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Thursday, July 19, 2012

Buying New Construction in Atlanta




Ahhh, the smell of fresh lumber, carpet fumes, and polyurethane.  What could be more intoxicating than inhaling these delicious v.o.c.s (maybe a new car, or a new baby's head, but that's about it)?  I get so excited when I show new homes (new construction) to buyers.  Everybody likes new.  You're not buying someone else's history or questionable past, it's a fresh new start for your own memories for the making.

There are some things to look out for when buying a new home.  Timing is important to a lot of people, because if you're building a custom home, it may take longer than planned due to weather, materials availability, sub-contractors scheduling, etc..  You may get closer to exactly what you want when you build a new house, but be ready to make a LOT of decisions.  What kind of tile for the master bath, guest bath, hall bath, downstairs bath, backsplash, kitchen floor, basement bath, etc., and that's just tile.  What about all the paint colors, carpeting, hardwood flooring stain, shiny or matte polyurethane, appliances, granite countertops, shingle color, brick color, siding choice... a  seemingly endless barrage of choices.  Be prepared to spend a lot of time and thought if you are building from the ground up. 

Also, be aware that in new construction, most large production builders have their own contracts.  Be sure to read it and understand it fully before you sign.  Many times, a builder (particularly if they are building a custom or semi-custom home for you) will require a substantial Earnest Money deposit which may be held in their operating capital account.  If so, know that your money is at risk.  What if the builder goes belly-up prior to completion?   What if the builder is the subject of a lawsuit with assets frozen during the construction of your house?  What if the builder disappears? (Sh) It happens.  Your best bet to build a new home is to use a reputable builder with references checked before you sign anything or give anybody any money.

If you are buying a spec home (a new home built by a builder that is speculative) you might be able to negotiate a better deal.  Builders get construction loans and get a draw from the loan in different phases of construction.   The further along the house is, the more interest the builder is paying on the construction loan and the longer a finished house sits, the more it costs the builder, so he becomes motivated to sell.  Many times if the new spec home is already completed (or mostly completed) you may be able to have the Earnest Money kept in your broker's escrow account where it is much safer.  Plus, there's little risk of the house not being finished since it is finished (or almost finished). 

Still, let's say you want to make a few upgrades in the new spec home like upgrading appliances, installing a privacy fence or adding wiring for surround sound, or finishing a basement.  The builder will likely require these upgrades paid for up front as non-refundable.  Before you give non-refundable money to the builder, make sure that your loan is approved!   This includes having the appraisal done on the house.  Otherwise, if you get denied for the loan or the appraisal is lower than the purchase price, you will most likely lose money and not get the house.

New construction is up 26% over last year.  This is a very good sign of the housing market recovery.  And finally, after a few years with very few new homes to choose from, you can buy a beautiful new house for a great deal.  I know for sure because Chad and I are closing on a brand new house tomorrow!  Woo Hoo!!

To find your dream home check out my website.

6 comments:

  1. No wonder you wanted me to read this! You announced our new home. I can't tell you how excited I am about this.

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    1. Me too chad. I'm excited now to tell this to my family, because they really want to buy a jacksonville new homes. This blog is a big help to us to find the good home for us.

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  2. World should be change and real estate company also provide most beautiful real estate. I love read your article. Thanks again for sharing this to us, this very useful, and also help for those who interested on real estate. I am investing in this site. La Quinta Trilogy real estate

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  3. I want to buy a new home next year, and I think I can use your blog on finding the right home for me. Thank you for sharing and I hope you can post more great information like this.

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  4. This topic is very helpful for me, Thanks for share this utilitarian info with us...

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