Some people say buying a pre-owned home is like buying someone else’s problems. The flip side of that argument is that buying a brand new home is a journey into the unknown — there may be problems with the property that won’t emerge until someone lives in it.
Here are six tips for minimizing problems that can emerge when buying a newly built home:
1. The completion stage should affect your negotiating strategy
If you’re buying in a development of several new houses, the state of completion can inform the type of offer you make on a home.
Making an offer when construction hasn’t yet begun or is in an early stage implies the development is in demand, and there is little reason for the developer to move off the asking price at that point.
On the other hand, if a developer has completed a house that hasn’t yet sold, every day that house sits empty is costing the developer money. In those situations you can be more aggressive about making an offer at a discount from the asking price.
2. Be wary of timing issues if the home is not completed
Another thing to watch for if the house is not yet finished is that delays are very common in the construction business. This is especially true in northern parts of the country where weather conditions can inhibit construction at certain times of the year.
Naturally, when you are discussing a deal the developer may express confidence that everything will go as scheduled, but take that with a grain of salt. While it may represent an added expense, try to build in an overlap period between when the house is supposed to be ready and when you have to give up your current residence. This added expense may prove to be much less costly and disruptive than having to put possessions in storage and find temporary lodging if you get stuck between homes because of a construction delay.
3. Consider how long it may take the yard/landscaping to mature
It’s not just the house that can take time to be ready. Developments on newly cleared land may take a while to grow healthy lawns or trees capable of producing shade. Depending on your local climate, keep in mind that you may be living with a patchy piece of property for a while, and if the landscape is hilly, look for any signs of the erosion issues that can arise when land has been recently cleared.
4. Learn about any restrictions on customizing your property
Many housing developments have a somewhat cookie-cutter look to them — matching models in similar colors lined up side by side. If you have thoughts about how you might customize a property with an addition or a different paint scheme, find out before you buy whether you’ll be allowed to follow through on those plans.
Some new neighborhoods may be under homeowner association (HOA) rules that limit exterior changes. Local zoning laws may have a say as well. Look into this before buying a property you may want to change.
5. Check whether neighboring homes are occupied
Look beyond the home you are considering, and see to what extent other homes in the same development are occupied.
If they’re completed yet empty, it may be a sign of low demand. Depending on how you look at things, that may be a warning sign or an opportunity to take a tougher negotiating stance.
If several other houses on the street are still being built, resign yourself to the fact that your first several months in your home are likely to be spent surrounded by the sights and sounds of ongoing construction.
6. Research the developer’s track record
Research the developer’s track record online and with a local business association. Ask the developer for locations of prior properties the company has built so you can go visit them and see how well things have held up.
Also, regardless of how good the developer’s reputation is, get any promises in writing. This includes warranty coverage on the new building itself and any fixtures within it.
Taking care of the above details can help you reap the benefits of buying a brand-new home without suffering from the potential drawbacks.