Steps to Purchasing in a New Development:
Select a Geographic Area
A buyer needs to select a geographic area that is suitable for their individual lifestyle. Today, lifestyles are the key determinant to making an informed home buying decision.
You should determine what is a reasonable commute to work and what the means of transportation will be…via interstate or mass transit. Schools will be of great interest if you have a family.
If seeking a pre-retirement or retirement home, you should determine the proximity of family, friends, and existing home.
A determination should be made as to where consumer goods and medical services are made available.
Affordability is a key factor in any home buying decision. Knowing if this is a move-up in home value, or a lateral or downward move, will move the decision making process right along.
Once these lifestyle issues can be resolved, the search can be narrowed to several qualifying locations.
Select a Development and/or Builder
Once location has been selected you can now focus on new home sites and move to the next step - research the builders. A reputable homebuilder will belong to a local homebuilders' association. Also, it is advisable to check with the local building inspector for an opinion on quality.
Choosing a builder is just as important as choosing the style of the home. The builder not only has the responsibility for the largest investment a buyer may ever make, but his or her skill and preferences can have a direct impact on future comfort and happiness.
Not all new home communities are the same. Each one carries the distinctive mark of the builder, whether that happens to be innovative floor plans, distinctive craftsmanship, bold architectural statements, or just great value. Each builder also has a different personal style and way of communicating with his or her clients.
The buyer should consider references of past clients. Drive through one of the builder's previous subdivisions on a Saturday morning and try to get a random sample of opinions. Ask questions like: are you happy with your home? People are usually willing to share their joy or their sorrow.
Determine the Amount of Deposit
Now that the right location and the right builder have been selected, it is appropriate to go to contract. Most builders require anywhere from 10% to 25% down in order to start a home. If the home is up and standing, the builder may accept 10%. If a custom home were to be created specifically for the purchaser, the builder may expect a 25% deposit at contract.
Selections increase in proportion to the price tag of the home. Correspondingly, the time it takes to build the home increases with the size and the number of custom features selected.
Realistically, a home delivery date range, if started from scratch with an improved road to the home site, can take anywhere from 120 days to 18 months. Remember, the builder is anxious to keep the home delivery schedule on time. The builder does not get paid until closing.
Before the closing, a home inspection tour will be conducted. During the tour the builder will point out all of the features and provide warranty information on each. Learning about maintenance and upkeep responsibilities is very important. Most new homes come with a one-year warranty on workmanship and materials. However, such warranties do not cover problems that develop because of failure to perform required maintenance. Many builders provide a booklet explaining common upkeep responsibilities and how to perform them.
Manufacturers provide warranties that are covered by the manufacturer, not the builder. The builder is responsible for any building code violations that occurred. However, in the unlikely event that there has been a violation (because builder research was conducted), the responsibility becomes the builder's.
During the inspection, the purchaser should look for scratches in the counter tops and flooring. Walls should not have gouges and the moldings and trim should be square. The buyer should take pictures before the title is taken, particularly if a problem is discovered. The builder will prefer, under all circumstances, to conduct any and all repairs prior to the buyer moving in because it is easier for them to work on repairs in an empty house.
There are over 30,000 parts in a new home. Therefore, the propensity to find a small imperfection is great. However, many builders conduct their own thorough inspection before the buyer sees it. Most builders employ a cleaning service to make sure the home is clean prior to the closing.
After the Closing
One year later, it's not uncommon to find settlement cracks in the drywall or nail pops. These are easily remedied and are the responsibility of the builder. A call to the builder is recommended prior to the termination of the one-year warranty.
Tips & Terms: Buying a New Development or Conversion
This is the marketing center for the builder or developer and is used to provide sales assistance to prospective buyers. They often have brochures, floorplans, models, finish samples and other media to provide a good overview of the hiow the finished homes or units will look.
It is very important to either arrange to go to a sales center with your Realtor or contact your agent BEFORE you go to a sales center to make sure your agent can advise you through the process.
This is the list of items that the builder or developer need to complete either prior to closing or with in an agreed time period after closing. Examples may be cracks, paint, caulking, missing items, etc.
Common Construction Terms: Here's a sample of some of the terms the home buyer needs to know.
Baluster: One of a string of small poles used to support the handrail of a stairway.
Base shoe: Molding used at the junction of the baseboard and the floor.
Bracing: Framing lumber nailed at an angle to provide rigidity.
Casing: A frame, as of a window or door.
Cornice: A decorative molding at the top of the exterior walls under the eaves.
Eave: The overhang of a roof that extends beyond the walls of the house.
Flashing: Sheet metal or other impervious material used in roof and wall construction to protect a building from seepage of water.
Floor joist: Horizontal boards laid on edge resting on the beams or walls that provide the main support for the floor. The subflooring is nailed directly to the joists.
A horizontal exterior molding resting directly beneath the cornice.
Head casing: The strip of molding placed above a door or window frame.
Mantel: The decorative facing placed above a fireplace.
Muntin: Thin vertical strips inside the window sash that divide the window glass into panes.
Parging: A coat of cement mortar on the face of rough masonry. Typically used on the exterior of foundation walls to cover up concrete block.
Site Plan: A plan of a construction site showing the position and dimensions of the building to be erected and the dimensions and contours of the lot.
Soffit: The under-surface of a cornice or overhang.