Thinking of building your dream home? There are some very important things that you should consider when building your next home. Below are our Top 7 Things to Know when building your dream home!
Some questions to consider for yourself are: Do you need to sell your current home in order to buy your new home? Do you have a place that you can live temporarily while the home is being built? Do you want to build from scratch or choose a “spec” home? Are you willing to choose a floor plan option from a builder, or do you want to truly build a custom home? Would you prefer to be in a subdivided neighborhood, or on acreage? Some of these questions are covered in the information below.
Of course, our experts are always available to help you answer all of your questions regarding building a brand-new construction home with a builder. We have the experience and information that you need to make the most informed decision.
Top 7 Things to Know when Building Your Dream Home
1. You should hire a professional REALTOR to assist you. Many times, home buyers believe that the sales person for the builder is there to help them. While the sales person will help to facilitate the purchase, they do NOT represent the buyer’s best interests. In fact, they actually represent the seller’s best interest. That means that part of their job is to get the most money for the builder that they can get. When you hire a REALTOR, they will not only look out for your best interests regarding the sales price, they will also be an invaluable resource throughout the process. From negotiating price and understanding the timeframes, to building permits and city inspections – your agent will be your advocate.
2. You should consider the comparable sales. You should be aware that builders generally price their homes for the market, however everything in real estate is negotiable. Your REALTOR will be able to let you know what other homes have been selling for in the area, and give you guidance on where the market is today….as well as where the market will be when the home actually goes to closing. If the market is hot, the prices could increase while you are in the construction phase. That is important to know because the appraisal will be done closer to the time when you will complete the sale.
3. You have choices regarding your lender. If you are not paying cash for the new home, you will most likely be getting a mortgage from a 3rd party lender. Many builders have a “preferred” lender or an “in-house” lender. Sometimes the builder will offer incentives when buying a home if you use their specific lender. However, in Texas, the builder cannot force you to use their lender of choice. As a buyer, you always have the right to choose the lender you want to work with. Ask your REALTOR for recommendations on other preferred lenders in the area as well. If you have a lender that you love (or that your REALTOR recommends), ask them to give you a quote against the builder’s lender to see which one is a better deal. Really compare apples to apples. Sometimes you will find that the builder’s preferred lender gives you incentives, but also increases their fees somewhere else. Do your homework before choosing which lender you want to use.
4. Appraisals Matter. As you get closer to the day your home will be finished, your lender will order an appraisal of the value of the property. Many times, a builder will not want to reduce the sales price if the appraisal report shows the value is not as high as needed. Know your options, and speak to your REALTOR if this comes up as an issue.
5. Contingencies are a concern to most builders. Most home builders will not accept a contingency offer on a new-build home. The builders that will accept contingencies generally want those contingencies waived about 60-90 days prior to closing. Many times, the marker for when the builder needs a contingency cleared is when the cabinets are ordered or installed. Once that happens, many builders will not allow any changes or modifications to the design of the home as they are working toward the closing deadline and don’t want any issues to cause a delay. What this means for most home buyers is that they must sell their home early in the build process, move into temporary housing for a few months, and then move again into their new home once it’s complete. There are some ways around having to move twice. The most common is buying a spec home that is already complete (a builder may take a contingency on that specific house). The second most common way to avoid moving twice is to work with your lender to qualify for both loans.
6. Inspections are important. Many times, a home builder will discourage a home buyer from getting phase inspections during the build process. While the builder does have to comply with the city/county inspectors and follow all local building guidelines and ordinances, those inspections are generally the base-line for what is required. Talk with your REALTOR about your inspection options and the benefits of having an independent third-party inspector perform either a phase inspection or a general home inspection prior to closing.
7. The little things can add up. Once you choose your builder and your floor plan, and you have agreed upon a price, that does NOT mean that you have determined how much you will spend building your new home. If you are going with a large-scale builder in a subdivision your next step will likely be visiting their “design center” to choose what color flooring, cabinets, counter tops, and other finish outs you want in your new home. This design center appointment could be expensive. Many times, the price of the home only includes the minimum finish outs, while the model home you visited usually has the highest quality finish outs. This means that you will spend extra money getting those faucet fixtures you loved or getting that extra electrical outlet to hang your TV on the wall. Talk to your REALTOR about ways to lower your costs here before you finalize your contract.
We hope these top 7 tips for building a new home were helpful to you. For more information about building your dream home, call us at 469-759-3899. Our team of experts are here to help you navigate the process and help your home building dreams come true!
North Texas Top Team serves the North Texas area and we have a network of trusted professionals across the country. If you need real estate assistance outside of the DFW area, we will gladly connect you with one of our amazing REALTOR friends all across the USA. Give us a call today!