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New Construction: Don't Go It Alone
Whether you are simply visiting new construction sites -each offering various floor plans and elevations based on a builder’s model home or going the full blown custom home building route, you will want to be represented throughout the process. Remember the site agent works for and represents the builder. Your REALTOR® can help you not only locate building lots or acreage but also help you make informed decisions throughout the home building process. The cost to you is nothing. Any compensation earned by your REALTOR® has no impact on the final cost of the home. You will not get a price reduction if they do not have to pay our fees. Builders desire, expect and encourage REALTOR® participation. However, you must have your agent with you from the very first visit.
Your experienced agent knows what you should receive and what extras might be available to you. Your agent knows you are building not only for today but for tomorrow. Questions concerning site location, builder, design and décor are important. With your real estate agent you are represented. Your agent’s experience, knowledge and reputation provide you strength and leverage during the home building/purchase process.
Here are a dozen things you need to know before buying new construction:
1. Pick a reputable builder. Many enjoy good reputations. Make sure you compare and ask for references from other clients. Visit the neighborhood and talk to future neighbors. Their experience can help.
2. There is usually very little room to negotiate builder contracts in a seller's market. There will be a hefty deposit required including a percentage of the cost of options you buy. Incentives may be offered if you use the builder’s preferred lender and/or title company. In addition, builder sales people cannot commit to anything. If they do, get it in writing. Conversely, in a strong buyer's market, builders are very willing to negotiate to include discounted or free options, price and lucrative mortgage terms (if you use their affiliated mortgage company). Be careful of this last one though, an offer too good to be true usually is.
3. To the extent possible, make sure you know all your options and cost estimates before you ratify a contract. Add-ons after contract will cost more and could influence the delivery schedule. Important elements to consider are window options (type), bricking the whole house, wiring for smart homes (telephone, internet, audio and video), heating and air conditioning upgrades and appliance options.
4. You might want to consult an architect and/or a professional decorator to help you. Always be thinking resale. Potential future buyers might not think highly of your special modifications.
5. When your home is completed, it will not look like the model home. Builders employ professional decorators for their models and spare no amount of creativity (and expense). Decorating makes builder homes sell.
6. The builder will not commit to a specific delivery date, but rather an approximate range of dates for your home to be completed. There are just too many variables in the construction process. You need to be flexible as you will probably only get a two to three week notice and that occurs when the local government grants the builder an occupancy permit.
7. Expect unfinished work when you close on your home. The builder usually has a certain period after closing to complete all the finishing work.
8. It is usual for builders to use subcontractors to do the work. The quality of workmanship depends on the experience and skill of the subcontractor and the construction supervisor. Construction supervisors cannot catch every mistake made during construction as they are managing the build of several homes simultaneously. You will have a chance to remedy these.
9. Expect delays. These are unforeseen and include weather, subcontractor and material shortages, and may include overly optimistic schedules by the builder.
10. Expect issues after occupancy. These are normal and usually minor in nature. It will take the builder some time to get to them all. Any major issues will usually be attended to quickly (severe leaks, appliance failures are examples here). Builders offer a one-year construction warranty and a homeowners warranty covering appliances and major systems.
11. Before or during the final walkthrough, be sure to inspect the grading around the home and mechanisms to channel water away from the downspouts. The biggest issue causing basement leaks or moisture has to do with improper grading and not properly channeling water away from the house.
12. Finally, there will be many questions and concerns during the process. Always put questions, requests and complaints in writing and be sure to copy the highest levels in the company you can find so you get the proper attention. You always need a document trail. In summary, builder references, an independent inspector and a knowledgeable REALTOR® are a few of the important elements assuring your success and satisfaction when buying new construction.
The 5 Step Home Building Process
1. Decide on your budget.
2. Find a location, location, location!
3. Choose a builder.
4. Choose a design.
5. Build your home.
The 10 Phases of Custom Home Building
1. Research -The first step in any major project is to learn as much as possible about the subject at hand. Building a custom home is no exception. However, a surprisingly large number of people seem to think that anyone can design and build the home of their dreams without first spending the time to thoroughly learn what is involved. Not spending sufficient time to learn what’s involved in the home building process is all too often a recipe for disaster!
2. Pre-Construction -After you settle on a suitable design, you will need to identify all of the materials and finishes that you want to go along with it. There are literally thousands of items that go into the construction of a new home and every single one of them must be specified by someone. Those items not specifically mentioned or clearly defined will almost certainly wind up being something other than what you thought they would be. Be sure that you put everything in writing and in as much detail as necessary to create clear, complete, and accurate construction plans and specifications. Besides their importance in building your new house, these documents will be needed in order to create an accurate budget. You cannot realistically expect to know how much your house will cost to build, until you know exactly what you are trying to construct.
3. Site Work -Now we're having some fun! Trying to find water 300 feet below the surface and counting the dollars in every dry foot along the way. Paying to clear all those big, beautiful, trees off your premium priced wooded lot. Buying tons of fresh, clean, stone to spread on the ground for a construction entrance so it can get buried under the mud from your once wooded lot. Digging out tons of earth to construct the foundation of your new home only to find that the water you had been looking for 200 feet away and 300 feet down was only 6 feet under the surface the whole time. If you are prepared for what may happen, this can be a very exciting time during the building of your home. You will finally get to see where your house will sit, how big it will be, and what views you will have. This is the first physical work on the long and sometimes bumpy road to realizing your dream. A home is only as good as the foundation upon which it rests!
4. Foundation -The foundation is the structure on which the rest of your house is built. Whether it is stone, concrete, steel, or wood; a basement, crawl space, pilings, or slab on grade, it needs to be strong and square and dry. This is not a good place to try to save money. Be sure the footings are properly sized and reinforced for the loads that will be carried. Build the walls to be able to withstand the forces of the earth that they will need to hold back. And, invest in a waterproofing system that will protect areas below grade.
5. Framing -Many people consider the framing stage to be the most exciting. When the framing crew finishes the first floor deck, you will finally be able to take your first walk around your new house. It is an indescribable moment. Framing will take anywhere from a week for a small house, to several months for a larger one. You will be able to watch the basic structure take shape very fast. Your home will suddenly have walls, a roof, and windows. This is also the time when the first on-site changes will probably take place. Room sizes and layouts become much easier to see in 3 dimensions. Even the best architect frequently finds something that didn't turn out quite the way it was envisioned on paper.
6. Rough-ins -As the individual trades converge on your house, things will appear to slow down considerably. In reality, a lot more work is actually being done on your house during the rough-in stage, it just isn't as dramatic. During the next several weeks or months, dozens of people will be installing the inner workings of your house. Plumbing, heating, air-conditioning, lighting, security systems, central vacuum lines, television cable, entertainment systems, computer networks, exhaust fans, phone lines, fireplaces, and scores of back-ups and nailers for things yet to be installed. This may not bean exciting time, but it is very important that everything and everybody be properly coordinated. Take the time to get things right at the rough-in stage, and you will save yourself lots of aggravation later on.
7. Interior Finishes -When you are absolutely certain that everything has been roughed-in properly, it is time to finish the walls, install the doors & trim, hang the cabinets, put down the hardwood flooring, install ceramic tile, and cover everything that doesn't move with either paper, plastic, or paint. This is also just about the time that you start worrying about the fact that your existing house still hasn't sold and the kids are going to have to change schools midterm. Well don't get too concerned yet. There is still a lot of work to do before you will be able to move into a completed home. After the paint, the next things to be installed are the light fixtures, counter tops, appliances, plumbing fixtures, mirrors, shower doors, security systems, door knobs, towel bars, and toilet paper holders. Most of these things will even be installed in the correct locations.
8. Exterior Finishes -While work is progressing inside, there is much to be done outside as well. Keep in mind that almost all the exterior finishes need to be designed and installed to keep out the elements and protect the main structure for as long as possible. The exterior finishes might be any combination of brick, stone, stucco, vinyl, aluminum, concrete, or wood. Before you make a final decision, you need to take into consideration the weather conditions in the area where you are building and how much time you will be able to spend on maintaining the outside of your house. How much will you really save by not using brick if you are going to have to paint every few years?
9. Landscaping -Landscaping can tie your house together with the land. Properly placed trees can help keep your house cooler in the summer and protect it from cold winter winds. The walks, patios, pool, walls, pond and plantings that make up a landscape can easily represent a sizeable expense, yet they are very important in making a new house look and feel like a home. All too often, because this is one of the last phases of the job, people forget about the importance of blending the structure with nature. Be sure to make a reasonable budget for landscaping and try very hard not to spend it on something else.
10. Completions -Even when you think the project is just about complete, you will still have some of the most frustrating work ahead of you -the punch out work. Replacing those two broken tiles, hiding that bad drywall seam, fixing the squeaky floor in the dining room, or getting the plumber to come back and move the powder room faucet up to the master bath, where it belongs, just seems to take forever. Most likely it won't be very long before you will need to make the switch from learning how to build your home to learning how to repair your home. In the meantime, the best advice I can offer you is to gather as much information as possible before you build and seek out the advice of a seasoned REALTOR® who can help guide you along the way!
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