6. Choosing Options and Upgrades
The less expensive the base price of the house is, the more options and upgrades you can add without fear of overpricing it for the neighbourhood. Options are items the builder installs during construction, such as adding usable space like a sunroom or a powder room. These features can add the most to the resale value of your home. Upgrading means selecting quality above "builder standard" such as carpeting, ceramics, detailing, kitchen fixtures and appliances. Be sure to take advantage of builder incentives that offer free upgrades, or credit off the sale price. Remember, you can add a deck, finished basement or landscaping later and sometimes for less money.
It's possible there may be room for negotiating price, upgrades or options. For example, you have some scope for negotiating with the builder if s/he has completed a home, but has yet to sell it. Also, some "premium lots" are priced higher and are sometimes saved to be sold last. Keep in mind that typically, all lots cost the builder the same, so be sure to inquire about lot pricing. Builders may offer discounts or special financing to help close a sale.
8. Be Sure the Contract Works in Your Favour!
When spelling out the particulars of an agreement with your builder, ensure you protect yourself by having safeguards written into the agreement, such as:
- placing your deposit in escrow
- detailing your upgrades
- allowing you access to the construction site to check on progress
- a 30-day advance notice of the closing date
- an explanation of what the fine print means in the warranties of the builder and manufacturer
9. Financing - What's Best for You?
Some builders, especially in high-volume communities that place large numbers of loans, can offer special financing packages. However, because "home loan" lending is highly competitive, you have many financing choices other than those being offered by the builder. Shop around for everything, from rates to lender fees. Appraisals, inspections, surveys, attorneys and closing fees can vary as well.
10. Just Because it's New... Does not Mean it's Perfect
Yes, it's new, and typically it's built with modern materials that are durable, low maintenance, stronger, quieter, and safer. But because nothing is perfect, even if it's new, consider hiring a reputable, licensed home inspector. Then create a builder "punch list" from what you've learned, to address any problems before closing. Consider budgeting for items to be modified or added later on. Many new home buyers use a real estate agent to help them negotiate the best price and terms with the builder.
Buyer Advantages Your Builder May Not Reveal!
Here's a fact that you may not be aware of. Some builders have newly-constructed homes available for immediate delivery. Usually these homes are ready to move into within 30 days. Even if some builders are eager to sell, they'll probably keep that knowledge to themselves. Immediate delivery homes are often available for various reasons:
- the community, where new homes are being constructed, is nearly complete, so the builder proceeds to have the on-site-contractors build "spec" homes (homes built on speculation for sale) on the last lots
- the model home is for sale
- the contract on a home has fallen through
- for buyers who are relocating, or who have sold their previous home and need one to move into quickly
Immediate delivery homes may be more desirable because sometimes builders offer financing incentives or free options. This may be done in place of chopping prices to appeal to buyers purchasing later in the building phase. An immediate delivery home is an advantageous way to purchase a home if you need to move in quickly, or need a physical space to walk through and see before you sign a contract. Be sure to inquire.