Major Red Flags When Buying a New Construction Home

Buying a new house is exciting - a little stressful, but overall exciting! Many people have the dream of buying a brand new, never lived in, comes under a warranty NEWLY BUILT home of their own. New Build homes are beautiful and in many ways they are blank slates (with pretty upgrades) that you get to customize and make your own.

There are many PROS to buying a NEW CONSTRUCTION home, especially around the Houston area. But those will be listed in another article.

This one is about the RED FLAGS that I have seen from BAD EXPEREINCES with my buyers.

RED FLAG: Sales Person Does NOT know anything about the builder Warranty

THIS is a HUGE RED FLAG! Every Good Quality Builder has a Builder Warranty, and they should be able to tell you exactly how their customers file claims to get things repaired. Most builders have a 1-2-10 Warranty but it varies. Things like structural work and major appliances should be covered in the warranty. Cosmetic items are usually not covered.

If the sales person doesn't know the warranty and isn't able to explain it to you clearly, then most likely the company doesn't actually have a warranty.

RED FLAG: Builder Preferred Lender is hard to reach or does NOT respond

This one always makes me scratch my head - WHY wouldn’t they responsive and hard to reach? Do they NOT like doing business? It’s weird, but it happens. This is a red flag because the lender needs to be responsive to answer your questions and get you the $$ amounts in a timely manner. If they don’t, they are dragging out the process for some reason behind the scenes that makes me question the integrity of the business - maybe they aren’t doing well as a business?

RED FLAG: Answers to Questions change or seem to be different each time asked

The answers to your questions should be consistent and major items that were sold to you in your very first appointment should not be changing. Inconsistency is a RED FLAG!

RED FLAG: Builder Does not want to do repairs from Inspection

ALWAYS hire your OWN Independent Inspection of the home BEFORE your final walk through of the home before closing. The builder SHOULD want that inspection report so they know the things that need to be repaired or replaced. If you hear “we don’t need the inspection report” OR “inspections are just opinions so we won’t be doing these repairs” RUN!

Yes I witnessed a builder say these things to a client and we did not end up closing on the home because of it.

RED FLAG: The Builder Sales person is encouraging you to NOT work with a Realtor

If the sales person is telling you that you will get additional $ or incentives for saying you are not working with a Realtor, know that the real issue is that sales person is the one who is going to get more $$ if a realtor is not involved. How do I know this? At one point, I worked with a Developer that did just this. If a realtor came along with the client, I earned 2% of the deal. If a realtor was not stated on the contract, I earned 4%. The client did NOT save a penny by not being represented BUT they also asked less questions and probably should have had a Realtor helping them. This is Why I liked working with Realtors when they came my way, but other sales people did not.

Final Thought: Always look up and read reviews for the builders you choose and use a Realtor to represent your best interest.