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New Construction Buyers Guide I have put together a packet for our new construction buyers to help you understand the steps in buying a custom home. For your convience I have a New Construction Buyers packet in print for buyers to review. If you would like a copy or have questions please feel free to call or email. New Construction Experience I have helped develop and /or been a part of the following new construction subdivisions:Arbor Lake, Barkley, Corinth, Eastgate, Garden Gate, Oakridge, Oakridge Lake Estates, and Riverview. I am currently involved in the following NEW subdivisions: Vista Ridge Town Homes, Tuscany Town Homes and Westridge. For more information on these new subdivisions look under Becky’s Builders or contact me by email or phone. I have also represented numerous builders for spec and custom homes. New Construction Process The following pages will explain the process in buying new construction from meeting with a REALTOR to moving in. For more information please call or email. Thank you. Meeting With Your Agent During one of our first meetings there will be items that will be discussed. Some of these items are: Pre-Approval from Lender Wants/Needs for House Property Location Reputable Builders During our meeting we will also go over in detail the new construction process which is partially laid out in this packet By the end of the meeting you will hopefully have : *A better understanding of buying new construction *List of available lots and their restrictions *List of reputable builders you would like to interview *Better idea of style and size of home you like Pre-Approval From Lender Having pre-approval helps speed up the process, by showing the builder you are capable of buying the house once it is completed. The builder will be the one who carries the new construction loan, you will acquire a mortgage loan. Also note that you DO NOT want to use up the whole loan amount in the beginning stages of the contract. You may have upgrades or changes that can increase your loan amount. Needs & Wants Think about what you feel you really need in your house and things that you might like to have. If you are going thru with building this is your time to pick and choose and look at all your options. Location, Location As important as the house is the location. There are numerous lots available. However some lots have restrictions on the amount of square footage, amount of brick/stone and even builders. Some lots that you may think are available are already owned by a builder, so you will have to choose if you want that lot & builder or another lot. Also note that in most cases the builder will actually purchase the lot for you. Builders Choosing a reputable builder is very vital in the construction of your house. Your house will only be as good as the builder who builds it. As with everything else builders have expertise in areas, some for building large houses, others for starter homes. Choosing a builder who is familiar with your style is important. House Plans House plans are available almost everywhere. You may find them on the internet, books, magazines and anywhere else. The builders also have a variety of plans that you may be able to view. If you have been thinking of building for awhile you probably already have a few floor plans picked out. If not now is the time to start looking. You will need to have the plan(s) you are highly considering ready for when you have your interviews with the builder. This will help him get an idea of what you are wanting, any changes that you may want in the layout and pricing. You should note that some builders tend to build the same type of house(s) with few changes/modifications. If you are considering a certain house or builder you need to take this into consideration. What should I look for in a house plan? *General Flow of the House *How is it set up for dining *Number & Location of Bedrooms *Number & Locations of Bathrooms *Location of Laundry Hook-up *Room Sizes Interviewing & Choosing A Builder I will set up interviews with at least 3 builders that you choose , even if you think you would like to have a certain builder it is sometimes best to look at all your options to make an informed decision During the interview here are a list of things that you should look for: Compatablility with the Builder Does he listen to you? References What is Subcontracted & with who? What is their REQUIRED earnest money? The construction timeline Lots they have available The price per square footage & what is included Upgrades & Changes Availability and the additional funds required. Ask for a specification sheet from each builder on the house plan you are considering After the interviews, review what each builder had to offer you and what if any compatibility you had. Did you feel more comfortable with one than the other. Items can be changed compatibility can’t always be. Once you have made the decision as to who you think would be the best candidate for your house we can set up another appointment to discuss in further the construction. Contract For Purchase After you have chosen the lot, plan & builder it is time to write an offer to purchase the house once its completed. It is best to have a meeting before writing the offer with the builder to go over the plan, discuss any changes or upgrades that you know you want and the estimated completion date. Changes/Upgrades If you know of any changes or upgrades to the house or want to increase an allowance now is the time to do so. You may make changes later but if you do them in the beginning there will be no room for error later. Spec Sheet This is the most important paper you need to look over. This is what is INCLUDED in your house. This is what you are paying to have done. If you have any questions they need to be addressed. Timelines It is best to get a general timeline from the builder for when different stages of the construction are started and completed. You may also request a Decision Timeline for you, this is when you need to have your decisions made for certain items for the house. Things To Consider There are a few things that you may need to consider with the construction of you home. Timeline When you get a construction timeline it is tentative, things happen that could delay the progress. Delays could result from: items breaking, weather, sub contractors schedule, back orders and numerous others. Sheet Rock Warranty When it is time to pick the interior paint of you house a well known fact with builders is that anything other than flat paint VOIDS the warranty on the paint & sheetrock. After the Fact Changes If you decide after framing that you want to move a wall to make a room bigger or smaller, or want to change a window size, it will cost you. Even if you don’t think its “adding” to the house it is. EVERY change may cost you money. As the old saying goes: “Time is money” Construction Once construction starts from the ground up you may get excited and want to visit the site everyday. Normally this is allowed however a couple rules need to be followed. One rule is that due to liability reasons you are not allowed on the site when the builder and your agent is not there. The second rule is to try and give a 24 hour notice, this again is for liability reasons, so the builder can try and pick up any items that may be a hazard to you.With your agent there when you visit the site this helps in decision making and discussion so there is a paper trail and any forms that need to be signed are. During this time you will also be making the decisions that need to be made. It is best to try and make them before the timeline in the event the builder is ahead of schedule or your item needs to be ordered or are out of stock. Try and have an idea as to where you want outlets and such. There will come a day when you need to make these decisions. Allowances When you are picking and choosing your allowances please remember this includes sales tax. Many buyers don’t think twice about the taxes but builders are charged this and therefore its goes into your allowance.(Example: You have a $1,000 allowance for appliances, you pick out $999 worth of appliances. The builder goes to purchase the appliances and after tax the bill comes to $1,074. You have gone over $74 which will be charged to you.)When you make a decision on your allowances the following information needs to be given to your agent to forward to the builder:*Store*Make & Model* Item #. If you go over an allowance you may need to pay up front to builders or it may be added to the purchase price of your house.You may also use part of allowance from one towards another. Upgrades If and when you decide that a change needs to be made to the house or you would like to upgrade something there will be a charge involved. A CHANGE ORDER will be filled out with the cost of the change. You will either have to pay for the cost in the full amount or a certain percentage upfront. This is normally nonrefundable. Most builders will stop work till the paperwork is signed and any amount due is paid in full before returning back to the site. During this time we will keep you informed on the purchase price of the house so that when it comes time for closing you will not have any sticker shock and will know exactly what raised the price. Walk Through Seeing your house come to completion is an exciting time. Your dreams are almost complete. Before closing you will have to complete a walk thru. This is done so that you may look at every inch of the house and have the builder take care of any last minute things or repair anything that you may notice. Even though you may be in love with your new home and you have built a friendship with the builder now is the time to “nit pick” every little thing you are not satisfied with. Even though you get a 1 year warranty some things are not covered that are during a final walk thru. A “punch list” will be completed of items you are not satisfied with and given to the builder. They will complete these items prior to closing. If you so choose you also have the right to hire a home inspector to inspect the home. Closing The day has come to call the house yours. If you have ever purchased a home before you will be familiar with the closing.You should note that when you pay taxes at closing on the house it is generally for the lot only. The house has not been assessed yet. Most title companies try to estimate your taxes , however if you are escrowing your taxes in your monthly mortgage payment you may see an increase the following year due to your taxes going up. Your 1st Year You’re first year should be of good memories in your new home. As mentioned earlier you will have a 1 year warranty on your new home. During this time if you have items that are not working properly or problems with the house you will need to contact the builder for repairs. At my office I have a list of “general rule” on specific items in your house. Also included is a copy of a Warranty Addendum that is included with your contract. Please review these items, they clearly state what is covered in your warranty. Some items only allow a 1 time repair to; an example would be sheetrock, while others may be covered by the manufacturer. In Closing We hope this helps you get at least the beginning steps of understanding to building your new home.Again if you have any questions or would like a copy of my New Construction Buyers packet please call or email.As with all my clients I will sit down with you further andexplain in detail the process and help guide you thru andanswer any questions you have.