Guest Post From the Hubby

Hello there Bloggers!

     My wife asked me to write a guest post about our experience with purchasing a new home so here is my shot at it.  Rather than re-hash details about selections and what not, I'll just highlight things I liked/disliked:

     Pros:

• Everything is new and should be relatively maintenance free for the first 5-7 years.
• Let's be honest whether it's shoes, cars, or new homes...nothing beats that new smell 
• Being able to pick out certain upgrades make sense during the building phase.  That way you don't have a $20k project to completely redo your bathroom and kitchen to your dreams.

     Cons:

• You have very little power as a buyer in new construction.  The builder definitely has the upper hand and the contract is titled in their favor.  I'll provide a little more detail on this later.
• There is very little transparency in costs of upgrades.  Here's a task...ask your builder/design center who is the maker of the cabinets you upgraded to.  Now, go research and try to find pricing on those cabinets.  More than likely you will not.  
• Not having a choice in things like who you buy your finishes from or who does your wiring can only be towards everyone's advantage except yours.  If you want details, I can answer those in the comments section.  

So any advice I can offer or things I would do differently are:

1. Hire a realtor.  Some sales reps will tell you there is no need, but I don't agree.  Most builders have a fund setup to pay realtor commissions so it likely costs you nothing.  An honest realtor will also agree the amount of work on new construction is much less on their end vs. buying/selling existing homes Some will even contribute a portion of their commission towards closing costs.  You probably have to ask though and your mileage may vary.
   
   A good realtor will explain in simple terms the key portions of the contract and advise you of the risks before signing/agreeing.  They will also help you with selections and let you know what makes sense to do now/later or what's important on the re-sale market if that is important to you.  Lastly, a realtor will be that sounding board and make sure you can't find an existing home that will make you happy at a more attractive price point.


2. In Virginia (not sure about other states) you have 3 days to review the HOA bylaws.  Within those 3 days you can cancel your contract without any questions asked.  In existing construction, I believe you have until post-inspection to do so without any explanation.  


3. Most builders include a 2 year timeframe to build your home from the day your contract is ratified.  They can keep your earnest money during this time.  I've never heard of one taking this long, but just thought I would mention it to serve as a another example of the tilt of power.  I'd be surprised if most reputable builders wouldn't just refund your earnest deposit before holding your money for 2 year because of things like a market crash/recession in their defense.


4. If you really want something, negotiate and then get it in writing as an addendum to your contract if possible.  Something as simple as if you love the standard window you see on the model.  Make sure you get it written in your contract that your unit has to have it regardless if the builder no longer carries it by the time you build.  Now some builders might not budge, but if it is a make or break item to you then it's better to decide before signing as opposed to not getting it because the builder is saving a buck by switching because the contract language allows them to.


5. Questions I would ask a 2nd time around are:

• What are the standards and what in the model is an upgrade?
• If the model doesn't have the standard (such as cabinets) then can I view the standard cabinets, countertops, etc.  
• Can I visit your design center to see my choices and how much additional choices will cost me?  This way you can get an idea of total cost of your home after upgrades.  It will also give you an idea if your builder is truly that much better on standards vs. the competition.  
• Ask for a price list on low-voltage wiring if that is sub-contracted as well.
• Visit your local home improvement/hardware stores and compare the prices once you get a better idea of what the builder is going to charge.  Also go online and look at the cost of things such as a spool of material used in wiring. I know labor is also a factor, but let's be honest they are going in pre-drywall so theoretically the labor should not be the same as someone getting it done after the drywall goes up.  Pretty sure the builder or supplier buys in bulk too.  All this is to give you more clarity on how much things costs post-construction and are you paying too much during the building phase.
• Can any of your incentives be included without me being tied to a certain lender?