on a house- she's going to wait until things settle a bit.
Web Reference: http://optionsrealty.com
1 vote Thank Flag Link Tue Mar 25, 2008
Even though it is a new home I strongly recommend getting an inspection done...and dont be affaid to low ball your offer......builders are still having diffic\ulty unloading inventory so you can usually get a great deal and maybe some upgrades as well.....
0 votes Thank Flag Link Mon Mar 23, 2009
Vero- Are you looking in Houston? We have some unique issues here that your Realtor can go over with you, such as MUD, LID and PID taxes. Most new construction homes will have some of those taxes, depending on the community. Houston has no zoning which makes it unique as the 4th largest city in the US. Your Realtor will be able to guide you through these and other issues including selection of a reputable builder and neighborhood for your family.
Web Reference: http://www.ERASold4Sure.com
0 votes Thank Flag Link Wed Mar 26, 2008
Dear Vero ~ There are a few different scenarios... If you are looking at a "Build to Suit" ~ Building from plans ~ You will want to ask for references from previous customers, ask about the time frame of building the home and their record for on time completion. There also should be a multi page building contract that has protection for you in it, as well as a multi page specification list of all that is included.

If you are purchasing a "Spec Home" ~ one that is already constructed you will want to have a contractor's inspection to insure that the home was built to code.

If the home is currently under constrution you will want the builder to provide a comprehensive list of what he will complete in addition to the above listed items.
0 votes Thank Flag Link Wed Mar 26, 2008
I think that Ron's answer was a simple, yet good, answer. And so was OptionsRealty's answer. So to add to what they said I would suggest looking at the cost of construction (the price should be at least 30% lower than buying a pre-existing home), the type of material used ( is it SIPs, ICFs, Enviro-Bricks, Panelized, or just plain old stick and sheet rock?), and check and see if the Builder is a large scale neighborhood/community builder or just a General Contractor. I think this is relevant at this time because these large scale builders are filing bankruptcy after taking in deposits and half constructing some homes leaving behind literal "ghost towns" in their aftermath.

I noticed that checking their stock was mentioned, and though that is a good idea, it can also give you a false positive, so don't rely on that alone. The truth is you'll never know when one is about to fail. So take what Ron, OptionRealty, and I have posted and you should have a pretty good starting point.

Another point, when getting a home built you don't need any other players regardless of who pays. But in reality, if you look at some of the comments below, you will see that the person paying for everything IS YOU! All the builder will do is charge you to pay them, and your loan amount and interest payments increases by that much more. The main reason to build TODAY is to save money. And you save by cutting expenses. Think about it.

I hope this was of some help to you.

Khazeem Asadullah

email: info@serapisdebtservices.com
0 votes Thank Flag Link Wed Mar 26, 2008
Hi Vero.
Buying a NEW HOME can be daunting experience to say the least, especially if you are going to relocate to a new city or state. I have been selling homes for 10 years and I still have a lot to learn. I have helped close over 1200 homes and I learn something new every time. I have put some tips together that have worked for myself and my clients.

HIRE A Real Estate Agent for your new home purchase and when you do I would use common sense to pick one. Most people don’t understand that the Seller pays Real Estate commissions If you do not use a Real Estate agent then you are helping the seller out by saving them a lot of money. Your Real Estate agent is responsible represent you and answer any questions you may have about the process of buying a home. Make sure your agent has a lot of experience as 90% of agent will fail in there first 5 years. I have been around 10 years and going strong. Make sure that you stay faithful to an Agent that is doing a good job for you.
To read the rest you can visit here. http://www.rebateontexashomes.com/html/new_home_buying_tips.…
0 votes Thank Flag Link Wed Mar 26, 2008
Research the Builder! Some are more reputable than others. Find an agent to represents you and who is not affiliated with the builder. Many agents can also assist you with by providing information and/or sharing their experiences with a particular builder. Be sure to hire your own inspector as well. Good builders will prepare a "punch list" that should be a comprehensive list of outstanding items that have yet to completed prior to closing. The builder’s list should also include those items identified by your own inspector to ensure the list is as complete as possible. Many builders offer a 1 year home warranty. Be sure to read the fine print so that you know precisely what is and what is not covered under the warranty - then pay attention to the house in your first year and record and photograph things that fall under the warranty for the builder to remedy. Take the initiative and contact the builder prior to your one year anniversary and document all that they repair and what they do not.
0 votes Thank Flag Link Tue Mar 25, 2008
1) DO NOT use the builders in house lender for financing. Get your own lender for the financing.
2) Have your own buyers agent (not affiliated with the lender or sales agents) handle the transaction for you and research comparables that have sold recently.
3) If you agent cannot come up with comps that are re-sales (Not New Sales - they support the builders inflated selling price), then contact an appraiser to research comps and market trends/conditions as a consulting assignment. Your lender will order a full appraisal.
0 votes Thank Flag Link Tue Mar 25, 2008
Never purchase a home from a for sale by owner, builder or from anyone unless you have your own real estate agent. We receive so many emails and calls a week where buyers made huge huge mistakes did not have a real estate agent involved from the start Welcome to Texas, you will also need to be pre approved for a loan if I can offer assistance for the loan approval process contact our office.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Tue Mar 25, 2008
You know, a builder usually has money built into the price for buyer representation. My gosh, if it doesn't cost any more, why would you not want an experienced agent to assist you??????
Web Reference: http://www.queencitygal.com
0 votes Thank Flag Link Tue Mar 25, 2008
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