Top 7 Mistakes Buyers Make: The Ultimate Guide to Buying New Construction.?
Mirella Kaell
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Top 7 Mistakes Buyers Make: The Ultimate Guide to Buying New Construction.?
Introduction
Buying a new construction home is an exciting journey, but it can also be fraught with pitfalls if you're not careful. In this guide, we'll explore seven common mistakes that buyers often make when purchasing new construction properties and how you can avoid them. These tips will help you navigate the process with confidence and ensure you make the best choices for your dream home.
I. Believing you cannot negotiate
One common misconception is that there's no room for negotiation when buying new construction. However, this couldn't be further from the truth. Builders are often open to negotiation, especially on certain aspects like price, upgrades, or closing costs. Don't hesitate to discuss terms and seek a deal that benefits you financially.
II. Forgetting to budget for things not covered
New construction homes typically come with a base price, but it's essential to budget for additional expenses not covered by the builder. Landscaping the backyard, installing blinds, or adding appliances are just a few examples of costs that can catch you off guard, if not included in your budget.
III. Only considering the builder's lender
While the builder's preferred lender may require/offer a pre-approval, it's not mandatory to commit immediately to them. Shopping around for mortgage options can lead to better deals or lower interest rates. You can always bring in your lender later to secure the most favorable financing terms. We have in-house lending options for different needs and scenarios. To learn more book a call in the bio.
IV. Not diving into the builder warranty & timelines details
Understanding the builder's warranty and project timelines is crucial. Carefully review the warranty's terms and conditions to ensure you know what is covered and for how long. Additionally, having a clear picture of the construction timeline will help you plan your move-in and avoid surprises. Also be sure to review any Home Owner Association (HOA) documents, if applicable, so you know what is covered, projected monthly costs, and what the rules and expectations are.
V. Getting too many upgrades with low ROI
It's tempting to splurge on upgrades, but not all of them provide a good return on investment (ROI). Focus on improvements that add long-term value, such as hardwood flooring, which can be engineered, and durable quartz countertops. Be cautious about overspending on items like kitchen cabinets or unnecessary extras.
VI. Not getting your own home warranty
In addition to the builder's warranty, consider obtaining a separate home warranty. These warranties provide coverage for various home systems and appliances, offering peace of mind beyond what the builder offers. Renew this warranty annually to ensure ongoing protection.
VII. Not bringing in your Realtor
One of the most significant mistakes you can make is not enlisting the services of a Realtor. Builder representatives work for the builder's interests, and that’s their primary focus. A Realtor will represent you, help negotiate terms, navigate complex paperwork, and provide valuable support throughout the process. And the Realtor’s compensation comes from the builder's marketing budget, making it a win-win. It’s important to discuss your options with your Realtor, and plan to meet them at the site, the first time you visit to explore your choices.?
Be sure to let your Realtor help you figure out the builders and offerings, best suited for your lifestyle and needs. In the San Francisco Bay Area, for example, we have a multitude of builders, sites, and communities, with different lifestyle, architecture, and location options to choose from.?
You may want to choose from…
Singles or younger adults: Modern, hip, multi-level townhomes, with fantastic views and amenities, in the center of the action and close to public transportation and major downtowns
Raising a family: Awesome large multi-generational homes with amazing indoor-outdoor living architecture, breathtaking views, in top school districts, and close to major employers and easy access to freeways
Making the most of the golden years: More remote, sprawling, spacious, single-level, lakeside communities, with tennis, bocce ball, pools, and pickle ball courts, for active adults 55+. It all depends on your individual lifestyle and needs.
Conclusion
Buying a new construction home can be a smooth and rewarding experience when you avoid these common pitfalls. By negotiating wisely, budgeting for additional costs, exploring multiple lending options, understanding warranties and timelines, choosing high-ROI upgrades, securing your own home warranty, and enlisting the help of your Realtor, you'll be well-prepared to embark on your journey to homeownership. Remember, knowledge and informed decisions are your greatest allies when buying your dream home.
For more information on this topic and more, tune-in to my podcast, Chat #150. Thank you for listening!?
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?? Mirella B. Kaell M.S. REALTOR?? GREEN?? KW Bay Area Estates, Los Gatos, CA DRE 02057622 408-404-8156
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