To Buy or to Build?

Building a new home has it's perks such as options only limited by your budget, but where will you get the best "bang for your buck"?

Time to upgrade to a new home?  There are 3 ways you can buy a brand-new home

·          buying a house already built on spec;

·         having a semicustom home built as part of a development (you can choose from a set palette of finishes and upgrades);

·         or having a purely custom home designed and built to your specifications.

But don’t get so caught up in the sparkling new paint and granite countertops that you forget to make a good deal!

Evaluate the Pros and Cons of a New Home

·         New homes are typically further from the city center; how much time and expenses will you have commuting?

·         Are you willing to put time into growing a new lawn, and can you wait 20 years for sapling trees to mature?

·         Will the cookie-cutter nature of new subdivisions suite your style??

·         Do you mind the closeness and potential lack of privacy? New homes in subdivisions don't have space for much privacy.

Evaluate the New Neighborhood

·         Check with the developer about potential homeowners' association (HOA) fees and rules; some are very expensive -- and even more strict. They may not allow storage sheds, certain paint colors or finish materials, solar panels or even vegetable gardens. Be sure to find out if the HOA can assess penalties for infractions.

·         Ask whether cable and Internet are readily available and from what companies; your new house will be wired for cable but that does not mean the cable company currently offers service to your new neighborhood.

·         If the development is still under construction, you’ll be dodging giant contractor trucks and facing construction noise at 7 a.m. for a while.

Don’t Skip the Homeowners Inspection

·         Never assume that because a home is newly constructed, it isn’t going to have defects. Make your sales contract contingent on a final inspection by a professional you hire.

·         If it is at all possible, have the home inspected during each phase of building, when potential problems are easier to spot.

·         Know that municipal inspections for code violations are nowhere near as thorough as an independent professional inspection is.

Protect Yourself with Warranties

·         All new homes come with an implied warranty from the builder stipulating that any major defect of the structural integrity of the home must be repaired.

·         You should ask for a builder’s warranty for a period of time following move-in (a year, for example) that covers any defects in craftsmanship.

·         Preferably, this warranty should be backed by insurance.

·         Make sure any warranty you receive explicitly states what is covered and what isn’t, and what the limitations for damages are.

·         For extra peace of mind have your real estate attorney again look over the warranty to make sure it’s covering your concerns properly.