Hidden Cost of new homes that burn home buyers
Most of the home buyers think that new construction home buying process is very simple. They think that buying a brand-new house is a good choice rather than buying a used home. But it is not so.
People feel the maintenance cost of new house is minimal, its construction materials, systems and the appliances must be up to code and energy efficient.
Also, the floor plans and the amenities must meet the requirements of the modern home buyers and the house must be in a move-in-ready condition.
New construction home buying process sometimes becomes a daunting task. A newly constructed house has an emotional appeal for the buyers those who like the idea of living in a place which is completely clean and potentially perfect.
Whenever you plan to buy a new house, you need to consider the new home construction fees. The hidden cost of new builds is sometimes a lot.
Most of the buyers do not realize that a new home often have many hidden costs. If you are buying a new construction from the builder or the real estate developer, here are some points which you should look out for to make sure you are spending your money wisely and there are not any unpleasant surprises.
The Hidden Defects in the houses
Just like an older home, a brand new home can have hidden defects (also called “latent defects”) that require expensive repairs. Heavy rains can reveal a lack of waterproofing or grading which leads to leakage or flooding. A weak slab could crack. Siding could have come off.
The wood floors could be stained. Your toilet could overflow. Electrical wiring could have been performed improperly. Any question that you may be afraid to find in an older home can also occur in a brand-new home.
Buying new construction home negotiation is not that easy. Arrange for two inspections at separate times to ensure that your new home is truly free of flaws and moves in form.
To protect you, study the credibility of the contractor before you make a purchase. And don’t miss a thorough inspection by an independent home inspector who is not associated with the owner. Ideally, you’d have one inspection after the home has been built, but before all the finishing have been put in, when some things are easier to identify, and another inspection just before your loan closes and you take possession of it.
Also, find out what kind of warranty your home comes with and read it carefully before you buy your house. You may need to rely on that assurance if there are any latent defects, because your homeowners ‘ insurance policy may not cover them.
Different aspects of the home may be shielded for different lengths of time, so make sure you are aware of these limitations. Report any issues to the contractor as soon as possible
Missing the Necessities at Indoors and Outdoors
New homes don’t come with everything you need. It is quite normal for them to neglect amenities such as indoor appliances and window covers, and outdoor decks, fencing and landscaping.
Each of these missing items could be a major additional expense. Once you make an offer, ask what is included in the price of your house, take note of what is missing, and do some research to find out how much these things would cost.
Make sure you include these expenses in your budget in the new construction home buying process. If you can’t afford to pay for it out of your pocket, getting the contractor to pay your closing costs could free up the cash you need for blinds, washer and a dryer.
If that doesn’t work, look for a new home that comes with all the essentials, or consider a property that’s almost brand new and just lived-in enough that the previous owner has installed all the missing necessities. Hence it is difficult to buy new construction home negotiation.
The Pricey Upgrades
In the new construction home buying process, showy design you’re going to visit will usually have all the improvements that the designer has to sell, from hardwood floors and granite counters to bay windows and spacious bathrooms.
Knowing what you could have prompted you to spend significantly more than the base price that originally attracted you to the property and the culture. The price difference between the basic model and the model with all bells and whistles can be tens of thousands of dollars.
Additionally, when you buy upgrades through the contractor, you might be able to pay more and have a limited selection compared to making improvements yourself. You also need to consider the value of future resale. Make choices that appeal to a wide range of buyers and will not result in your home being over-or under-improved for the region.
Many builders do include premium features in the standard model and include them in the base price. Just make sure you know what you’re looking at before you go home and fall in love with something you can’t afford.
The Uncertain Future
You really don’t know what you’re buying into in a new community. Who are your neighbors? What’s going to be built on the vacant land next door? How good is the new school system going to be?
How are these unknowns going to affect your quality of life and the value of your home resale? “New construction” is not associated with “low crime,” “friendly neighbors” or “excellent education.” It’s OK to take a chance on these unknowns.
Only know that you have a chance. Conditions may also shift in existing communities, but they may give you a better understanding of what life is going to be like in your new home, compared to a quarter that is changing.
Lack of Representation
If you buy a new home, you’re not allowed to go unarmed to the sales office. The Builder’s sales agent represents the Builder— not you— and any financing that the Builder may have arranged will not necessarily be the best available financing.
Do your research and get acquainted with the different types of mortgages available and the interest rates available to borrowers in your market.
Then, based on your research, get your own real estate agent and your own lender to make sure you get the best home price and the lowest interest rate and mortgage fees.
The Bottom Line
Don’t make any assumptions about what you’re going to get in the new construction home buying process. It can be more complicated and come up with a lot more questions than you’ve been thinking about. Nonetheless, if you prepare for the experience you will know how to take care of your best interests and spend your money wisely.