Building a new house is an exciting project with a steep learning curve. There is much you need to know before embarking on building a home, but we are here to help you every step of the way! We ensure surprises are kept to a minimum, so you get to move into your dream home!
Here are 4 Must Know Tips before Building a House:
1. Find the right builder
When building a new house, the most important task is finding the right builder. You want to use a company that matches your needs, wants, desires, style, and price range.
The new-build market is constantly shifting, builders come and go as new neighborhoods start, or complete. Make a list of possible builders, if you have a preference already. If you’re not sure, what communities are being build or don’t have a custom builder you want to use. Ask us! We always have an ongoing list since builders keep us informed of new neighborhoods. We can even help you narrow down your choices by reviewing your wanted features and providing research on which builder will best fit your needs.
2. Have Buyer Representation
Use a REALTOR® who works with you on your behalf and is professionally and legally bound to represent your best interests. Buyer representation is important when building a new house because, not only will they help you find the right builder, they will work on your behalf to make sure that you are getting what you want and what they agreed to.
Another benefit of working with a good REALTOR® is that they will be looking at your new house with future resale in mind. The Columbus Team is intimately familiar with what buyers want and can advise you regarding choices that will improve your resale.
There is no fee to buyers when choosing representation, the builder pays a small percentage to the agent because using us saves them time and money as well. The cost of building a home is the same price whether or not you use a REALTOR® but If you choose not to buyer representation, there is no one who is legally bound to represent your best interests. The Columbus Team has many clients who we represented during new home builds and they are very happy they did so!
3. Expect price increases
There are a many costs associated with building a new house. Unlike buying an existing home, every detail of the building and property is up to you. This includes everything from floorboards being 2” or 4” to light switch plates being brass or plastic. With each of these choices comes a varying cost. This process can become unexpectedly expensive, which is why we suggest adding $10,000 to $20,000 onto the initial cost of the home to cover your design choices.
If a community proves to be popular, the builder may raise prices as the homes sell, in the past once you were in contract you were insulated from these price increases. In 2021, the new build contracts vary by builder. There are many opportunities for the builders to insert clauses, often paragraphs, where you, the buyer, is responsible for any increased cost for materials above the original contract price. These contractual paragraphs are called escalation clauses. Many builders are also adding clauses that state if the new build does not appraise for the contracted price, that the buyer will pay the gap between appraisal and build price.
“There is a lot of buyers’ beware in building a new home today,” says Sue Lusk-Gleich. “Buyers only build 1 house in their lifetime and do not understand some of these pitfalls could very well throw off their budgeting for a new home, including future unforeseen cost or loss of deposits if they cannot perform in the end because of financial changes to the transaction.”
“Realtors on the other hand help our buyers build houses every day and bring great value to the buyer client of a new build to help them understand situations they may find themselves in after the fact.”
4. Be prepared for it to take longer than expected
Everything from the weather to the delivery of parts can affect how long the project takes, regardless of the timeline you’ve been given. Building a new house is time consuming because it requires permits, inspections, plus schedule coordination of many different contractors, and suppliers working in conjunction with one another.
At times, it may be a frustrating process, but it will get done! Your REALTOR® keeps on top of the timeline and communication with the builder. We represent you to ensure the house build meets your expectations and the contractual obligations. The Columbus Team consists of experienced new build REALTORS®.
If you found 4 Must Know Tips before Building a House helpful, or have any questions please reach out! We’re happy to help!