buying your first home - what you should know

Want To Buy A New Construction Home? 4 Mistakes That Could Cost You

If you are looking to purchase a new construction home, there are some mistakes you can make with the buying process that could end up really costing you. However, you can avoid making a costly mistake with the right education.

#1: Not Shopping Around for a Mortgage

When working with a builder, often they may already have a lending company or mortgage company that they prefer to work with. Although you can get a quote from the lender that the builder prefers, you should always shop around for your mortgage.

This will allow you to compare rates and find the best lender for you. You are the one who is going to have to live with the mortgage for the next fifteen to thirty years, so take some time to comparison shop.

#2: Not Getting an Expressed Warranty

When it comes to purchasing a new construction home, there are two types of warranties that most builders offer, either an implied warranty or an express warranty.

An implied warranty is designed to cover any defects resulting from workmanship and impact the safety and liability of the home. They are often very broadly worded warranties.  

You want to get an express warranty. An express warranty is much more precise about what is covered and how long it is covered. In addition, with an express warranty, the terms are more defined, which protects you and the builder.

#3: Getting Upgrades That Are Not Worth It

Next, when it comes to buying a new construction home. There are going to be lots of add-ons and upgrades you can choose for the home. Of course, you will have to pay for all of those upgrades, so be sure that any upgrades you choose will increase the value of the home and not just hit you in the pocketbook. Research and find out what upgrades will help improve the home's worth so that you spend money in the right manner.

#4: Not Negotiating

Finally, it is important to remember that you can negotiate with the builder when purchasing a home. You can negotiate a lot, which is why you are going to want to hire a real estate agent who has experience with new construction homes to help you negotiate with the builder. The builder will actually pay the agent's commission for you. In addition, working with a real estate agent will give you someone to stand up for your needs during the building process.

When it comes to buying a new construction home, always shop around for a warrant, get an expressed warranty from the builder, think carefully about what upgrades you want, and always negotiate the sale with a real estate agent.