What you should Know about Buying a New Home

When buying a new home in a subdivision, the model homes usually have many upgrades that you may think are included.  Be sure to get a disclosure of exactly what is included as "standard"  in the home of your choice.  Also ask to see upgrades that are available to you that may not be displayed.  Ask if the builder does "custom" changes and how much they cost.  Many builders offer changes such as a den option instead of a 4th bedroom.  Perhaps you would like to make an existing half wall taller to accommodate a favorite piece of furniture.     

You will need to buy your home in the early stages of construction to make any major changes.   Some builders will not make changes such as changing an oval tub in the master bedroom to a jetted tub no matter what stage of construction a home might be in.  Some "extra cost" custom touches might include crown molding, completely finished garages, insulated garage doors, whole house fans, intercom systems, central vac, adding extra lines for computer modems and extra electrical outlets, etc.     

Make sure you understand how much cash you will need to come up with before the builder orders any materials or starts work on any upgrades or changes you may want.  Some builders insist on 50-100% of the cost of upgrades/changes be deposited in escrow.  This is in addition to your good faith deposit.  Also make sure you understand if some or any of this money is refundable if you decide not to buy the house.     

One of the biggest expenses you face when moving into a new home is the backyard landscaping.  Most new home subdivisions include sprinklers, lawn and a few plants for the front yard, but the backyard landscaping is not included.  Some of the subdivisions will also offer a backyard landscaping package at extra cost.  You might want to price out what it would cost to level the property, bring in topsoil, install proper drainage, install the sprinklers, lay sod, purchase plants and the time it would take you to do that.  You can then compare the cost and the time factors and decide if it would be an advantage to you to have the builder subcontract the landscaping for you.  The majority of the lenders will allow the extra cost to be included in your loan.     

Find out if there are any Mello Roos bonds in the development.  These bonds benefit you as a buyer by helping to develop the "infrastructure" (such necessities as new schools, roads, police and fire departments, street lighting,  and landscape maintenance in the medians in the streets and the new parks within the development area.  They are usually included in your property tax bill and make a difference in the amount you pay each month for your house payment or your tax bill.

Gated communities are becoming more popular and are one of the types of subdivisions that may have a monthly association dues that will be payable by the owner.  These dues pay for the maintenance of all "common areas" (such as the pool, shared landscaped areas, front yard maintenance, roofs, and outside paint).  Sometimes the water and garbage collection is paid for by these dues.  Be sure you ask!  The additional monthly debt of the association dues will lower the amount of loan for which you may qualify.     

Many new home subdivisions have home warranties.  All the new appliances are covered by the manufacturer's warranties.  The home builders also have warranties that cover the structure itself.  Ask to see the warranties because they all differ.  Study the coverage for the materials and labor so that you fully understand the limitations of the coverage.  Buying a new home does not guarantee that there will be no problems so you want to make sure that you will be covered if a water pipe breaks in an upstairs bathroom and runs down the walls to flood the dining room below.  

The best way to make sure that you have everything covered is to work with a licensed Realtor®.  We sell new home subdivisions as well as resale homes.  As professionals working everyday looking for the best buy for our clients, we know the best builders and locations.  We can save you an incredible amount of time and will locate the "best buy" in the subdivision.  If you are looking for a new home, tell your agent.  Your agent must accompany you on your first visit to the subdivision and register you.