I recently asked our client (who built a new home out of state) for their TOP take-aways.  Here are the top 3 they shared with me!! Getting educated about the process is important – so if you have more questions after reading, please reach out!

 

1. Understand what options/customization is available:

  • Is the builder stock, semi-custom, or fully-custom
  • What comes standard for the base price
  • Do you need to be in-person to make selections and if so, is there a limited window to do so with the builder’s design team
  • How much do change orders cost after those initial selections have been made, if you change your mind  
  • Can you do multiple changes, to various things on a single change order?  When is the last moment when a change can be made — for instance after drywall

2.  Understand when payment is due and for what:

  • Is the first deposit on the base cost or is it after the customizations
  • When is the second deposit due – these can greatly affect how you manage your money
  • Is there a “walk-away” period or is any deposit final 
  • Be on the lookout to have a lumber addendum with the current wild lumber market.  A good builder will have this knowing your base cost can increase dramatically from when first sign and when they order lumber.  One should be able to evaluate the cost and terminate as needed.  A good question to ask also is how long can you take to make this decision

 

3.  Understand things won’t be perfect:

  • Be willing to compromise back-and-forth
  • Things won’t always be in-stock
  • Managing surprises is how you stay on budget and stay sane
  • Don’t take the contractor’s word on certain costs.  Go through each item, line by line; don’t be surprised if you got over-charged, we all mistakes  
  • Lastly, manage the volatile loan market by paying to lock a rate.  Many deposits are fully refundable, and you only need pay a point or two over current rate. You usually have a float down option should the rates fall.  This way, there won’t be any surprises on how much your payments will be when the build is complete.  Extend it a couple months beyond when the contractor says he’ll be done

This content is not the product of the National Association of REALTORS®, and may not reflect NAR's viewpoint or position on these topics and NAR does not verify the accuracy of the content.