In our lives, everyone dreams of having a brand new house. There is nothing quite like taking possession of a home where no one has lived before! Your kids' pictures require the first nail holes to be put in the wall. You get the first shot at landscaping and decorating the way you want without having to undo someone else's questionable taste. And everything in a new house sparkles and dazzles you.
There are a few things to keep in mind to make sure that your new home buying experience is a great one.
First, before you start seriously looking, get pre-approved for a loan. This will tell you how much the lender thinks you can afford and will be a good benchmark against the builder’s lender. Think about how the payment at different interest rates will impact your lifestyle. When you go looking at homes, have a max price in mind and stick to your price range. Don't set yourself up to be a foreclosure statistic! If you have a $100,000 income, looking at $1 million homes might be an entertaining way to spend an afternoon (for you, not the realtor), but homes that are way out of your price range pose a risk for you. It's easy to be seduced by a beautiful home. Model homes are set up to be appealing, while the sales people are always convincing when they tell you that you and the house are made for each other! Having a realtor represent you with the builder is good advice and will help make sure you get the best deal possible. A realtor can represent your interests at no cost to you, because the builder pays the fees.
Before committing to buy the property, it's a great idea to get a few good faith estimates (GFE's) of the mortgage costs, including the APR (annual percentage rate), as well as the terms. Builders usually offer financing that might at first glance appear to be the best deal, but having some other lenders lined up for comparison might reveal hidden fees and give you some negotiating power.
Often, builders will include upgrades to use their lenders. Shrewd but polite buyers who have a realtor representing them can often negotiate an even better deal.
Though the model home may look flawless, it is a good idea to ask the neighbors about their experiences with the builder. It's important to know what kind of problems they’ve had and even more important to know how the builder has responded and how long it took them to respond. If you see too many red flags, it's time to reconsider. If you're in love with the house, breaking up is hard to do - but your love could quickly turn to hate if you are stuck in a house with lots of problems and poor support system. Here again your realtor can offer advice.
Once you've made an offer on the house, make sure to pay for a home inspection from an independent firm. Just because the home is new doesn't mean it's perfect. The builder may say he will stand behind certain types of problems that come up in the first year, but an inspection will bring them to light. Fifty perfect of new home inspections uncover a flaw in design, materials, or workmanship, which could prove costly to the homeowner later on.
If you have bought a partially completed home or one you picked from a plan, you will probably drive by occasionally to observe the progress. It's a good idea to take some pictures of the progress that might later document problems in construction. (They will also serve as a memory of your largest purchase) Some excited friends who stalked the site of their new home noticed that something did not seem right when the foundation was laid. They weren't engineers, so they didn't know what. Their photos helped the builder troubleshoot a problem with the concrete and later alerted the home inspector to test for leaks in the foundation.
Before you close on the home, walk through the home with the builder and develop a punch list of problems that need to be fixed. The builder will mark these items with tape so that his crew will know what to fix. Once the repairs are complete, it's a good idea to have another walk through. The builder may pressure you to close before everything is fixed but once you've closed, you lose leverage, so don't give in.
If you have any questions about real estate, feel free to contact your local metro Denver real estate professionals, The Bandy Team! Our team will guide you through all phases of the home buying and home selling process in Denver. Let us show you homes in some of the fine communities of Aurora, including real estate in Saddle Rock, homes in Heritage Eagle Bend, or property in Tallyns Reach.
We are here to help you find your dream home and will guide you every step of the way!
Until next time,
Marianne Bandy, Team Leader
The Bandy Team
Keller Williams Park Meadows