Buying a completely new home can feel great. To have something completely new and to customize it while it is being built is exactly what most homebuyers want. But we must keep in mind that most home buying advice is aimed at people who are purchasing an existing property. What happens though if you are planning to buy a new build? The house is still under construction or hasn’t even been started yet? We have the tips you need to know to ensure your new home will meet all your needs.
1. Understand what I am actually buying
First and foremost you might just be buying a ‘plan’ without having anything visible in front of you. It can make it hard for the buyer to realize if this is exactly what they are looking for. Make sure that you are getting what you are paying for and that the plan fits exactly what you want. Does the price include certain square meters of garden, a parking spot or a specific amount of windows?
Take your time and check the plans in detail. Be honest about the things you are not sure about or you might want to change. Look beyond the show homes: developers can use them as a strategic selling tool. Just because this house looks a certain way does not mean that it will look just the same or be exactly in this location with that amount of sunlight. They can decorate and dress those model homes to look magnificent. Builders and designers employ all kinds of techniques to make the model home appear bigger than it actually is. Lastly you should inform yourself beforehand about extra costs which can occur such as the annual service charges.
Just like a brand new car if you already buy something new you want it to be perfect. Very quickly the expected buying price can increase because of the premium details you fell in love with in the show house. You want the same marble kitchen bench like you saw? This special parquet flooring or the shower temple you always dreamed of? Yes, we know it can be very tempting to include all those little details when purchasing your own new build home. Be aware that even though you might think those are all little things they will quickly add up to a much bigger purchasing sum than expected.
2. Check prices for a new build home
Sticking with the example of a the brand new car, a new build house has a much higher price than what is already available on the market. But this isn’t the only thing those two have in common. Even though the property market is rising, as soon as you step a foot into your new dream house the price can decrease.
Compare the new build home you are thinking to buy with similar “used” properties. Start with terms of value, space and rental value in the local area. Check the price per square meter, and compare it with the resale market so you understand the extent of the high price you will be paying.
Negotiate with the developers. Negotiation is key when buying a new build home. You might be thinking, since something like this does not exist yet how do I know the right price to I should be paying? Generally said this would depend on a variety of things. Like in other situation the same saying appeals here: First in, best dressed. The earlier you arrive at a given development, the better deal you’ll get – and of course the more choice you’ll have.
Do your homework by comparing prices with similar developments in the same neighborhood and seeking advice from local realtors. Like Richard Best says in his article ‘6 Best Tips to Negotiate a Home Purchase‘ you should make sure to get realtors who really know the market. They must understand the boundaries for price offers and also know which properties are more overlooked. This may be more appropriate for a low-ball offer. Then…it’s time to negotiate! No sale price is ever set in stone.
3. Consider delays in moving dates
I am sure you are super excited and proud that you are getting a great deal. However, have in mind though that not always everything is going to plan. In an uncertain world, it is possible that you may be buying into a development that may never be completed.
We obviously don’t want to burst your bubble. However, the worst scenario could be that you would be stuck with an unsellable house in the middle of an unfinished community. Due to those reasons we strongly recommend you to get a certain agreement. Ask the builder to agree to a ‘long stop’ completion date which means he’ll be liable to pay you compensation if he doesn’t finish the work by that date. We strongly recommend you to be one of the first ones to buy a house, in order to get a good deal. On the other hand, make sure that the rest of the houses have already received offers and will be bought, so you don’t end up in a ghost town.
4. Watch out for warranties
Whether you’re buying off plan or new, making sure your builder is part of a warranty scheme is crucial. The NHBC’s Buildmark is the largest of these programs but there exist many more. Those guarantees are supposed to give peace of mind for the first 10 years after construction of the property. Moreover such warranty scheme will offer you protection if your builder goes broke or disappears after you’ve paid the deposit. It will also ensure the home has been built to agreed standards and provide a third party resolution service in the event of disagreements. I strongly recommend you to never proceed with a sale if your builder does not offer a recognized warranty.
5. Study your future community
When you begin your search look closely at the neighborhood and the location. There is no harm in actually visiting the location of the new build home and talking to neighbors. Ask them what they think about the neighborhood, how secure or kid friendly it actually is.
Go and explore the other streets and find out how far away the school or supermarket is. Because in the end you don’t want the home of your dreams in an area that’s a nightmare for you. Check out as well our article about the Most Common Mistakes First Homebuyers Make. In case you are looking at a freshly built house print one of our Checklists to help you stay organized.