Before the market showed signs of improvement, it wasn’t feasible or practical to buy a newly constructed home. With the current lack of inventory of single family homes, it’s becoming more of a necessity. In Towne Lake, for example, there are only 137 single family homes on the market for sale which is fantastic for sellers but problematic for buyers. With homes that are priced to market selling in one to two weeks, it is very competitive for buyers to get the home they want. Buying a new home from a builder is more feasible now since appraisals are improving and the “post-crash” builders can make sufficient profit from the good deals they are getting on bank foreclosed home sites.
Below are some things to consider when buying new.
PROTECT YOURSELF BY HIRING AN AGENT: You should protect yourself when selecting a builder and a new home community. The number one thing to do is "HIRE YOUR OWN REAL ESTATE AGENT." Having an understanding as to the price direction in the community and recent sales prices and buyer incentives is essential to you getting the best deal. When interviewing a buyer’s agent, make sure they have sold new construction and worked with builders and understand the new home buying process. It’s an added bonus if your agent has experience building homes. They may be able to spot issues during your home’s construction that might go unnoticed until years later. Additionally, you should have your own representation since the builder’s onsite agent is paid to represent their builder’s best interest, as your agent would do for you. The good news is, your buyer's agent will be paid by the builder to represent you and look out for your best interest.
HOW TO PROTECT YOURSELF WHEN YOU HAVE A HOME TO SELL FIRST: When your current home has not sold and you are purchasing a new home, it is important you discuss with your agent what type of contingency needs to be included in the new home contract. The contingency will protect your earnest money should your current home not sell. We don’t recommend contracting to purchase before at least having your home on the market for an “at market” price. Knowing with certainty where your home should be priced is a job best suited for an agent familiar with your neighborhood and the current market conditions.
LENDERS: Don't be too quick to use the builder's lender without first shopping rates and fees. It always pays to shop around and consult with your agent for a recommended lender.
PROTECT YOUR EARNEST MONEY. Before signing a contract, ask questions about the removal of contingencies and your cancellation rights. You could make yourself legally bound to purchase the property and at the very least your earnest money could be at risk.
NEW CONSTRUCTION UPGRADES: Make sure you have a solid understanding of what building materials will be used in the standard model of the home you select. Because upgraded building materials can be pricey, you may want to know exactly what your new home will cost with all the upgrades before you move forward with a contract. If you don’t need to include all the upgrades in your loan amount, you may save money buying the builder’s base model and then add the upgrades yourself over time.
BUILDER'S REPUTATION: As an added check of the community, ask the neighbors that have already bought to find out if they are happy with the subdivision and the builder’s quality and follow through on warranty items. Also, verify how many homes, if any, have been sold to investors. It may be important to know if your chosen community has a great deal of rental properties.
HIRE A HOME INSPECTOR: Always, always, always have your own home inspector. Hire a licensed, accredited individual to perform these inspections. A pre-drywall inspection would be very advisable as it’s the last chance to see how the plumbing, electrical and framing were completed. No builder is perfect and construction workers are human and make mistakes. A good builder should correct any problems found by the inspector without hesitation. Consult your agent to get a good recommendation on an inspector.
New homes being built in the most desirable parts of Metro Atlanta are actually selling again and quickly. Single family homes in Downtown Woodstock, for example, are moving quickly now and with the finite availability of home sites in walking distance to Downtown, the prices are on the rise.