Buying a builder home is similar in a lot of ways. You are able to choose the style, size, and any number of upgrades to make your home uniquely yours, and fit within your price range.
Just like building a home takes a lot of effort and due diligence on the part of the homeowner, so does buying from a builder. In some cases the quality of the construction can be questionable, and it’s not unknown to hear about a builder losing their financial backing, forcing them to close construction on entire subdivisions. That being said, doing your home-buyer homework and employing experts can alleviate any potential pitfalls. Here are a few areas every buyer needs to be aware of before purchasing a home from a builder.
Use a real estate agent Home builders will give you the option to use one of their representatives. While they are licensed to sell you a home, they have vested interest in the sale of one of their builders’ homes. A real estate agent working on your behalf as a fiduciary has to disclose both the positive and negative characteristics of the home throughout the entire purchasing process. An experienced Buyers Agent will also use their proven negotiating skills to get you the most home for your money.
Research the builder’s reputation This is quite possibly one of the most important steps of the buying process. When you purchase the home, you’re also purchasing trust in the builder and their quality of work. Your builder should understand their reputation matters and live up to that promise with excellently constructed homes and a promise to be available should any need arise. To learn more about the builder, contact homeowners who’ve bought from them before as well as Home Owner Associations (HOAs) of neighborhoods where builder homes are popular. Real estate agents who have worked with builders before are also a highly trusted resource and can ask their network to uncover any unpopular opinions that might send warning flags your way.
Consider hiring your own lender Another home buyer best practice is to shop around and interview lenders through your bank or through other trusted recommendations. Though, if you’ve completed a full inspection of the builder and trust that they are working in your best interest, using their lender is a perfectly acceptable option.
Obtain legal advice to review the contract The purchase agreement drafted between the builder and the buyer is designed to keep all parties out of court. But it’s just as critical that contract contain the buyer’s best interest.
Hire a home inspector In addition to an experienced real estate agent and lawyer, a qualified inspector offers you official insight into the construction of the new home. Have them visit the property and work directly with your real estate agent to determine how the construction of the home will impact the negotiating process.
Be realistic about upgrades Builders make most of their money on the upgrades: anywhere from 5 to 20 percent on top of the base price of the home. If upgrades are on your “wish list” make sure they are within your price range. Also be sure to research the price per upgrade to determine if it would cost less if you did it yourself after the purchase of the home.
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