Some Hazards Of New Construction Home Buying
You're ready to purchase your Warren County area home, and if you're like most people, you'd LOVE to have a new home providing the right builder is building in the right location at the right price. However there are some things you need to consider before making that new construction decision. None of this is intended as a bash the builder, scare the buyer post, but things you do need to consider to protect YOUR best interests.
Step 1: GET YOURSELF A REALTOR®!!! We've talked about this before, so we won't beat the deceased equine, but the builder's rep works for the builder, we work for YOU! And for the major builders, they're NOT going to discount the price for showing up without us.
Now back to that list of things to consider:
- That development may NEVER get finished. Builders were going great guns in 2005, '06, '07 and then WHAM!!! The rug got pulled out and they came to a screeching halt across much of our service area. Some builders went under. You can drive by some developments and only see one or two homes on a street, and lots of vacant lots with no grass. Islands in a subdivision desert. What's the builder's rep? Have they closed up other developments in the area? That's a red flag. A custom builder? Might want to check the foreclosure lists and make sure their name isn't there.
- Those amenities you were promised? They're negotiable. The clubhouse and pool may not get built until a certain number of homes have been sold and built, and that may take quite awhile. Hopefully your HOA fee doesn't reflect the cost of something you're not getting. And if things get really bad, well that pool and walking trail just may get scratched off the To Do list.
- The rest of the homes in the community might not be as nice as yours. The builder starts off with the best of intentions. Every home will be $300k +/- 50k. Then cash flow isn't so good and hey, those $200k homes seem to be moving well in community B, let's build those over here in community A. Sorry about your luck. There's an area community started with the builder's premium brand and being finished with their entry level brand. Not cool if you were one of the early buyers.
- You may be overpaying, BADLY. It might be true that all the homes in a community are selling for $300k, and somehow they all appraise, but similar homes in the area are selling for $250k.
- You may be the builder's competitor later. What's you're expecting moving timeline? If you're getting in early to a development and you have to move within the first few years, unless there's massive appreciation (okay, NOT happening in our market), you're in a tough spot. There's no polite way to put this, you're probably up the creek without a paddle....or even a canoe. The builder is putting up brand new, never before lived in homes JUST LIKE YOURS, so unless you can undercut the builder, the buyers aren't motivated to pick your home.
- Those upgrades might not be worth it. If you've got the cash to make it happen after closing, you might want to pass on some of the builder upgrades. E.g. those kitchen counters. Maybe not enough selection to really fit you? Check the price and shop around for post closing installation. There are MANY granite/marble stores in the Cincinnati and Dayton area that would be happy for your business, and you can be a little more individual than your neighbors who had choices A-E to pick from.
- Can you visit the homesite frequently? The builder is only as good as their subcontractors and supervisors. DO NOT COUNT ON THE COUNTY INSPECTOR CATCHING THINGS! Hire your own home inspector to check things out at key intervals (like BEFORE the drywall is installed). Builders are human, mistakes get made, catch them before they cause you trouble after moving in.
Obviously these are just some of the major factors, and there are plenty more to consider. A new home may truly be the BEST decision for you, and we regularly work with new construction builders. However, take into account the risks before setting your heart on a new home that just may cause you heartache later. We're here to help guide you in making that decision that protects YOUR best interests.
Serving Warren County's residential real estate needs,
Liz and Bill aka BLiz
Serving Warren County Ohio & Adjacent Areas
The Liz Spear Team of RE/MAX Elite
Elizabeth Spear, ABR, CRS
William (Bill) Spear, CRS
Ask for us by name if you visit the office!
Two locations: Lebanon & Mason, OH
Direct #2: 513-265-3004
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