Agents should address the following issues when inquiring about a newly constructed home on behalf of buyers, although the Home Due Diligence and Vigilance is not limited to the below mentioned recommendations, but these are the most important;
- Ask for a sample of the builder’s contract. Most have their own, distinct from other companies. This is almost always made available on request on a 24 hour notice.
- Ask for clarification of home warranty coverage. Warranties are often issued by a third party. So it is important to look if everything is in place and your decision to buy is wise.
- Obtain a list of costs. What is standard versus an upgrade, and how much do upgrades cost? And remember that most builders pay commission on the contract price, not the final purchase price with the upgrades included. So always ask for a summary so you are clearly aware if there are any hidden costs.
- Inspect for defects. New homes are not flawless. Request an inspection from a separate company. You will be surprised some of the dreadful defects you can trace during inspection.
- Check out the neighbors. Review county records to learn what’s being built on adjacent land. Also reviewing records helps you to understand the property value and if the buying decision is lucrative.
- Consider HOA fees. What happens if the builder underestimates HOA fees and costs skyrocket after development is completed? Visit a builder’s previously completed developments and gauge home owners’ satisfaction with fees. If needed you can request the builder for home owner references that have delt with the builder in the past.
- Learn about nearby closings. Review public records to see if the developer may be prone to dumping unsold properties at auction, meaning that recently sold homes’ values may drop.
If buying in a new community - you may want to get list of what items are included in sales price - driveway or landscaping - most builder warranties are only covering manufactures defects, may want to clarify this.