What to do when buying a new home from a home builder!
Often, when buying their first home, people don't get exactly what they want. They're on a tight budget, and they end up having to settle - meaning that they have to live with someone else's taste in home décor, do without the amenities that they'd prefer, and perhaps live in a neighborhood that isn't entirely suited to their tastes.
It's understandable that the idea of a new house could be very appealing. If you're considering buying a brand new home from a custom home builder, there are a few things you should do in order to make sure that the experience is everything you want it to be.
Hire an Agent
Remember, the home builder's agent represents the builder. You need someone to represent your interests. The home builder's agent isn't likely to tell you about any drawbacks to the transaction, and it's in his or her best interests to sell the home as quickly as possible. This means that you might be subjected to high-pressure sales tactics.
If the contract includes a contingency to sell your current home before you buy, again, make sure that you have your own agent. Keep in mind that buying a house from custom home builders in Orange County before you sell may not be in your best interests.
Don't Feel Obligated to Use the Builder's Lender
Home builders will usually prefer to have you use their lender, because it means that the home builder is informed of your personal progress, and you may not be assured of the best deal. The custom home builder may even own the lending company. Consider other sources - your bank or credit union may offer more attractive terms, depending on your history with the institution. If you don't have a long history with a bank or credit union, it's wise to shop around and find a banker or broker you're comfortable with.
Make sure you get a copy of your credit report before you choose a lender, and make sure that the lender guarantees its good faith estimate - this isn't required by law, but a reputable lender will do so.
Get Legal Advice
Before you sign a contract, make sure you talk with a real estate lawyer. A standard purchase agreement may not necessarily protect you as a buyer. Inquire about cancellation rights, and make sure you understand your commitments and liability.
Check the contract for disclaimers and warnings about health issues. If the home builder has used materials that could present health hazards, you'll probably see that in the wording of the contract, and it's probably worded that way because other buyers have had issues that have led to court action.
Verify Options and Upgrades
Decide what upgrades and options you want, and find out if your lender will cover all the options and upgrades. If your selections aren't financeable, then you will have to pay for them in cash. Consider which upgrades you could install yourself - this could save you money. Remember, too, that some contracts will allow the home builder to decide which upgrades you'll receive if you don't submit your request within the required period.
Check out the Builder
Buyers who have bad experiences with home builders are usually very willing to talk about them. Talk with the neighbors, and look at the surrounding homes. Don't assume that one bad review is proof of a bad home builder. You can check the public records to find out if any lawsuits have been brought against the custom home builder.
Also, find out if the home builder sells to investors. Some builders in Orange County sell only to owners who will be occupying the home. If you're buying a new home from a custom home builder in a subdivision, it's probably because you want to be surrounded by people who are like you, not tenants who may come and go, possibly cause property damage, and lower the value of your own property.
Hire an Inspector
Never buy a new home from custom home builders without an inspection, and make sure it's done by a qualified inspector - someone who'll know if there's something you should worry about. After all, this is a significant investment you're about to make, and you want to be sure you get what you're paying for.